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In the lead up to the Lean Healthcare Summit happening in Johannesburg on 26 October, key note speaker and CEO at ThedaCare Center for Healthcare Value, Dr John Toussaint, explains why he believes the Lean methodology is the future of healthcare efficiency.


Tell us about your clinical background and how you got involved in Lean Healthcare. 

I’m a physician, an internal medicine specialist and I have been involved in administrative roles for the last 25 years. I was the Chief Medical Officer of our integrated healthcare delivery system in Wisconsin and then CEO. When I became CEO we started to experiment with the principles of Lean Manufacturing and when I tried to apply those to healthcare, I found that they were quite applicable. We had great success in reducing cost and improving quality for our customers or patients with the use of the Lean methodology.

Now I run the Center for Healthcare Value, which is an international educational institute where we train healthcare executives and physicians from around the world on these principles and coach leaders of individual organisations as they attempt to change the culture of their organisation. I’ve just released another book related to this transformational journey called ‘Management on the Mend’ and it’s the story of many different health systems in North America, both US and Canada, which have been applying these principles.

Briefly walk us through the Lean transformation journey in a healthcare context. What is a typical starting point and what issues are hospital managers and the like trying to address?

The core outcome is to have everyone in the organisation able to identify and solve problems every day. In the typical healthcare management system problems end up on the manager or executive’s desk and they are tasked with solving them all. So what this methodology does is it pushes decision making down to the people that are actually adding value to the patient – be it the nurse, physician, and/or technician – meaning that leaders relinquish their power to them to identify and solve problems.

You might imagine that this approach requires a different type of behaviour on the leader’s part because most of healthcare is managed in a command and control fashion. What we are not suggesting is that leaders relinquish their leadership roles, and what doesn’t change is their responsibility to set the direction for the organisation and decide what’s important. I find that in most healthcare systems there are way too many strategic initiatives that have been directed by senior management but are being carried out by staff whose roles are with the patients. Therefore by reducing the number of initiatives, they are focused on identifying and solving problems every day.

This shift is how we actually build a different type of management system – I’ve written about this in many publications where I describe the difference between a Management by Objectives management system and a Management by Process management system. Edwards Deming introduced the concept of Management by Process probably 40 or 50 years ago, and in his book ‘Out of the Crisis’ in 1982 he defined 14 principles of a Management by Process system. What we have done is taken that to the next level and identified the core elements of Management by Process that every executive and manager in healthcare needs to learn. And that’s really what we teach at the Center: the core principles of that management system that is going to help relieve front-line workers of unnecessary wasteful activities and unleash their creativity to recognise and resolve problems on a daily basis.

I wanted to talk about the collaborative care model that you’ve designed – what had to be in place to enable a physician, nurse and a pharmacist to simultaneously meet a patient within 90 minutes of admission?

Everything we have done has been in line with the methodology of small tests of change. So, in the case of collaborative care we didn’t convert all of the 100s of hospital beds to this model with a light switch. We took a 12 bed unit and redesigned the space and the roles and responsibilities of all of the people within the unit, i.e. the physician, the pharmacist, the nurse, the technicians, etc. We then ran an experiment in that unit with 1,500 patients over 11 months. We had very specific things that we were looking for: patient satisfaction results, quality performance results, very clearly defined quality metrics, and overall cost and safety results. We had baseline performance on all those things and after running the experiment for 11 months we found that this collaborative care process dramatically improved quality, dramatically lowered costs, and dramatically improved patient satisfaction.

We then had 11 months of data which we could take to the rest of the organisation and throughout the experiment, the physicians and nurses were welcome to come and see the new unit and get an idea of what we were trying to do there. Now the doctors didn’t necessarily like the idea of a nurse, a pharmacist and a case manager being in the room during their first examination of the patient but when they saw the data they said, “Well, this is just better care.” I think that’s the moral of the story: if you want to get physicians to change practice, you’ve got to have data.

And what was the response from the rest of the care team?

I had nurses coming up to me saying: ‘this is why I went to nursing school, so that I could be a leader on the team not somebody that just runs around and gives medications.’ The new role of the nurse in this model is to own the process of patient care – the nurse becomes the leader. Many nurses were really excited about this change in roles, and still are today. We have been able to recruit great staff because people want to work at the top of their licence, and that’s what this collaborative process allows everyone to do.

Would you say that a paperless environment and an adequate quota of staff vs patients were essential to the model’s success?

It depends on what you mean by that. Yes, we do have an electronic health record so everything is paperless. Defining what the right level of staff is an interesting question. A lot of people do bench-marking of staff to patient ratios, and when they visit us they find that our staff to patient ratios are some of the highest they’ve ever seen but we also have one of the lowest cost delivery systems in the US. The average cost per case in a US hospital is $10,000, and ours is $6,200. There’s a lot of other data that shows that our costs and length of stay, etc., are dramatically less than most in the US. So, I get a little concerned when we start talking about staff to patient ratios because what we’ve proven is that you can have a very high staff to patient ratio and still deliver very low cost, high quality medicine.

