What Healthcare is Learning from Manufacturing
- 1. SHARING EXCELLENCE What Healthcare is Learning from Manufacturing
- 2. INTRODUCTION • Retained Executive Search Firm Specializing in TPS and Transformational Operating Systems • Exclusive focus since 1991
- 3. SPENDING MORE FOR LESS • USA richest country in the world yet lagging in healthcare. • WHO ranks US 37th vs. all other nations. (blended ranking combines health of citizens, cost of care, responsiveness of health system)
- 4. SPENDING MORE FOR LESS Source: OECD
- 5. SPENDING MORE FOR LESS
- 6. VIEW FROM THE HOSPITAL LEVEL
- 7. OPERATING REVENUE IN DECLINE • Patient volumes in decline – Higher deductible rates – unemployment/uninsured $ – Elective procedures down • Revenue (reimbursement rates) in decline – Medicare – Medicaid – Private insurance
- 8. QUALITY ISSUES • Medical errors kill enough people each week to fill four jumbo jets • 25% of patients are harmed through medical errors • Standard methods used to detect errors fail as much as 90% of the time • Reimbursement increasingly tied to quality metrics Sources: WSJ 9/21/12; US News and World Report 8/28/12;
- 9. WASTE ABOUNDS 2009 • $210 Billion: Unneeded services • $190 billion: Excess administrative costs • $130 billion: Mistakes and delivery inefficiencies (preventable complications, fragmented care). • $105 billion: Artificially high prices. Source: Institute of Medicine report 9/12
- 10. SUMMARY • Topline Revenue in decline • Quality issues alarmingly high • Unsustainable levels of waste • Increased levels of accountability LEAN/TPS
- 11. LEAN AND THE HEALTHCARE INDUSTRY
- 12. GROWING DEMAND FOR LEAN • 10 years ago less than 3% of hospitals were investigating Lean. • Today that number is closer to 30% and growing. • Stiles Associates Healthcare practice has grown 10x in 5 Years.
- 13. HOSPITAL SOURCES FOR LEAN • Consultants • Internal Lean Teams • Cross Industry Collaboration: – ThedaCare - Ariens – Virginia Mason – Toyota – WellSpan and GM build simulation training center – Autoliv tours – Many more
- 14. APPLICATION ACROSS SYSTEM • Emergency Departments • Operating Rooms (scheduling/set up/turnover) • Inpatient units • Materials/Supply Chain • Labs • Discharge process • Facility Design
- 15. MOST COMMON TOOLS • Value Stream Mapping • Kaizen • 5S • Standard Work • Poke-Yoke • Kanban • Spaghetti Diagrams • Paretos • Level Loading
- 16. EXAMPLE – OR LAYOUT REDESIGN Results: BEFORE • Step Reduction 15% • Total Process Time Reduction: 44% • Total Distance Reduction: 46% Source: Joan Wellman Associates
- 17. PROJECT EXAMPLE – SUPPLY AREA Results: • Supply Search Time Reduction 82% • Total Space Savings: 14% • Sustainable Visual System implemented to aid timely reordering. Source: Joan Wellman Associates
- 18. MANAGEMENT SYSTEM • Strategic Planning • KPI Development • Visual Control Boards • PDCA Culture Initiatives • A3 • Daily Huddles • Leadership at the Gemba
- 19. OTHER SYSTEM RESULTS • Akron Children’s Hospital: Reduced costs more than $8 million from 2009 to 2011. • Henry Ford Health System: Reduced inpatient harm rates nearly 25% and achieved cost-savings of $85 per patient. • Inova: Decreased ER waiting time by 31% and improved operating margin by $10 million. • Mercy Hospital in Mason City Iowa: Achieved a 53% faster turnaround time for patient blood test results, $470,954 in annual cost savings and $70,000 in construction avoidance. (Source: Healthcare Value Leaders Network)
- 20. OTHER SYSTEM RESULTS • Seattle Children’s Hospital: Reduced overall patient costs by 3.7% and supply expenses by $2.5 million. • ThedaCare: Achieved zero medication reconciliation errors for 4 years in a row and reduced readmission rates to less than 12%. • The Cleveland Clinic has realized over $100 million in savings in the last 5 years. (Sources: Healthcare Value Leaders Network; the Cleveland Clinic)
- 22. MIGRATION DEMAND • Lack of native transformational experience • Need for strong operational leadership experience • Establishing Metrics and Alignment skills deeply needed • “Fresh eyes” can see more waste
- 25. MIGRATION INTEREST Candidates are Seeking a Deeper Connection to their day-to-day work
- 26. SKILLS REQUIRED • Ability to Slow Down • Ability to deal with Complexity and Ambiguity • Relationship Building/Interpersonal Skills • Excellent Communication Skills • Previous Experience in Business Process Areas • Transformational experience in different industries • Optimism and the Ability to Create Pull
- 27. QUESTIONS Ted Stiles Partner Stiles Associates 800-322-5185 [email protected]