World-Class Performance

Lean in
Healthcare
Operations

A Lean Guy Goes to

the Hospital
Presented Aug 4, 2006

Mark Graban, LFM 99

Senior Consultant, ValuMetrix Services
Ortho-Clinical Diagnostics, Inc.

Agenda
The Crisis of Waste in Healthcare
Lean Thinking Principles in Healthcare
Benefits for:
Patients
Employees
Hospitals

Business Confidential, Ortho-Clinical Diagnostics 2006

Marks Spaghetti Chart

Business Confidential, Ortho-Clinical Diagnostics 2006

Who Do I Work For?

ValuMetrix Services (Ortho-Clinical Diagnostics)
Started in 2001 running Lean and Six Sigma pilots in labs
Launched as a fee-for-service consulting business in 2003
Not internal consultants

100% dedicated to healthcare projects

Hospitals, Laboratory Companies
U.S., Canada, Europe, China

Application of the J&J Process Excellence Model

Project-based approach, lean coaching, train the trainer
Goal is to help build a lean enterprise, not to do kaizen events

Business Confidential, Ortho-Clinical Diagnostics 2006

In the News Almost Daily

Business Confidential, Ortho-Clinical Diagnostics 2006

Hospitals Are Dangerous

CDC 1998:
90,000 killed
and 2,000,000

injured from
hospital-caused
drug errors &
infections

Business Confidential, Ortho-Clinical Diagnostics 2006

Preventable Errors Abound

3 to 5% of
specimens taken
each year are
defective blood
that isnt drawn
correctly mix-up
with another
patients sample

Business Confidential, Ortho-Clinical Diagnostics 2006

Preventable Errors Abound

Business Confidential, Ortho-Clinical Diagnostics 2006

Preventable Errors Abound

Business Confidential, Ortho-Clinical Diagnostics 2006

Mass Production or Healthcare?

Large batches
Sub-optimizing one
resource

Automation is the
answer

Lack of employee input

Lack of standard
processes

One-person / Onemachine

Not communicating
metrics

Quality through
inspection

Lack of leadership
Constant fire fighting

Business Confidential, Ortho-Clinical Diagnostics 2006

Non-Lean, Current Thinking

1. Specify value in the eyes of the
provider (or the payer)
2. Identify your department and
sub-optimize it
3. Make patients wait for the
convenience of the system
4. Ignore some employees and
devalue others
5. Continuously fight the same
fires in the pursuit of surviving
the day

Business Confidential, Ortho-Clinical Diagnostics 2006

Applications of Lean in Healthcare

Laboratories
Reducing Turn Around Times and Errors

Emergency Departments
Reducing diversions, improving flow

Outpatient Cancer Treatment

Reducing patient delays, increasing capacity

Operating Rooms
Reducing changeover times, increasing utilization

Pharmacies
Reducing errors, improving response

Food Service
Reducing wasted food, improving quality

Business Confidential, Ortho-Clinical Diagnostics 2006

Why LEAN Works in Healthcare

LEAN is not a list of tools that applies only to
factories
LEAN is a philosophy of management that
applies to any system
LEAN rallies people around goals we can all
agree on:
Patients and Employees

Business Confidential, Ortho-Clinical Diagnostics 2006

Not About Cutting Heads

Shortages of skilled employees
51% of hospital med techs greater than 45 years of age,
vacancy rate at 11%
Shortfall of 265,000 nurses expected by 2010

Do more
With the same
Eventually, with less

Business Confidential, Ortho-Clinical Diagnostics 2006

Not Only About Cutting Costs

Hospitals are using lean as a
Business Strategy
Improving quality
Improving service
Improving employee satisfaction
Growth strategies
Un-outsourcing testing work

Business Confidential, Ortho-Clinical Diagnostics 2006

Principles of LEAN Thinking

1. Specify value in the eyes of
the customer.

The customer must be willing to pay

for the activity

The activity must change the form, fit

or function of the product

The activity must be done right the

first time

Who are the customers?

Source: LEAN Thinking, Womack and Jones 1996

Business Confidential, Ortho-Clinical Diagnostics 2006

Principles of LEAN Thinking

1. Specify value in the eyes of
the customer.
2. Identify the value stream
and eliminate waste.

13% of hospital costs are due to controllable waste.

