Subject: [SHC] Dr. Gene Lindsey's Healthcare Musings Newsletter 13 Oct 2017

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13 October 2017

Dear Interested Readers,

What’s Inside and the Brink of Disaster

I was in Indianapolis this week for Simpler’s 12th Annual CEO Symposium. The theme for this year’s meeting was “turning strategy into action.” The meeting was held in Indianapolis to take advantage of the multi year relationship between Simpler and the Indiana University Health system. The folks from IU Health were great hosts and one of the highlights was a visit to one of their suburban hospitals for presentations and a gemba walk to see first hand how they are turning strategy into action across their huge delivery system.

This was my third trip to IU Health, but it has been three years since I was last there. The progress over the last three years has been remarkable. What is even more remarkable is that IU Health has made steady progress, even though there has been significant turnover in their senior management that includes the CEO, the COO and CMO of the system. Time and time again I have observed how programmatic momentum and strategic plans are vulnerable to transitions in senior management. Lean progress is particularly vulnerable to leadership changes, even when a board makes Lean expertise a criteria in the selection of the new leaders. Indiana University Health seems to have passed the Lean baton from one CEO to the next as smoothly as a championship 400 meter relay team on the way to a record setting time in the Olympics. That is an accomplishment worthy of some celebration.

Lean transformations require dedicated leadership. The larger and more dispersed an organization is, the harder it is to insure alignment of leadership and experience across the enterprise. IU Health has about 30,000 employees in fifteen hospitals across the state of Indiana and provides care to about a third of the population with 125,000 admissions and more than 2.5 million outpatient visits a year. Riley Memorial Hospital for Children is the only pediatric hospital in the state. Spreading Lean culture and tools effectively enough to get measurable improvements across such a dispersed system in five years is a remarkable achievement that deserves discussion and study because there are surely transferable lessons.

With Lean, IU Health has made significant progress toward the Triple Aim with measurable improvements in quality and service as well as substantial reductions in expense through more efficient use of its resources. I was flabbergasted when the CEO, Dennis Murphy commented that over the previous four years the improvements driven by Lean had enabled IU Health to absorb almost 500 million dollars of revenue reduction. There is no doubt that Murphy is a CEO who realizes that it is his responsibility to lead his organization from volume to value. Take five minutes to listen to an interview during which he describes his approach to the transformational challenges facing IU Health.

On all of my trips to Indiana University Health I have been impressed by the leadership of Alicia Schulhof, Senior Vice President, Office of Transformation. If you clicked on the link you were able to read an article from HealthLeaders Media entitled “How One Woman Saved IU Health $54 Million.” The article is short but it nicely presents the same “reason for action” that I heard on my first trip to IU Health in 2013. The former CEO, Dan Evans and the board of IU Health realized back in 2012 that their inefficiencies, costs, and service defects were not competitive and would become even a greater problem as the market shifted from paying for value rather than volume. IU Health had previously tried various forms of continuous improvement but was dissatisfied with the outcome of their efforts.

The article quotes Ms. Schulhof who explained that after an internal study IU Health decided to begin a Lean journey because it "transforms culture." Lean was attractive because it made it possible for everyone of IU Health’s 30,000 employees to become a problem-solver. What I saw on the return trip this week revealed that IU Health has made substantial progress toward that audacious goal.

After a site visit and gemba walk at IU Health North in Carmel, Indiana, the conference settled into a series of informative and inspiring presentations from CEO Murphy, Senior VP Schulhof, the system COO, Alfonso Gatmaitan, and a superb faculty of outside speakers assembled to thoroughly examine how to turn strategy into action, or “strategy deployment.” As I listened to the speakers I was reminded of my own initial confusion about Lean, and my own journey from the challenging learning process that moves you from understanding “Lean tools” to appreciating what it means for an organization to mature from “doing Lean” to the higher level of “being Lean.” The major portion of this letter is a reflection on why Lean is more important to healthcare now than ever before.

Before my Lean revelry, I feel it is necessary to comment first on the horror of the California wildfires and the unnecessary uncertainties of healthcare that are derivative of the incompetency of our political leaders.

