Final Contract Report
Summary
Background and Goals
Health care is faced with the challenges of large numbers of uninsured and
concerns for quality, safety, cost, and workforce shortages. Ultimate solutions
to this complex array of issues will likely be national, but health systems
can contribute to solutions now by developing approaches that lead not just
to improvements in certain processes within the system but also to developing
and using broad and deep approaches that lead to system transformation.
The difference between process improvement and transformation is often not
appreciated. Improvement implies that one is doing something in a better, but
not radically different, way. Transformation, however, implies a more systemic
and profound change in form, function and/or character—an emergence from
what was to something quite different. In this regard, it is noteworthy that
the Institute of Medicine has chosen to use "transforming" rather
than
"improving" in its statement of needed change in the Nation's
health care: "The need for leadership in health care has never been greater.
Transforming the health care system will not be an easy process. But the potential
benefits are large as well."a
As a microcosm of the larger U.S. health care system, Denver Health has faced
the same myriad of problems and has had a track record of innovation. This
report summarizes the development, implementation, and evaluation of the process
of transformation in the Denver Health system.
The project addressed management and evaluation of one component of this transformation
effort, the implementation of Lean within an integrated health care system.
The overall Lean initiative aimed at reducing waste in processes throughout
Denver Health in order to assure that:
- Employees did not perform tasks of no value.
- Patients did not endure processes of no value.
- Resources were not used for no value.
Achieving these three goals would assist Denver Health to continue to operate
on a sound financial footing, despite growing numbers of uninsured patients,
and would therefore permit an increase access to care, foster more patient-centered
care, and enhance staff satisfaction.
Context
Denver Health is an integrated, public urban, safety net institution. Its
components include an acute care hospital with a level 1 trauma center, the
911 emergency medical system for Denver, the public health department, eight
federally qualified community health centers, 12 school-based clinics, a 100-bed
non-medical detoxification facility, correctional care, a health maintenance
organization, a call center, and the Rocky Mountain Center for the Medical
Response to Mass Casualties and Epidemics. The system serves patients from
every Colorado county, 1 in 4 people in Denver, and 35 percent of Denver's
children. Denver Health is the major provider for the uninsured ($280 million
in 2005) and Medicaid patients in the State.
Denver Health's integrated approach to transformation was developed as part
of a year-long information-gathering and planning process, which was led by
the Chief Executive Officer (CEO)/Medical Director. Five integrated areas were
identified as necessary for system transformation. The planning process led
to the conclusion that focusing on a single component of the puzzle or just
on information technology (IT) would yield many process improvements; but only
a multipronged, integrated approach would yield transformation. ;
In order to emphasize the integration of these components and to communicate
this to the Denver Health workforce, the project team developed the concept
of a puzzleb that includes the following tightly
fitting pieces:
- Right physical environment.
- Right people.
- Right process.
- Right communication and culture.
- Right reward system.
When the system transformation puzzle is presented graphically, it includes
an overlay of information technology. This IT overlay conveys the role that
information technology plays in holding the puzzle pieces together.
For each piece of the puzzle, a strategy for implementing transformation in
that domain was adopted. Philosophies and tools used by other industries were
adopted and implemented for right people, right process, right communication,
and right reward. Talent matching (which selects staff based on personal characteristics),
Lean (which focuses on waste reduction) and structured communication were utilized
for the components of right people, right process, and right communication,
respectively. The simplest of the pieces to implement was right physical environment
because Denver Health was building new facilities and substantially remodeling
existing facilities. In this effort, the focus was on patient safety, quality,
and customer service in architectural design and construction.
For right process, Toyota Production Systems, or Lean, was selected because
it was a philosophy and a tool set, both of which could be easily understood
and applied across the work force and because it appeared to have the capacity
to yield important outcomes. Lean is a philosophy based on eliminating all
waste because of the disrespect waste conveys to workers and customers—in
this case, patients. Waste is viewed from the customer perspective. All employees
are encouraged to adopt a culture of eliminating waste and to utilize a set
of tools that permit the identification and elimination of waste when it occurs.
The implementation of Lean required broad general training and intense training
of a group of 50 individuals in the use of the tools. These individuals, known
as Black Belts, are mid- to senior-level staff and clinicians extensively trained
in Lean tools who are responsible for applying Lean tools as part of their
daily work to eliminate waste within their areas and report the impact of these
improvements to the CEO on a monthly basis.
One setting in which the Lean tools are applied is termed a rapid improvement
event (RIE). This week-long event utilizes a team which focuses on a particular
process with the aim of reducing 50 percent of the waste. The event requires
prior preparation and subsequent monitoring of outcome over time. It is the
organization and evaluation of these rapid-cycle efforts which was the focus
of this project.
