Letter from Jim Womack

Here's the latest letter from Jim Womack, in case you haven't seen it or received it.....

============================================================

Dear David

I’ve been interested in applying lean thinking to healthcare since I first focused a lean lens on the delivery process 15 years ago. How, I wondered, could lean manufacturers treat products in factories better than healthcare providers treated patients?

I was hopeful about initial attempts to apply lean principles, beginning with Peace Health in Seattle in the mid-1990s. But the early efforts faltered and for many years the challenge seemed to be too great. It took time and many false starts to translate ideas born in the factory to the situation at the bedside. And it took more time to develop lean management methods in a craft industry with no standard work, no publicly reported outcomes, and no ability to think horizontally about the flow of patients through the diagnostic and treatment processes.
Perhaps most important, governments and insurers were willing to pour unlimited amounts of money into healthcare providers with little demanded in return. Why tackle the hard challenge of lean transformation when mediocre providers could survive and even prosper?
Now the context has totally changed. The U.S. spends more than 16 percent of its gross national product on healthcare – twice the level of other advanced economies. Yet the new healthcare law just enacted guarantees – if the healthcare delivery process is not dramatically reformed as well -- that spending will spiral rapidly upward as 24 million additional citizens enroll for subsidized health insurance and the baby boom marches resolutely toward a life stage where healthcare needs also spiral. Given the spending limits the U.S. government is facing and voter resistance to additional taxes, the only alternative in the absence of dramatic service delivery reform is price controls, rationing, and denial of the care just promised.

Fortunately Lean Thinkers, after 15 years of experiments, now have the tools to reform healthcare delivery. In the last few years lean healthcare proponents have not only demonstrated that costs can be dramatically reduced as outcomes and patient experience are dramatically improved -- a feat traditionally thought to be impossible. They have also shown that steady progress can be sustained in complex healthcare organizations.

One of the best demonstrations of what we have learned is a new book – On the Mend by Dr. John Toussaint and Roger Gerard PhD – that LEI is publishing today. (For details, please see: www.onthemendbook.org) I believe this volume will have a profound effect by summarizing the principles of lean healthcare, documenting their benefits with a striking example, and providing an action plan for other healthcare organizations to follow to achieve similar results.

The principles John Toussaint and Roger Gerard have applied over the past decade at the ThedaCare medical system in Wisconsin (and clearly described in On the Mend) are simple and they work:
1. Focus on the patient (not the organization and its employees, the insurance industry, the drug companies, etc.) in order to determine the real value desired.

2. Identify the value stream (or patient pathway) providing this value to identify where value is actually created while removing massive amounts of waste (including the large numbers of errors causing rework that drives up costs.)

3. Reduce the time required to go from start to finish along every pathway (which always creates more value at less cost.)

4. Pursue principles 1, 2, and 3 endlessly through continuous improvement that engages everyone – doctors, nurses, technicians, managers, suppliers, and patients and their families -- touching the patient pathways.

As I’ve noted for years, humans will try anything (and everything) easy that doesn’t work before they try anything hard that does work. And that’s where we are in healthcare. All the easy fixes have been tried and only the hard things are left. And the hardest part of the hard work ahead is that everyone has to change their behavior: the doctor accustomed to craft methods with no outcome measures; medical device makers accustomed to providing new equipment without regard to cost or clearly demonstrated benefits; nurses hoping that daily work-arounds in the delivery process will somehow make fundamental problems go away; administrators hoping that somehow costs can be reduced with higher capacity utilization – by simply running the same broken processes harder -- whatever effect this may have on patient experience and errors (which dramatically increase costs.)

The final challenge is that everyone in healthcare must learn to think horizontally (as I discussed last month.) Managers, doctors, and nurses must learn to see patients flowing across complex organizations rather than reverting to their traditional vertical thinking where every department and activity is a castle with its moat, thwarting the patient’s quest for more value with less time at lower cost.

Despite the hurdles ahead I’m now hopeful that the availability of proved lean methods will push providers past the tipping point on the journey to lean healthcare, now that all the easy fixes have failed and there is no other option.

Best regards,

Jim



Jim Womack

Founder and CEO

Lean Enterprise Institute, Inc.