What Healthcare is Learning from Manufacturing
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What Healthcare is Learning from Manufacturing

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How experts from manufacturing are helping to redefine healthcare delivery. Ted Stiles, Partner at Stiles Associates delivered this presentation at the 2012 NE Shingo Prize for Operational Excellence ...

How experts from manufacturing are helping to redefine healthcare delivery. Ted Stiles, Partner at Stiles Associates delivered this presentation at the 2012 NE Shingo Prize for Operational Excellence Conference on September 25, 2012

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What Healthcare is Learning from Manufacturing What Healthcare is Learning from Manufacturing Presentation Transcript

  • SHARINGEXCELLENCEWhat Healthcare is Learningfrom Manufacturing
  • INTRODUCTION • Retained Executive Search Firm Specializing in TPS and Transformational Operating Systems • Exclusive focus since 1991
  • 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)
  • SPENDING MORE FOR LESS Source: OECD
  • SPENDING MORE FOR LESS
  • VIEW FROM THE HOSPITAL LEVEL
  • 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
  • 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;
  • 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
  • SUMMARY • Topline Revenue in decline • Quality issues alarmingly high • Unsustainable levels of waste • Increased levels of accountability LEAN/TPS
  • LEAN AND THE HEALTHCARE INDUSTRY
  • 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.
  • 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
  • APPLICATION ACROSS SYSTEM • Emergency Departments • Operating Rooms (scheduling/set up/turnover) • Inpatient units • Materials/Supply Chain • Labs • Discharge process • Facility Design
  • MOST COMMON TOOLS • Value Stream Mapping • Kaizen • 5S • Standard Work • Poke-Yoke • Kanban • Spaghetti Diagrams • Paretos • Level Loading
  • EXAMPLE – OR LAYOUT REDESIGN Results: BEFORE• Step Reduction 15%• Total Process Time Reduction: 44%• Total Distance Reduction: 46% Source: Joan Wellman Associates
  • 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
  • MANAGEMENT SYSTEM • Strategic Planning • KPI Development • Visual Control Boards • PDCA Culture Initiatives • A3 • Daily Huddles • Leadership at the Gemba
  • 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)
  • 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)
  • LEAN HEALTHCARE MIGRATION
  • 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
  • MIGRATION INTEREST
  • MIGRATION INTEREST
  • MIGRATION INTERESTCandidates are Seeking a Deeper Connection to their day-to-day work
  • 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
  • QUESTIONS Ted Stiles Partner Stiles Associates 800-322-5185 tstiles@leanexecs.com