Objectives
There were two distinct sets of objectives in this project. The first relates
to the use of Lean as a component of Denver Health's system transformation;
the second set relates to the outcomes of this specific project to create an
approach to managing and evaluating RIEs and other Lean activities.
The primary objectives for the use of Lean were to demonstrate the following:
- The philosophy and tools of Lean would be accepted in a health care setting.
- Application of the tools would improve processes.
- The tools will eliminate waste as reflected in organizational and financial
measures.
The primary objectives of this specific project regarding management and evaluation
of the implementation of Lean were to:
- Develop processes and structures capable of coordinating and aligning approximately
50 rapid improvement events and other Lean applications throughout Denver
Health.
- Develop assessment (evaluation) methods and metrics for evaluating the
implementation and impact of these RIEs.
- Provide timely feedback to project participants and to those charged with
coordinating projects and use this information to foster learning about RIEs.
- Use the evaluation methods and metrics to assess the overall contribution
of RIEs, and draw lessons learned for future efforts.
- Summarize and disseminate lessons learned from the RIEs to achieve hospital-wide
change through coordinated microsystem change.
Methods
A detailed coordination and evaluation plan was developed which included a
description of the organizational, communication, and coordination structure
for implementing and evaluating many RIEs for system-wide change. This plan
also identified the application of Lean Toyota Production System methods as
the tool used for improving processes throughout the system. As these plans
were created with oversight and approval from the CEO and executive staff,
implementation and follow-through with these plans were supported by the organization.
As progress was communicated throughout all levels of the organization, lessons
learned during the process provided the opportunity for these plans to be adjusted.
Results
The project achieved the objectives related to Lean in health care. The employees
accepted the philosophy and tools of Lean. All the individuals asked by leadership
to train as Black Belts accepted. An employee survey revealed that 73 percent
agreed with the statement that they understood the Lean philosophy and how
it reduces waste and helps maintain the mission.
Within an 18-month period, 205 Black Belt projects and 59 RIEs were coordinated,
implemented, and evaluated. These events occurred in support and clinical areas.
Process improvements were demonstrated in both areas. Denver Health has realized
$2,694,219 in cost savings and/or revenue enhancements to date, directly related
to both individual Black Belt projects and RIEs—with the greatest financial
benefit deriving from RIEs. (The value of these benefits does not include a
translation of benefits related to quality or process improvements that have
non-monetary direct benefits, such as improvement in the rate at which surgery
patients receive an antibiotic in a timely manner.)
These benefits are a conservative estimate and are not annualized. The direct
cost of implementing and evaluating these projects was $875,000 over this 18-month
period. Therefore, Denver Health has currently realized a net gain of $1,819,219
from the Black Belt projects and RIEs implemented during this time frame. This
net gain was expected to increase at a greater rate now that the structure
for system transformation has been created and is stabilized, and this has
in fact occurred.
The results achieved the objectives related to the specific project goals
to manage and evaluate Lean. Over the period of the project the structure and
process for coordinating and aligning the Lean activities evolved. Initially,
the Black Belts were the key implementers of Lean via individual projects.
This evolved to the use of the concept of strategic value streams. These value
streams were high-level process flow diagrams depicting the process flow of
five critical components of the organization. The five critical areas were:
- Inpatient flow.
- Outpatient flow.
- Operating room flow.
- Access to patient care.
- Billing processes.
From these high level flow diagrams RIEs were identified and depicted. Full-time
facilitators were hired to help with the preparation, execution, and followup
from the 1-week RIEs. Outside consultants were also hired to facilitate and
teach at the actual events.
The evaluation process evolved to reflect metrics at four levels: Black Belt,
RIE level, value stream, and system. Both the reporting and the review at each
level were structured. The metrics were collected and reviewed by a three-member
team composed of senior financial analyst, senior facilitator, and health services
research director. Data were reviewed monthly with executive staff and the CEO.
Finally, a key organizational benefit to implementing Lean was that this tool
was embraced by all levels of staff throughout the organization. Employees
see the benefit to removing waste from not only the patient point of view but
also from the point of view related to their own job activities. Most people
would prefer to work in an environment in which their job activities are not
wasteful but contribute to the betterment of the organization. With this acceptance,
a culture of change has evolved in which the other pieces of the puzzle have
also been embraced by the employees. A key to achieving system transformation
is for employees to adopt this culture of change and improvement throughout
all levels of the organization.
Challenges
The challenges of transforming health care systems are many and expected when
undertaking such a complex and all-encompassing change in health care processes.
These many challenges can be overcome if they are accurately communicated and
understood so that lessons can be learned and adjustments made during the process.
Conclusions and Future Research Considerations
The need for transforming today's approach to health care delivery is imperative.