Source: Zuckerman, Hadley, and Iezzoni, 1994

Business Confidential, Ortho-Clinical Diagnostics 2006

Typical Organization is Silo-ed

Treatment Center

Treatment Clinic Check-In

Pharmacy

Laboratory Testing

Phlebotomy

Physician Clinic

Business Confidential, Ortho-Clinical Diagnostics 2006

Value Stream Anatomic Pathology

Patient&MD

I
Transcriptionist

I
Pathologist

Specimen
Collection

Sendto
Grossing

Grossing

Embed
&Cut

Processing

Business Confidential, Ortho-Clinical Diagnostics 2006

Slide
Making

Staining

Was this an ER Problem?

empty beds are available in the hospital, but

there arent enough nurses to staff them.
This is a Value Stream problem!

Business Confidential, Ortho-Clinical Diagnostics 2006

Types of Waste Lab Examples

Defects

Label on the wrong tube

Overproduction

Drawing all blood at 4 AM

Transportation

Long walks, multiple handoffs

Waiting Time

Tube waiting on centrifuge to fill

Inventory

50 weeks of supply

Motion

Tech walking 80 ft to the printer

Processing

Time/Date stamps added, not used

Human Potential

Administration not listening to Med

Techs or RNs ideas for improvement

Business Confidential, Ortho-Clinical Diagnostics 2006

Are We Tolerating Waste?

Healthcare = Workarounds
Professor Steven Spear
Decoding the DNA of the Toyota Production System (HBR)
Fixing Healthcare Today From the Inside (HBR)

Case Example:
10-20% of MD orders are missing EVERY DAY
Call and get the order done?
Tomorrow, well do the same

Problems need to be seen as opportunities

Business Confidential, Ortho-Clinical Diagnostics 2006

Laboratory Layouts Drive Waste

Layout is driven by
departments

Benches interfere with

straight-line walking,
encourage batches

Business Confidential, Ortho-Clinical Diagnostics 2006

Clinical Laboratory Product Flow

Business Confidential, Ortho-Clinical Diagnostics 2006

Clinical Laboratory Timeline

Total CT = 5.44 hours

Business Confidential, Ortho-Clinical Diagnostics 2006

Layouts Drive Waste of Motion

Pharmacist Walk Pattern

Med Tech Walk Pattern

Miles per Day!

Cancer RN Walk Pattern
Business Confidential, Ortho-Clinical Diagnostics 2006

Typical 5S Baseline

Unorganized Workbenches
Product Flow not Obvious
Time wasted looking for things
Hoarding of supplies

Poor Utilization of Space

General Clutter
Supply Shortages and
Hidden Inventories

Business Confidential, Ortho-Clinical Diagnostics 2006

5S Improvement Examples

Business Confidential, Ortho-Clinical Diagnostics 2006

Principles of LEAN Thinking

1. Specify value in the eyes of
the customer.
2. Identify the value stream and
eliminate waste.
3. Make value flow at the pull of
the customer.

Business Confidential, Ortho-Clinical Diagnostics 2006

Reducing Patient Wait Times

Mass Production Thinking

Utilization

Keep expensive assets heavily utilized

Machines

Doctors

The tradeoff is waiting time

Cars

Patients

Lean Thinking

Flow

Focus on reducing Patient Waiting time

Business Confidential, Ortho-Clinical Diagnostics 2006

Outpatient Oncology Patient Flow

Value Added
Blood drawn
MD consult
Needle into Port

NVA But Required

Check In / Check Out
Moving from room to room

B
ARRIVAL TO LATENESS FOR
TREATMENT
TREATMENT
PATIENT
(HOURS)
(HOURS)
A
2.5
0.42
B
3.5
1.08
AVG

3.0

NVA, Pure Waste

Waiting for Check In
Waiting for MD
Waiting for Treatment

0.75
Business Confidential, Ortho-Clinical Diagnostics 2006

Re-Work Loops Cause Delays

Business Confidential, Ortho-Clinical Diagnostics 2006

Batching Prevents Flow

Business Confidential, Ortho-Clinical Diagnostics 2006

Batching Hurts Quality

Lack of standard work and opportunity for
error proofing Anatomic Pathology

Batch of slides made, 3

patients, risk of mixup?

