SILVER BULLET FOR BETTER VALUE: LEAN DISCIPLINES THAT TRANSFORM

SERIGRAPH OPERATING TEAMS—no slouches at quality and lean manufacturing disciplines—have made repeated benchmarking trips to Appleton, Wisconsin, to learn what ThedaCare, a four-hospital system with 5,500 employees, is doing to drive errors, infections, and waste out of its health care system.

Along with observers from all over the world, team members sit in on Friday morning “report outs,” when cross-disciplinary teams of ThedaCare workers describe their latest projects that lift their performance to world-class levels. Every time, our people come back hugely impressed with ThedaCare’s absolute commitment to finding breakthroughs in quality, service, and cost reduction.

There’s an irony in this turnabout in who’s learning from whom. John Toussaint, ThedaCare CEO, learned first about quality and lean disciplines from pioneers in the manufacturing world. He was one of the first to apply those principles to medicine. Now we are learning from him and his people.

Toussaint was a practicing physician in internal medicine and the business leader of ThedaCare, where he started eight companies, including a health insurance operation that sold for $40 million.

Most importantly, he is unafraid of necessary change. When a system is broken, as the economic and quality sides of medicine have been for decades, Toussaint goes looking for new business models.

His quest inside the medical world was similar to the path Serigraph was taking to come up with a better model on the payer side of the health care equation. So we ended up collaborating on a range of issues.

Toussaint’s organization embraced quality measurements way ahead of other providers, beginning in the mid-1980s. Initially, defect rates ran between 50 and 250,000 per million opportunities. Those are not good numbers. But the metrics helped ThedaCare cut down on variation and errors in standard practices.

Still, he wasn’t satisfied. Improvement wasn’t moving fast enough in a still-broken system. Toussaint turned to the literature on the Toyota Production System for an even better model. He visited and benchmarked on lean companies like Ariens, an outdoor power equipment maker, HNI, a leading commercial furniture manufacturer, and Toyota itself.

If those companies could lead their industries, he reasoned, why wouldn’t their obsession with lean disciplines work in medicine, too? Ironically, Toyota strayed from its core tenet of leanness in the last decade as it chased volume, and it is now paying the price with recalls, fixes, and market share retreat.

Toussaint launched ThedaCare into a lean journey in 2003. In the ensuing years, ThedaCare has delivered much higher value to its customers.

The voice of the customer always drives the improvement process. It’s patient-centric, not doctor-centric. He pushed the organization to make continuous improvements in all three components of value—quality, service, and price. He demanded not only incremental improvements, but quantum leaps, as well. That’s called discontinuous improvement.

As an example, its Appleton Medical Center has reduced the door-to-balloon time (the elapsed period from when a patient enters the hospital after a heart attack to an angioplasty in place) to thirty-seven minutes, the best in the country (see Exhibit 11-1). That’s down from ninety-one minutes in 2005. Even the outlying hospitals in its system beat the national target of ninety minutes, using helicopters when necessary, to average seventy-five minutes.

As another example, Toussaint is now challenging his organization and other medical providers to get to “zero.” He wants zero incidents of infections in his operating rooms and zero medication-reconciliation errors.

He was told his demand was impossible. But ThedaCare is getting there. It has had no medication errors for the past two years in one unit, and another has totally eliminated infections. That is a huge accomplishment, because errors in either area can kill. And errors are rampant in the overall medical world.

With those kinds of results, it became obvious that Serigraph should seek out lean medical enterprises in determining which to use as Centers of Value.

Further, there is a philosophical alignment. Since Serigraph uses lean disciplines rigorously in its own operations, we talk the same language.

ThedaCare is not alone in its war on infections. Partly in response to pressure from activist groups, including Consumers Union, 105 hospitals reported zero central line infections, the catheters into large veins.

The main solution is pristine sanitary procedures. We want our people to seek treatment for elective procedures at those high-quality facilities, even though the drive to get there may be longer.