The approach to transforming health care is complex, requiring a multipronged
effort, which can benefit from the application of tools with demonstrated success
in other industries. The primary conclusions and observations from this study
that contribute to the field of health care redesign follow:
- System transformation requires a multipronged approach, where components
of the approach reinforce each other.
- Tools from other industries should be reviewed and adopted where appropriate,
and advice from other industries should be solicited because other industries
can provide unique and clear perspectives to improving health care processes.
- Effective system transformation requires a thoughtful approach, including
an emphasis on the development of an internal communication structure for
all employees.
- System transformation takes time; benefits may not be realized for 1½ to
2 years.
- The coordination and evaluation of the implementation of system transformation
is complex, requiring the creation of a clear and effective structure and
methods.
- The coordination of many RIEs requires continuous communication and participation
of staff throughout all levels of the organization.
- The evaluation of the many RIEs needs to occur simultaneously with the
planning and coordination of the projects, as most operational staff will
need guidance from evaluation experts in clearly defining the measurable
problem and the related metrics.
- As health care systems are complex and influenced by many internal and
external factors, it is a challenge to directly attribute improvements realized
from many rapid events to changes (positive and negative) in metrics at the
system level.
- In order to affect system-wide change it is necessary to train and mobilize
staff throughout the system, creating an environment and culture of continuous
process improvement. This training and mobilization requires staff time and
the hiring of some new staff (2-10). The costs associated with these resources
can be expected to be offset within 1½ to 2 years. Also, with this
new culture, continuous process improvement becomes part of the daily work
of all employees.
Considerations for future research in system transformation include:
- A template for translating Lean tools into the health care environment
should be created using robust health care examples. Although the literature
on Lean is robust, there is no easily understood and readily available approach
for implementing Lean in health care.
- A forum for sharing lessons learned from other systems using Lean for health
care system transformation would support the dissemination and success of
Lean in health care. This could be done by funders, vendors, or systems which
are using Lean.
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Background and Purpose of
the Project
Health care is faced with the challenges of large numbers of uninsured and
concerns for quality, safety, cost, and workforce shortages. Although ultimate
solutions to this complex array of issues will likely be national, health systems
can contribute to solutions now by developing approaches that lead not just
to system improvements but to system transformation.
This report describes a multipronged construct for transforming a large integrated
health care system (Denver Health) that began with an AHRQ-supported comprehensive
planning phasec and continued with AHRQ support of
the project detailed here.d The objectives of the
latter may be stated as follows:
- Develop structures and processes capable of coordinating and aligning approximately
50 rapid-cycle process improvement projects that will take place in a wide
range of departments and units within Denver Health.
- Develop assessment (evaluation) methods and metrics for evaluating the
implementation and impact of these projects—with particular emphasis
on measures of patient safety, quality, efficiency, and customer service. Whenever
possible standardized, validated measure that are in wide usage should be
included. Evaluation should include both summative and formative methods.
Attention should be paid to important considerations of design, such as nature of
comparison groups, time frames and evaluative standards.
- Provide timely feedback to project participants and to those charged with
coordinating projects for the hospital as a whole and use this feedback to
foster learning about rapid cycle projects and the overall redesign effort.
- Use the evaluation methods and metrics to assess the overall contribution
of rapid cycle process improvement projects to hospital improvement and draw
lessons for future efforts at hospital improvement and transformation at
Denver Health and elsewhere.
- Summarize and disseminate lessons learned from the rapid cycle projects
and from the effort to achieve hospital-wide change through coordinated microsystem
change.
This report focuses on the process improvement component of the construct
by describing the following:
- Tools used.
- Creation and coordination of operational and evaluation structure.
- Evaluation of the impact of implementing these tools and creating structure.
- Challenges and lessons learned.
- Ways in which the challenges and lessons learned changed the redesign approach
throughout implementation and evaluation.
- Method by which the process improvement component of the construct intersects
with other components.
- Communication and knowledge transfer.
This report provides a description of the journey to transforming a health
care system (Denver Health) but it can be used by other operational leaders
as a guide for identifying components of the redesign effort that may be applicable
to redesigning their health care systems.
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Multipronged Construct for
Health Care System Transformation
An integrated approach to transformation was developed as part of the planning
phase for health care system redesign. This integrated approach was actively
led by Denver Health's Chief Executive Officer (CEO)/Medical Director
and emanated from the information gathered from the following steps that comprised
the 12-month planning phase:
- Assessment of system readiness for major redesign.
- Establish a perspective for redesign.
- Create a structure for the redesign process.
- Gather external data.
- Conduct literature review.
- Form an External Steering Committee.
- Conduct site visits.
- Gather internal data
- Conduct employee focus groups.
- Conduct patient focus groups.
