Paging Dr. Lean for Healthcare Solutions with Helen Zak

Healing Healthcare

When Jim Womack told me in 1997 that he was thinking of taking on the healthcare system because he had seen unfortunate events happen to his father-in-law, I told him “It’s a swamp, you’ll sink.”  But between then and now he, like so many of us, have seen enough success in manufacturing and some supply chain enterprises, that when we take another look at healthcare -  17% of our GNP, of which fully 1/3 represents administrative costs -  we might ask, “Why NOT healthcare?”

As someone who accidentally tripped into the system last fall, I can say I’ve seen the best and the worst, the most inspirational and the most venal human interactions.  There was an emergency room nurse who informed us that, this being her last 11 – 7 shift ever, she could not wait to leave.  “I think I’ll try retail,” she said as she assembled a new set of crutches for my growing collection.  “I applied to the Container Store, went to the Group Interview out on the floor – new thing, you ever hear of it?  a group interview – but I got rejected.”

And there was the ER doctor who, after two hours of x-rays and paperwork, sent me home with “Congratulations, you have no fractures – you have strong bones,” only to be undone by a Senior Orthopedic Radiologist who called some 16 hours later with “You have a sub-capital, impacted, non-displaced hip fracture and you need to get it fixed in 24 hours.”  24 hours?  What happened to the ER guy who saw the x-rays?  And what if I had decided to go bowling that night? 

“Two minutes to cardiac arrest, two minutes to cardiac arrest”

And then there was the young Dr. Treebles – “how long, I wondered, can a young unwrinkled professional last in this sleepless twilight environment?” -  the next emergency room doc who dropped by my gurney in between gunshot wounds, an incoming cardiac arrest, an infant’s raging fever, and a teenager’s messy auto accident.   A little exam here, a little touch there, some extra heated sheets to counteract the wind blowing through open receiving doors, he, not I, and not most of us, was made to do this work.

So the least we could do for Dr. Treebles and our unnamed exhausted (and now retired) nurse is to fix the damn system.  Drain the swamp.  Or at least stand on a stump and take a good look.

And that’s probably what Jim Womack was hoping would happen.  And inevitably a few more people had similar epiphanies, all of whom, like The Mill Girl, had been directly touched by The Healthcare System. 

The story goes that out in Wisconsin Womack had a most persuasive conversation with the redoubtable Dr. John Toussaint, convincing him that by starting a 501C3 dedicated to trying to drain the swamp, the doctor might, just might, impede the pull bad healthcare, mistakes, non-integrated, massively manual systems, and just plain over-tired workers were exerting.  (see  https://sites.google.com/site/blueheronjournal/paging-dr-lean-paging-dr-lean) Dr. Toussaint is one of those charismatic leaders whose simple touch seems to grow new movements in a desert where nothing thrived before.  Soon his little 501C3 was joined by collaborators; several best sellers, webcasts, seminars, a Shingo and now a healthcare conference (June 5, 6 2013, Orlando    http://www.lean.org/Events/2013_lean_hc_transformation_summit.cfm) continue to make history as they highlight the success stories in an area that has to be as ripe for innovation as the great endless prairies appeared two hundred years ago to short-sighted Easterners fenced in by limited land and scarce resources. 

There is opportunity “out there” in the healthcare business, but it is not entirely a neat and seamless follow-on to innovations fostered by the Toyota and other industrial engineering systems, because healthcare is a different game, played with very different and initially unclear rules. And the winners are not necessarily the guys who end the game with the most money.  It’s the people who, after all the prescriptions and interventions, are left standing (and walking), with their lives and families and wallets/retirement accounts left intact. 

One of Dr. Toussaint’s brave and brilliant followers is a former Lean Enterprise Institute executive and pioneer, Helen Zak.  Zak holds an undergraduate engineering degree and two Master’s degrees in management as well as a clear willingness to see and encourage change-makers in an area that is so in need of, and so resistant to upheaval.  Zak acknowledges the contribution Toussaint made opening this new frontier.  He’s made history and thankfully he and his followers are being recognized for their accomplishments.  Praise and recognition go a long way toward keeping one in the game, even if, as Womack discovered, the game is played out in a swamp.

As CEO of Thedacare, the Wisconsin healthcare consortium formed by Dr. Toussaint in 2008, Zak shared with The Mill Girl her approach to this new challenge. “

Zak:  I was with Jim Womack (as CEO of LEI) from 2001 – 2010, I’ve been applying lean all my life, learned it at GM.  Healthcare is tremendously different and many manufacturing people have trouble transitioning – they don’t have the people skills.  It’s a different ballgame on the culture and the transformation model – no doubt you need strong people skills. 

The Mill Girl

I’d like to take a look at healthcare as an industry – what’s the basic data from 5000 feet up?  .  We know that healthcare represents 17% of US GDP.   GM at one point estimated sticker price contained for every car about $1200 for employee healthcare costs.  In terms of where you think the waste and opportunities are to be found within the healthcare industry, what are the most important areas we can make an impact on in the short-term?

Zak:

In manufacturing, when we first got started, we had 95% waste and 5% value-add.  Well, it’s the same in healthcare.  But healthcare professionals get very defensive because they believe all the workarounds, all the band-aids that have been applied are value-add.  There is no system architect in healthcare.  In industrial companies we have engineers, people who create systems, but there isn’t that role in healthcare.  There is no chief engineer – instead, you have clinicians vs. administrators, and in many cases, they are taught to hate each other in school.  That division starts in education.  The healthcare operating system just evolved.  Also, we see a big difference in opportunity.

The Mill Girl:  It certainly sounds like the business is running to different goals?

Zak:  Right.  The other difference is competition.  We know that any industrial company not using lean thinking is out of business, corporate competition is the driver so costs go down.  So you might say industrial companies have developed improvement muscle.  But healthcare doesn’t yet have the muscle for the improvement, they don’t have deep Knowledge.