Dozens of people have already been discovered to have died in the fires in neighborhoods near Santa Rosa, California and the surrounding valleys of Napa and Sonoma whose names usually trigger thoughts of wines and relaxing mineral baths, and not the incineration of those unable to get out of the way of rapidly moving flames. Hundreds of people are still missing. The pictures on the evening news show blocks and blocks of homes that are reduced to ashes and are eerily similar to the scenes from Puerto Rico where wind and water were the sources of the devastation and death. In times when the challenges are greater than the resources and strength of any one individual or of any single city, state or territory it is wonderful to know that we can call on our collective resources to do together what no one can do alone.

It is strange and difficult for me to understand how we can respond after the fact to anyone who has been the victim of a natural disaster, but we can not prospectively exercise the compassion and strategic thinking necessary to support individuals in their efforts to avoid the potential harm of not having access to healthcare. While Congress has been allocating many tens of billions of dollars for the relief of the victims of storms, they failed to renew the Children’s Health Insurance Program (CHIP) that provides healthcare to over nine million children. An excellent article in the Washington Post spells out the costs and the benefit.

The program cost the federal government about $13.6 billion in 2016. The program provided services that included, according to the government’s website:

  • Routine checkups
  • Immunizations
  • Doctor visits
  • Prescriptions
  • Dental and vision care
  • Inpatient and outpatient hospital care
  • Laboratory and X-ray services
  • Emergency services

The preventative care is free. There are copays required for many other services. The maximum premium for any family is 5% of income. As you might imagine the debate on renewal is yet another “bargaining chip” in the larger conversation about money spent on social and medical programs. One proposal would renew the program with substantial cuts. The federal government covers most of the cost for the recently expired program. States may need to fill the void if the program is not renewed or if it is renewed with reduced funding. You do not need to be a health policy wonk to imagine that there will be some states who fill the void and other states that throw their children into the void. Likewise I don’t think you need to be an economist to predict that monies saved today by reducing the medical benefits of children will be lost many times over when the consequences of the denial of care diminish the health of the affected children and lead to illnesses now or diminished health or productivity as adults years later.

We live in strange times when our president can show up two weeks after the fact of a devastating disaster and toss out rolls of paper towels. One could pass on that lack of poise and social grace except that now he is tweeting once again about how the victims are to blame and how the willingness of the government to help has its limitations, but perhaps that threat is just bluster for bluster’s sake. The executive orders that he signed yesterday were more than bluster and empty rhetoric.

There is still a great deal of uncertainty about how effective the executive orders that the president signed yesterday will ultimately be in undermining the ACA, but what is not uncertain is the intent. The picture of the signing looks much like the pictures of the celebratory signings of Medicare by Lyndon Johnson or of the ACA by Barack Obama. The celebrations in 1965 and 2010 were anticipating the extension of meaningful benefits for Americans who needed access to effective care. The picture of Trump's signing depicts the celebration of what may be an alternative path to undermine the ACA when multiple attempts to follow a legislative path have been rejected.

I think that it is incredibly sad that one of the people in the picture with a big grin on his face, Senator Rand Paul, is a physician. He is a complex fellow who can be congratulated for his consistency. He voted against Graham-Cassidy because it was not destructive enough. Perhaps he has a smile on his face in this picture because he is hoping that the executive orders will satisfactorily undermine care for those who can’t pay for their own care. If you clicked on the last link you will have read that he was strongly in favor of skinnied down policies sold across state lines for “associations.” If there is any good news under the surface of the exuberance and hyperbole of the president’s pronouncements about how wonderful healthcare is going to be because of the executive order he has signed, it is that it will take months of coordinated effort between three governmental agencies to get started and there will be no difficulty for creative lawyers to delay the process in court since it undermines the intent of ERISA regulations and is at variance with parts of the ACA which is still the law of the land.

My personal guess is that the executive orders are not the product of the president’s genius. I seriously doubt if he understands what they will do and how things might play out. One gets the sense that his presidency and his ability to generate public policy of value are scripted or contrived like a reality show, and this was the good theater that his writers produced because today he needed to celebrate something for his base following all of his recent setbacks.

Added to the original letter: To my horror while I finishing this note. and listening to last night’s eleven o’clock news there was a “late breaking” announcement that President Trump had signed another executive order to end the Cost Sharing Reduction (CSR) payments that make the products sold on the exchanges affordable for low income citizens and blunt the risks that are absorbed by insurers. I am speechless. In a companion article the New York Times published twelve ways that the administration is undermining the ACA. Over 17 million people get their care from the exchanges. Add those 17 million to the 9 million children at risk from the failure to renew CHIP, and I think that this president has done more than damage the ACA. He has damaged the stability of our very fragile system of care. This is a bridge too far.