- Observe current processes.
- Present data.
- Choose tools to enable redesign
As a result of this planning phase, Denver Health developed
A Toolkit for Redesign in Health
Care which was published by AHRQ in 2005 and describes these steps in detail.
During this planning effort a framework of the perspectives from which transformation
would be viewed was also created. The components of the framework are quality, safety,
efficiency, customer service, workforce development, and physical environment. Finally,
as a result of the information gathering phase, the following critical conclusions were
reached:
- Virtually all processes had substantial room for improvement.
- Improvement of processes would have a positive effect on the majority
of the components of the project's initial framework—specifically
quality, safety, efficiency, customer service, and workforce development.
- The workforce would need new tools to enable their active engagement
in meaningful process transformation.
- Methods and tools used by other industries had applicability in improving
these processes.
- Transformation required multi-component focus on people, process, and
communication/culture.
From these conclusions a construct for health care transformation was developed. It
was determined that for system transformation to occur it was necessary
to redesign the various components that comprise a health care system. Five
integrated areas were identified as necessary for system transformation. In
order to emphasize the integration of these components and to communicate
this to the Denver Health workforce, the concept of a puzzle with tightly
fitted pieces was created (Figure 1). The puzzle pieces are:
- Right physical environment.
- Right people.
- Right process.
- Right communication and culture.
- Right reward system.
The puzzle includes an overlay of information technology (IT) which is
intended to exemplify the role information technology can play in holding
the puzzle together. For each piece of the puzzle, a strategy for implementing
transformation in that domain was adopted.
Philosophies and tools used by other industries were adopted and implemented
for right people, right process, right communication, and right reward.
Talent matching (which focuses on personal characteristics), Lean (which
focuses on waste reduction), and structured communication were utilized
for the components of right people, right process, and right communication,
respectively.
The simplest of the pieces to implement was right physical environment
as new facilities were being built and existing facilities were being substantially
remodeled. In this effort, the focus was on patient safety, quality,
and customer service in architectural design and construction.
For right process, Lean Toyota Production Systems was selected. Lean
is a strategy for eliminating all waste from the customer perspective by having
all employees adopt a culture of eliminating waste and utilizing a set of
tools that permit the identification and elimination of waste when it occurs. The
Lean tools that were adapted from the manufacturing industry to the health
care industry to provide a foundation for health care process redesign are
described below.
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Tools for Process Redesign
Denver Health selected Lean Toyota Production Systems as the primary tool
for redesigning health care processes and reduce waste while improving efficiency,
workforce and patient satisfaction, and quality. The information that
was gathered from Denver Health's current processes dramatically underscored
the need for radical process redesign within all aspects of the health care
delivery process.
Fifty operational managers and clinical staff, including physician and nursing
leaders from the different operational components of Denver Health, were trained
in using the Lean principles and tools throughout the Denver Health system.
These individuals—known as "Black Belts" are responsible
for applying Lean tools as part of their daily work and reporting the impact
of these improvements to the CEO on a monthly basis.
The Lean tools adapted to the health care environment included the following:
- Tools which permit the identification of waste and impeded flow:
- 5S (sort, shine, set, standardize and sustain).
- Value stream mapping.
- Spaghetti diagrams.
- Tools which permit fixing the waste and impeded flow:
- Standard work.
- Pull and continuous flow.
- One piece flow.
- Visual signals.
- Quick change over.
- Kaizen (continuous improvement).
- Tools which permit use of tools in a focused manner:
- Rapid improvement events.
- 3P processes (related to creating the efficient design and use of new space).
These tools are well described in the Lean literature,
e,f,g
and only those that are detailed further in this report are described briefly.
a. Institute of Medicine,
Committee on Quality of Health Care in America. Crossing the Quality Chasm:
A New Health System for the 21st Century. Washington, DC: National Academy
Press; 2001, p. 5.
b. Go
to Figure 1 for system transformation puzzle.
c. "Improving
Efficiency Through Hospital Redesign" (AHRQ Contract No. 290-00-0014,
Task Order 7).
d. "Managing and
Evaluating Rapid Cycle Process Improvements as Vehicles for Hospital System
Redesign" (AHRQ Contract No. 290-00-0014, Task Order 11).
e. Liker JK. The Toyota
Way: 14 Management Principles from the World's Greatest Manufacturer. New
York: McGraw-Hill; 2004.
f. Womack JP,
Jones DT. Lean Thinking: Banish Waste and Create Wealth in Your Corporation.(1st
ed.) New York: Free Press; 2003.
g. Joint
Commission on Accreditation of Healthcare Organizations. Doing More
with Less: LEAN Thinking and Patient Safety in Health Care. Oakbrook
Terrace, IL: Joint Commission Resources; 2006.
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