2nd histotech labels one

slide at a time

Business Confidential, Ortho-Clinical Diagnostics 2006

Batching Hurts Quality

Lack of standard work and opportunity for
error proofing Pharmacy

Business Confidential, Ortho-Clinical Diagnostics 2006

Flow and Heijunka

You cant have flow without some
amount of leveling in the system
Leveled Production:
You wont be Happy without it
From Toyota publication

Business Confidential, Ortho-Clinical Diagnostics 2006

Typical Hospital Lab Not Level

39% of Samples Arrive in Just 3 Hours of the Day

TAT expectations are constant
Business Confidential, Ortho-Clinical Diagnostics 2006

Leveling Reduces Peak Costs

Shift

Shift

Shift

Business Confidential, Ortho-Clinical Diagnostics 2006

Principles of LEAN Thinking

1. Specify value in the eyes of the
customer.
2. Identify the value stream and
eliminate waste.
3. Make value flow at the pull of
the customer.
4. Involve and Empower employees.
5. Continuously improve in the pursuit of
perfection.

Business Confidential, Ortho-Clinical Diagnostics 2006

Pre-Lean Med Tech Quote:

With all of the automation,

I feel like a robot.

Business Confidential, Ortho-Clinical Diagnostics 2006

The Thinking Production System

Perhaps the greatest strength of the Toyota
Production System is the way it develops people.
This is why the T actually stands for Thinking
as well as for Toyota.
Teruyuki Minoura, Toyota

Business Confidential, Ortho-Clinical Diagnostics 2006

What Mistake-Proofing Means to Healthcare

The Global Goal: Reduce Medical Errors
Human error is inevitable.
We can never eliminate it. ..
We can eliminate problems in the system that
make it more likely to happen.

Source: USA Today

August 24, 2005

Liam Donaldson
WHO World Health Alliance
for Patient safety

Business Confidential, Ortho-Clinical Diagnostics 2006

Lean Requires a Cultural Shift

Traditional Approach:
Naming, Shaming, and Blaming

Lean Approach:
Supports open reporting of mistakes
Root cause problem solving process
Anyone can make mistakes

Business Confidential, Ortho-Clinical Diagnostics 2006

Error Proofing Example

Micrograms or Milligrams?
A medical mistake waiting to happen
when written by hand

Business Confidential, Ortho-Clinical Diagnostics 2006

Error Proofing Example

Confusing

Unambiguous
(Lean)

Business Confidential, Ortho-Clinical Diagnostics 2006

MD Resistance to Standard Work

Which is
More effective?

some surgeons make a tiny, mole-sized mark on a

patient instead of a big, bold "X. I call them passiveaggressive marks
USA Today, 4/18/06

Business Confidential, Ortho-Clinical Diagnostics 2006

Lab Benefits from Lean

Productivity improvement >30%

Space savings of >450 sq ft
Standardized work practices
Reduction in Errors and Error Potential
Test Turnaround Time (CT) reduced by 50%

Business Confidential, Ortho-Clinical Diagnostics 2006

Hospitals Avoiding Capital Costs

From 60,000 sq ft to 40,000 sq ft for new lab
Cost avoidance of $800,000

Blood bank in new lab w/o adding 2,500 sq ft

Cost avoidance of $400,000

Hospital food service cancels new building

Cost avoidance of $7,200,000

Business Confidential, Ortho-Clinical Diagnostics 2006

Improving Patient Satisfaction

PATIENT SATISFACTION SURVEY SCORES
October
2005

Hospital System ED

December
2005

60%

Overall Rating

96%

62%

Privacy

84%

78%

Wait Time for MD

96%

61%

Likelihood of Recommending

98%

Business Confidential, Ortho-Clinical Diagnostics 2006

Reflections on a Year in Healthcare

Lean is a powerful methodology
People are people
Healthcare people have incredible intrinsic
motivation
Humility and asking questions is better than
being a know-it-all
Coaching the team to do lean & be lean is
the only sustainable route

Business Confidential, Ortho-Clinical Diagnostics 2006

A Call To Action
What can you do?

Talk to hospitals and doctors in your communities

Get involved with hospital boards
Encourage employer health plans to push lean
Consider a career shift into healthcare
Resources:

Good News How Hospitals Heal Themselves (DVD/PBS)

Hardwiring Excellence (by Quint Studer)
www.ihi.org
(Institute for Healthcare Improvement)
www.prhi.org
(Pittsburgh Regional Healthcare Initiative)
www.leanblog.org
(Marks lean blog)

Business Confidential, Ortho-Clinical Diagnostics 2006

World-Class Performance

Lean in
Healthcare
Operations

Mark Graban, LFM 99

Senior Consultant, ValuMetrix Services
Ortho-Clinical Diagnostics, Inc.
mgraban@ocdus.jnj.com
www.valumetrixservices.com
mgraban@yahoo.com
www.leanblog.org