Leading A Lean Enterprise Transformation in a Health Care

System

May 8, 2012 Patricia A. Gabow, M.D.

CEO

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Leading A Lean Enterprise

Overview of Denver Health Why is healthcare transformation

needed? Role of leadership Lessons learned

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Non medical Detox

Correctional Care

Denver Health

Medical Center

911

Family Health Centers

Regional Poison

Center & Nurseline

Denver Health

Medical Plan

School-based Health Centers

Rocky Mtn Center for Medical

Response to Terrorism Public Health

Rky Mtn Regional

Trauma Ctr

Employed Physicians

HIT

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Denver Health Patients

Denver Health cares for approximately 176,000 individual patients – almost one third of Denver County’s population

37% of Denver’s babies are born at Denver Health

40% of Denver children use Denver Health

70% of patients are ethnic minorities 75% of patients are below 185% FPL

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American health care has serious problems in:

–Access –Cost –Quality/Safety

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Leading A Lean Enterprise

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Change in American healthcare will require new American models

New American healthcare models will require transformation at individual system levels

System transformations require institutional leadership that focuses on and delivers change

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The Role of Leadership – Defining the journey

• Create the vision • Define the path

– Implementing the journey • Teach the path • Create structure – Build the road • Walk the path

– Commitment to outcome • Measure performance • Provide feedback • Create transparency

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Role of Leadership • Define the Path

– Literature review – External steering committee – Site visits – Employee focus groups – Patient focus groups – Detailed examination of processes – Chose the path

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©

Right Person

Right Environment

Patient and Family

Right Process

Right Reward

IT

Right Service

Right Communication

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Transformation

Con

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Impr

ovem

ent

Res

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for

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Lean Pillars of Transformation

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Waste is disrespectful of humanity because it squanders scarce resources

Waste is disrespectful of individuals because it asks them to do work with no value President Toyota

Waste is disrespectful to patients by asking them to endure processes with no value

Waste is disrespectful to taxpayers for asking them to financially support processes with no value.

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Leading A Lean Enterprise

Role of Leadership – Implementing the Journey • Teaching the Path • 25 Black Belts

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Leading A Lean Enterprise

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Role of Leadership – Implementing the Journey – Teach the Path

• Executive Staff and Directors of Service (Chairs) – 4 hours Lean 101

• Mid-Managers – 2 hours overview • 2 hours first Lean tool (5S)

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Leading A Lean Enterprise

Black Belt Example: Engineering 6S Supply Project

2006-2011

Master Black Belt: John Thompson, Associate Chief of Operations

6S: Sort Set in order Shine Standardize Sustain Safety

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Role of Leadership – Implementing the Journey – Teach the Path

• All mid managers do 5S project • Report with metrics to CEO • Provide a rapid Lean results applicable to

clinical and support areas—fun/useful • Large number of employees involved • Immediate results • Begins spread of Lean

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Unit 1, Basement, Bedroom, Plumbing (BEFORE) Frank Ortega 4/19/06

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Unit 1, Basement, Bedroom, Plumbing (AFTER) Frank Ortega 5/2/06

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Engineering Expense Trend

Supply Expense

R & M Expense

Total Supply/R&M

2004 $1,034,631 $769,364 $1,803,995 2005 1,155,500 1,025,908 2,181,408 2006 869,734 784,212 1,653,946 $527,462 improvement from 2005 2007 707,223 1,000,124 1,707,347 $474,061 improvement from 2005 2008 714,993 862,117 1,577,110 $604,298 improvement from 2005 2009 711,505 856,252 1,567,757 $613,651 improvement from 2005 2010 906,285 884,893 1,791,178 $390,230 improvement from 2005

May 2011 Annualized 973,354 825,060 1,798,414 $382,994 improvement from 2005

Engineering 5S Project Results

Cumulative savings of $2,992,696 achieved while our square footage increased by 35%

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Lean Deployment at Denver Health

DH Black Belts (BBs): • 250 Black Belts • 48 hours lean training • Day to day lean • Bi-Monthly reports • BBs embedded

throughout clinical and non-clinical areas

Rapid Improvement Events (RIEs) • 16 Value streams • RIEs based on Value

Stream Analysis • RIEs coordinated by 9

Lean Facilitators • 7-9 members per team

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Role of Leadership – Commitment to Outcome • Measure Performance

– Define metrics/target all levels – Metric reporting CEO

• Provide feedback • Create transparency

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Define metrics • Black Belt target -- $30,000 • Value Stream target

– Financial – Quality – Human Development

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MDIs Purchased Pre and Post Implementation of Common Canister Protocol

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Q1 Q2 Q3 Q4

Pre ImplementationPost Implementation

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Financial Benefit Per Black Belt Trend

Top 25 Black Belts Metrics

$796,926 $562,678 $529,057 $490,668 $479,830 $365,737 $317,679 $302,165 $288,562

$279,711 $279,413 $276,293 $257,666 $251,659 $236,980 $236,980 $232,400 $200,574 $177,096

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2012 Value Streams First Floor (ED,DECC, AUCC)

RMPDC – Drug and Product Safety

Nursing Clinical Process

Managed Care Revenue Cycle

Specialty Clinic OB/GYN

Human Resources RMPDC – Patient Access

Perioperative Services Pharmacy

Behavioral Health Services CHS (x16 RIEs)

Medicine Discharge Education

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Value Stream 2012 Financial Target

Quality Target

Pharmacy $1,200,000 Outpatient Satisfaction

Managed Care $2,300,000 CMS Safety Monitoring

Community Health Services

$1,000,000 Visits to Medical Home

Revenue Cycle $6,000,000 Aggregate Clean Registration Score

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Wall with all the Value Streams 29

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$158,841,811

$-

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000Ju

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RIE + Blackbelt Combined Total Financial Benefit Trend Cumulative Through March 31, 2012

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Leading Lean • Employee Involvement

– 250 Black Belts – 400 RIE’s – 2,000 Employees on RIE’s – TNTC – 5s, consultants

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Leading A Lean Enterprise

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Agree

I have been involved in the Lean Initiative like 5S or RIE 41%

I see benefits of the Lean philosophy in doing right processes at DH 64%

I understand Lean philosophy and how it works in our organization and helps maintain our mission

78%

Impact of Lean on Culture Employee Survey– 85% response

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Lean Lessons Learned – Organizational 5s a goal to start • Black Belts are an asset • Project approach not optimal path • Structure is important • RIE’s require power transfer • Handling push back • Sensei are valuable

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Transformation Lessons Learned • Transformation requires integrated components – no

silver bullet • A clear process is necessary for transformation • The process is applicable to all places where work is

done • Leadership from top is needed to create transformation • Cultural transformation requires entire workforce

engagement • Need a pace that produces transformation • Patience and steadfastness are needed

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QUESTIONS?

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Leading A Lean Enterprise