What Lean Looks Like Today

I can easily remember how skeptical I was when Dr. Zeev Neuwirth first introduced me to Lean. I had been an enthusiast when TQM was introduced to me in the early nineties. The idea of fixing root cause problems made sense to me. Quality Councils made sense. I drank the koolaid and I was disappointed when the grand ideas went nowhere. As the organizational enthusiasm faded I tried to hold on for myself to concepts of “quality in daily work life” that I had learned.

For the next dozen years we continued to establish goals for improved performance that were rarely met because the goals were not supported by any process or change in workflows that enabled their achievement. Good organizational intentions without effective supports can be frustrating. Realizing measurable positive changes by exhorting individuals to work harder leads to managerial frustration and frontline burnout and cynicism. I was polite and accepted the stack of papers that Zeev gave me to read and did introduce him to our CEO since I was the Chairman of the Board and did not want to undermine his enthusiasm even though he was not resuscitating mine.

Zeev had recently been hired as IM Chief of our largest practice where I saw my primary patients for a few hours each week. Our practice was not working well. We were a collection of doctors and nurses floundering individually together. In less than a year I was an enthusiastic supporter of the changes he was introducing, not because of my personal participation, that came later, but because the work he had done with the support staff using some rudimentary tools from the Lean tool bag had made my work life better.

My patients and I were passive beneficiaries of the good work of others. They had generated value for us by making the processes that controlled my work day more efficient. Zeev impressed not only me but also the CEO and was named VP of Practice Improvement and Innovation. A year later after I became CEO, Zeev had done enough piloting of Lean through a grant from Blue Cross for us to plausibly present to the other members of the senior management team the idea that we should embark on an organizational wide process of transformation using Lean. In the interim we had visited Group Health and Virginia Mason in Seattle and ThedaCare in Wisconsin and were enthusiastic about following their lead.

These were the memories that flooded my mind as I walked around at the IU Health North Hospital and then listened to the IU Health leadership talk about their “journey.” They started their journey for reasons not much different than the ones that motivated us. They needed to lower their costs, improve their services, and revive their staff if they were going to succeed while realizing the external pressures of payment reform, demands for greater transparency, and a growing number of regulations and requirements associated with the demands of both public and private payers.

What I heard the medical professionals at IU Health North saying was reminiscent of what I had heard from the staff in every job in our practice, from building maintenance staff to medical specialists. They enjoyed making a difference. They enjoyed the opportunity to acquire the skills that enabled them to change the work they did in ways the added value for the patients they served. From executives to medical assistants, Lean enabled staff talk about what a joy it is to be able to do more for patients because that is why they went into healthcare. In every organization that I have visited that has gone through a few years of implementing Lean there has been improvement in the measurements of employee and patient satisfaction as well as in the quality and business metrics. I can confidently say that Lean “when done right” can help any organization do today’s work more effectively than it did yesterday’s work. If any organization gives Lean a chance and has the initial help of an experienced consultant and the alignment of its board, senior management, middle management, and clinical leadership the results will always be remarkable.

Doing today’s work better than you did yesterday’s work is necessary but hardly sufficient for tomorrow’s success. The challenges of tomorrow will surely be greater than today’s work. Being satisfied with the achievements of 2017 means that your practice or health system will be floundering in 2018 or 2020. Change is not something we usually chose. Change is what is forced on us by external realities and forces over which we have little if any ability to block or slow. “Doing Lean” improves you today. “Being Lean” and learning how to effectively use Lean to develop breakthrough strategies and then effectively deploy those strategies requires a cultural transformation to enable effective “strategy deployment.” My heart skipped a beat when I heard the nurse leader for transformation at IU Health North say that their goal was a “cultural” transformation that would enable them to fulfill their mission of better serving their community.