The Mill Girl:  So that sounds like tremendous opportunity?

Zak:  That’s where the pioneers are learning in healthcare – people like Patty Grabow, Gary Kaplan and John Toussaint.  There is still no Toyota of healthcare!  We have to look at industry.  Five years ago, no healthcare CEO would draw on industry knowledge – “we’re healthcare we’re different,”  but that is slowly changing.  I’d say one of the characteristics of healthcare leaders is that they are very risk averse - it’s a way to keep your job, to keep the board out of it - don’t get on the front page of the newspaper and keep the doctors happy!  That’s an especially high price. 

Being risk averse also means not being willing to expose problems and run experiments.  There’s no focus on getting better, and who knows what the real costs are anyway.  So now the whole healthcare world is turning topsy turvy - for healthcare leaders, everything is changing.

In some cases, Healthcare is still looking for a silver bullet solution.  If you overlay on that some unfamiliarly with lean skills, and some hospital professionals on the cusp of retirement, it’s going to be harder to get the organization to where it should be.  But I see some opportunity there, because there are a lot of retirements coming up and the people replacing them have risen in a system where at least improvement is not foreign word.

The Mill Girl:

So one of the answers is attrition, but as we’ve learned from manufacturing, the system is sometimes a barrier as well.

Zak:

It’s all opportunity.  But bringing us back to lean thinking, the system - you tripped into it - because healthcare is vertically organized, actually the patient holds information and moves horizontally through the system  So we ask, “How could this be?”  At progressive organizations like Thedacare we are now focusing on the patient and their journey through the system, horizontally. 

Someday there will be a chip, embedded in our person, because the information flow and patient flow are two different things - that’s part of the problem.    It’s one of the things that developed over time, the 5 Whys.  The question is “how can we make this better for the patient?”

The Mill Girl:

So your role is a special and unique one, correct?

Zak:

Yes, I like to think that what differentiates the ThedaCare Center for Healthcare Value is that we help change the behavior of healthcare leaders and the behavior of the organization.

The Mill Girl:

Let’s talk more about the difference between manufacturing and healthcare.  What areas do you see are bigger and more problematic in healthcare compared to manufacturing in terms of lean implementations?    After the quick hits, improvements get tougher.  What's the toughest nut to crack in healthcare and have we found our solution yet?

Zak:

The toughest nut to crack – in the whole system – is the management system and because of the way healthcare is managed, it is fundamentally broken.  We see an environment that is very dictatorial.  Doctors are taught “I am the one who makes the decisions,” so everybody looks to them for answers.  But in the new work order, leader doesn’t have to be an MD.  We’re coming from a very top-down organization.  We call this improvement leadership vs. white coat leadership:

                    White coat leadership vs. Improvement leadership

*  All knowing                                      *  Patient

*  "In charge"                                      *  Knowledgeable

*  Autocratic                                        *  Facilitator

*  "Buck stops here"                            *  Teacher

*  Impatient                                         *   Student

*  Blaming                                           *  Tenacious

* Controlling                                       *  Communicator

                                                            *  Humble

So the whole way the system is managed is hard work, it’s the hardest nut to crack.

There is another area that we’re looking at as well, the whole payment and incentive system.  The  way people get paid is by volume, by procedure, like in the old piece work days when people got paid by the piece - poor quality didn’t matter.  So that’s the way healthcare professionals  get paid and you can take out all the waste in the system, but if people are not being paid for value, then you are dis-incentivized for doing improvement.  Now this is driving bad behavior, for the doctors to make money – it’s not about how healthy or how well he did, the pinning surgery, for example, it’s how many can we get through to make money.  This approach is changing, but it’s a tougher nut to crack.  It has to change or it will bankrupt us.  The

incentives have to drive different behavior. Again, we’re touching on fear and a tendency to be risk averse.But there are some interesting experiments going on with payment models.

The Mill Girl:

That’s right, the money is there.  We’re looking at a spend management case that does the same big cost savings that we’ve had in manufacturing/supply chain. 

Zak:

For hospital spend and elimination of waste, a good example of improvement is at Intermountain Health. They have done some incredible work by comparing their supply chain to industry and retail supply chains, and redesigning their healthcare supply chain to using principles used by retail and industry. 

The Mill Girl:

So where is the innovation coming from and who is the farthest along?

Zak:

Virginia Mason, Gary Kaplan, Christie Clinic, Alan Gleghorn, ThedaCare, Dean Gruner – they’re all pretty remarkable and they have the numbers to prove it.  Plus there is lots of innovation around the fringes. 

Toussaint talks of taking a different approach to solving this very big challenge.  He calls it a “gang tackle!”

Helen Zak oversees the Center’s four value streams and manages its general operations, while connecting with customers. She is also responsible for identifying future initiatives that help drive value-based healthcare. Helen has 27 years of lean leadership experience in a wide range of industries, including automotive, capital equipment and high tech. Formerly COO of the Lean Enterprise Institute for 11 years, Helen worked with Jim Womack to spread the topic of lean throughout the world and to every industry.

Helen has contributed to 15 published works on the topic of lean, as well as numerous educational programs and events. She helped to establish the Lean Education Academic Network, The Lean Global Network and the Healthcare Value Network.

Helen is on the board of directors of the Shingo Prize for Operational Excellence, as well as an advisor to EdNet at MIT and a steering committee member of the Lean Education Academic Network. She is faculty for the Institute of Healthcare Improvement, and faculty and coach for the MBOE Program at Fisher College of Business at Ohio State.

Helen received a BS in Mechanical Engineering from Marquette University, an MS in Operations Management, and an MS in Manufacturing Management from Kettering University.