A lot of people think that reducing staff to patient ratios is how to keep costs down but that’s exactly the wrong conclusion. What’s important is to develop and design the process in the most efficient way and have all staff members working at the top of their licence to deliver the best value to the patient. I think that we need to throw staff to patient ratios out the door as a way of measuring quality and/or cost.

The reason for my question was in thinking about South Africa’s public health system and the widely known fact that state hospitals are hugely under staffed and overburdened and how the methodology would translate in the local context.  

What works here doesn’t necessarily work there but I can guarantee you that I’ve seen a tremendous amount of waste in the process of care delivery, and I can’t imagine I won’t see the same thing in South Africa. I’ve been to 162 hospitals in 16 countries in the last six years and what I usually see is about 30 to 40% of what’s done is waste, in other words it could be removed and not done at all, which would dramatically improve the throughput or the ability to see patients. I see that as much in public hospitals as I do in private hospitals. So everybody talks about staff shortages but why don’t we actually step back and look at how are we are actually delivering the care? If we can redesign that, take the waste out and start applying some of the principles that we’ve learnt from the Toyotas of the world, we can make really sure that we’re effectively utilising the people that we do have.

Let’s talk about the use of electronic health records and the impact on healthcare. Many of us follow the healthcare reform in the US and have an idea of the challenges to implementing EHRs and achieving meaningful use criteria, and so on. Tell us what we can learn from that process of trying to make appropriate use of medical information and patient records. 

Despite being mandated in the States, there’s still very little good information flow to the front-line. Our government might have thought that if we just implement EHRs everywhere that somehow we are magically going to reduce errors, reduce cost, get information that everybody needs when they need it, and that’s just not been true. A study will be published at the end of 2015 which shows that EHRs has had very little impact on the cost and quality of care delivery in the US, although it’s cost hundreds of billions of dollars. I’m a believer that technology is a tool, a tool that helps deliver a better process. If you don’t step back and redesign the processes of care first, all this electronic stuff doesn’t help – it just makes it more expensive. Now I’m in the minority in this, and I’ve testified before congress and usually get booed out of the room, but the reality is that the research proves what I’ve been saying for the last seven or eight years. What we ought to be focused on is how do we get the care delivery process designed around the patient, eliminate the waste in that process and then use the EHR as a tool to help us move the patient through the process.

We were one of the first organisations in the country to implement EHRs back in 1996 and I think what we are seeing emerging in the industry now is a set of processes that are actually beginning to build the clinical business intelligence that we need.

In our organisation, the person who designed our Business Intelligence system went out to the operations people and said what do you need to run your business? What do you need to improve the clinical quality and cost? He worked with them to build a series of about 120 different apps all available on a smartphone, that clinicians can access with the click of a button and get the information that they need, in real or near real time. It’s the information that they’ve decided is important to run their business, like: nursing hours per patient; or readmission rates in the last 24 hours; or infections in the operating room in the last 24 hours. EHRs alone are not going to get you the information you need. You have to design how you are going to pull data from different legacy systems and what information you actually need to run your business.

‘Fixing’ the healthcare system in this country is an enormous task and I think many are looking to the roll out of National Health Insurance as the deadline to do so.  Share with us your insights about the time it takes to realise an equitable, quality health system.

To put it in context, the US Department of Veteran Affairs, which is the healthcare organisation that takes care of all the US veterans, is the largest healthcare system in the world and it’s scattered across many countries. The Secretary of the VA, who reports to the President, just last month announced that they’re going to use the Lean methodology to completely redesign the VA system. Three weeks later the Director of the Centers for Medicare and Medicaid Services, which is our over 65 population insurer, said the same thing. So our government has decided that there is a way to care for the people in this country in a different manner and that this methodology that I’ve been talking about is the way that they’re going to do it.

Now from what I’ve seen in 16 countries I’ve visited – and South Africa will be number 17 – is that everybody’s got the same problem. I don’t care how you are funded; I don’t care whether you are a universal payer or utilise multiple insurance companies or a government system or a private system – everybody’s got the same problem. We spend way too much money and we do not deliver the type of quality performance that we need to deliver. And what is missing in all of the countries that I’ve visited is a methodology to fix that. What’s happened in the US is that because we spend the most money on healthcare of anybody in the world, and there is probably a trillion dollars of waste in our system, our government is finally waking up and saying it’s time to fix this problem and they’ve moved to this method to do that.

I don’t see why any other country in the world can’t make the same decision and start down the path of building a higher quality, lower cost health system. It’s going to take political will and perseverance to stand up and say we need to do something different. Healthcare around the world is fundamentally flawed and it’s time for government leaders to say this system is broken and we need to fix it to deliver value to the patient. We have tremendous evidence now from many countries and many health systems that there has to be significant change from a management and leadership perspective, and I think we have a pretty good road map to help that change happen. I can’t imagine that I’ll find anything different in South Africa that I’ve found in any other place in the world.


This article was first published on the eHealthnews site on the 21st of September 2015. To view the original post visit the eHealthnews website.