Every speaker at the conference referenced directly or indirectly the truth that healthcare professionals will engage in the deployment of strategies for improvement if they have effective Lean leaders who understand that their Lean role is to be seen frequently where the work is done and earnestly practice their role as effective coaches, mentors and teachers. When Lean fails, it is usually because senior leadership has retreated to its offices and endless meetings and tries to succeed by announcing difficult to achieve objectives described with numbers and opinions devoid of input from the people who do the work. Lean tools don’t work for long without the participation of senior managers.

If you go to reasonable Lean references like the website of the Lean Enterprise Institute and look for the “principles” of Lean you can read:

The five-step thought process for guiding the implementation of lean techniques is easy to remember, but not always easy to achieve:

  1. Specify value from the standpoint of the end customer by product family.
  2. Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value.
  3. Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.
  4. As flow is introduced, let customers pull value from the next upstream activity.
  5. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

All of those words are true. It is a fifty thousand foot view of the process that they admit is not always easy to achieve. The LEI recipe above is missing the key ingredients, Lean leaders and a culture of trust. All the speakers that talked about turning “strategy into action” at the conference understood that for their organizations to be transformed they must first accept the transformation for themselves. The accomplishments of IU Health, like the famous accomplishments at ThedaCare, Virginia Mason, and Denver Health are testimony to what can be accomplished when the leadership invites their colleagues into a process of transformation that they are also experiencing.

Tomorrow’s work can be exciting. IU Health is proof that Lean can be used to shape an organization for tomorrow from many distributed pieces. The innovations that are rapidly being developed for tomorrow that are built with big data, augmented intelligence, and creative applications of telecommunications will be much more beneficial when they are woven into workflows and strategies with the benefits of Lean thinking and culture. Lean will enable the successful competitors in markets where multiple organizations seek the same patients through transparently lower prices and substantially better access, service and clinical quality. Being Lean is the greatest competitive competency a provider of healthcare can develop to insure that their mission will survive a future that seems harsher with each passing executive order.


Embracing Fall

Downtown Indianapolis is sort of quiet on a weekday. It does not have the bustle on the street of a New York, Chicago, or Boston. One gets the idea that most of the activity is somewhere out on the Interstate Highways that ring the city. Like Denver, the airport is out of town located on what must have been farmland in the not so distant past. What is remarkable is that cornfields have been replaced by more than runways and terminals. There are acres and acres of solar panels along the highways around the airport.

Downtown is quiet, but there is plenty of parking and the streets are wide and clean. The state capitol building is lovely and the office buildings of state government look well designed and efficient. There are several huge museums that round out the complex, and there is art or invitations to see art on every corner. To my delight there is a state park along the White River just past the capitol. I love large urban parks and the White River State Park is a nice place for a long walk. Just across from the Park is the largest building downtown, Lucas Oil Stadium, home of the Indianapolis Colts. Not far away is the second largest downtown structure, the coliseum where the Pacers play.

On my walk in the park I kept trying to imagine what it might have been like last Sunday when Mike Pence flew back to his old stomping grounds so that he could walk out of the game when black football players exercised their First Amendment rights. Vice President Pence is an expert on the Second Amendment and will not participate in any conversation that might undermine a very "liberal" interpretation of the benefits it offers gun owners. To be fair I should salute the vice president for exercising his First Amendment rights when asked to do so by the president. You can see how weird all of this seemed given the tranquil environment of downtown Indianapolis. Strange things can happen in nice places.

It as a great relief for me to no longer need to live from game to game with the Red Sox. Had they won last Monday and again on Wednesday night as the Yankees did against Cleveland, I would have been forced to attend the first game of the American League Championship Series at Fenway Park tonight between the Yankees and the Red Sox. That would have been difficult. As it is, I am free to fish until sunset after I have had a good long walk in the dazzling color that surrounds me. Today’s header is from a walk last week. Yesterday there was even more color along this side road than is pictured in the shot from last week. I need to monitor the progress on a day to day basis. I am finally embracing fall. I hope that you will be soaking in the color on long walks, runs or bicycle rides this weekend. Like all good things, the colors will not last forever. Catch them while you can.
Be well, take care of yourself, stay in touch, and don’t let anything keep you from making the choice to do the good that you can do every day,

Gene
Dr. Gene Lindsey
The Healthcare Musings Archive

Previous editions of the "Healthcare Musings" newsletter, by Dr. Gene Lindsey are now archived and available to you at:

www.getresponse.com/archive/strategy_healthcare

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