EXHIBIT 11-1

ThedaCare Door to Balloon 2006-2008

ThedaCare is also at zero for mortality in isolated coronary bypass surgeries (see Exhibit 11-2).

Indeed, ThedaCare’s results have been so impressive that I tried to get Toussaint to set up a clinic in our market, but it was just outside his strategic geographical area. As a second-best solution, we are pushing our current providers to get more serious about their lean commitments.

In lean theory and practice, all processes and activities start with the voice of the customer and so it is at ThedaCare. A care coordinator, usually a nurse, meets the patient/customer on admission and becomes the quarterback directing the action from beginning to end of treatment.

If it’s a knee injury, a sports medicine doctor is called in and quickly orders up the necessary tests. He gets the injured person in front of the orthopedic surgeon within a couple of hours, but only if it’s necessary. If surgery is required, it is set as early as the next morning if the patient desires. It’s smooth, efficient, and patient-friendly. Money is saved, because only necessary tests, visits, and work are done. The patient is fully informed and educated all the way through. Patient satisfaction numbers are off the charts.

EXHIBIT 11-2

Isolated CABG Mortality

Similarly, a woman coming in for a morning mammogram has her results by that afternoon. Anxious waiting is cut way down.

Most lab tests are accomplished at the front end of visits to a ThedaCare doctor, so more than three-quarters of patients have their results back before the end of the visit. That means some important things:

1. They usually don’t have to come back for a follow-up visit.

2. They leave with an informed medical plan for whatever condition is being addressed.

That responsive service flows out of a corporate culture that involves every employee in continuous improvement of all facets of the enterprise. That cultural mindset looks at medical errors as defects in the process that need to be eliminated. In its five-year lean journey, Toussaint estimates that hundreds of thousands of potential errors have been prevented.

“The elimination of errors is a bottom-up exercise that needs to involve every single person in a rigorous way,” said Toussaint.

Considered a prophet in his industry, Toussaint left his CEO post at ThedaCare to create the ThedaCare Center for Healthcare Value, an organization that promotes the lean philosophy in health care across the country. He has teamed up with the Lean Enterprise Institute.

“The solution to delivering better care isn’t about having electronic health records, more insurance coverage, or more advanced technology,” said Toussaint. “Unless we use lean thinking to fix the waste and errors first, all we’re going to do is develop different ways to pay for and perpetuate a broken system.”

The end result of his lean exercise showed up in 2008 quality statistics released by the Wisconsin Collaborative for Healthcare Quality (WCHQ). Its St. Mary’s Hospital scored 100 on quality for three cardiac procedures.

Those kinds of outcomes should attract discriminating consumers. Competition between providers should be based on value, most importantly on quality, not on fancy campuses and expensive (but often unnecessary) equipment.

The lean approach also yields attractive prices. The WCHQ comparative ratings put prices at ThedaCare’s major hospital at 30-40 percent below Milwaukee prices for the three heart procedures. That, along with the quality outcomes and the intimate service, makes traveling a little farther worth it.

The WCHQ Web site, www.wchq.org, includes a report that shows low prices and high quality often run together.

This is not to canonize Toussaint or to give five stars to ThedaCare across the board. Their system is not perfect. They acknowledge that their lean journey has only begun. But this is the kind of operation that payers and consumers should be looking for.

Further, systems like ThedaCare should be given big bonuses from payers, including public payers like Medicare and Medicaid, for keeping people well, for keeping them out of the hospital, and for eliminating errors.

Here are some other tell-tale results from ThedaCare’s lean journey:

• Its pilot program for collaborative care pulls together a team of a doctor, nurse, medical assistant, and pharmacist for inpatient treatments. That method has reduced prescription reconciliation errors from an average of a little less than one per day per patient to zero. It is the standard for care for its new inpatient tower.

• Its clinic in Kimberly, Wisconsin, has most lab tests back to the doctor in fifteen minutes.

• If a patient calls in and needs to see a doctor that same day, a revamped scheduling system makes that happen 89 percent of the time.