INSEAD Library

Includes bibliographical references and index

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Improving Healthcare Using Toyota Lean Production Methods 46 Steps for Improvements Contents Preface .................................................................................................... xi Acknowledgments ....................................................................................... xiii Part I U.S. Healthcare System Problems and Solutions .............................................................. 1 Chapter 1 U.S. Healthcare System Problems .......................................... 3 Rising Health Insurance Premiums ...................................................... 3 Why Double-Digit Health Insurance Increases? .................................. 9 46.6 Million Americans (Almost 1 in 6) Are Without Health Insurance ............................................................................. 13 Motivating Healthcare Providers to Reduce Cost and Improve Quality ............................................................................. 15 Toyota Lean Production ..................................................................... 18 Waste in Healthcare ............................................................................ 21 Excess Healthcare Administrative and Overhead Costs . . . .............. 22 Excess Insurance Company Administrative and Overhead Costs .............................................................................. 26 U.S. Health Expenditures Are a Growing Percentage of GDP ............................................................................................ 30 U.S. Spends Twice as Much on Healthcare But Ranks 37th in Health System Performance ............................................... 32 Quality Problems in U.S. Healthcare ..................................................34 Past Failure of Continuous Quality Improvement and Total Quality Management ...................................................................... 38 Redesigning the U.S. Healthcare System ........................................... 39 Chapter 2 Respect for Employees ..........................................................41 Part II Reduce Healthcare Cost and Improve Quality by Using Toyota Lean Production Methods ............. 43 Chapter 3 46 Steps to Improve Cost and Quality in the U.S. Healthcare System ...................................................................... 45 Step 1 Define value from the perspective of the patient (customer) .............................................................. 46 Step 2 Map the patient's value stream ................................................47 Step 3 Walk through all your core processes, and observe how they work in detail ......................................................48 Step 4 Implement Toyota-style lean production methods .............................................................................. 50 Step 5 Train administrators, managers, and supervisors to be lean leaders ................................................................52 Step 6 Provide empathetic "change management" to ease the transition to lean ........................................................... 55 Step 7 Change "quality improvement department" to "quality and cost improvement department" ................................... 56 Step 8 Change the name "quality improvement manual" to "quality and cost improvement manual" .................................................57 Step 9 Educate every employee about the basic strategic plan of the organization ......................................................57 Step 10 Establish an improvement plan with goals to be accomplished by specific people and dates ...............................................59 Step 11 Implement a simple scorecard for the entire healthcare organization ........................................................................61 Step 12 Use a simple scorecard to monitor each department ..........................................................................63 Step 13 The board of directors initiates selected strategic quality and cost improvement goals ...................................65 Step 14 Publish an annual quality report for simultaneous review with the annual financial report ..............................66 Step 15 Create a rapid improvement team (RIT) to make quick cost and quality improvements .................................67 Step 16 Encourage RIT members to implement Toyota-style work teams ......................................................................... 70 Step 17 Implement rapid improvement circles of employees (RICs) ...............................................................74 Step 18 Implement a permanent organizational structure for quality and cost improvement ............................................ 77 Step 19 Set a goal for each RIC member to produce one to four new suggestions per month ........................................77 Step 20 Have a clear reward and recognition program, and communicate negative consequences ................................79 Step 21 Adopt and teach continuous improvement to as many people as possible in the organization ...............................79 Step 22 The rapid improvement team quickly implements a 5S program ........................................................................ 80 Step 23 Identify unnecessary items using red tags ........................ 83 Step 24 Promote visual control throughout the workplace and organization ................................................................ 83 Step 25 Eliminate all forms of waste ............................................. 85 Step 26 Reduce specific examples of potential waste . . . ............. 103 Step 27 Sequence work and standardize it .....................................109 Step 28 Eliminate bottlenecks to improve continuous flow ................................................................. 110 Step 29 Document all important processes in the organization or department .....................................................................112 Step 30 Implement and maintain continuous improvement ......................................................................113 Step 31 Consider radical improvement where appropriate .......................................................................... 114 Step 32 Videotape each step of entire work processes . . . ............ 115 Step 33 Use flowcharts to improve core processes ........................116 Step 34 Use spaghetti diagrams to trace the path of a patient, employee, or product .......................................................... 117 Step 35 Measure process cycle times .............................................117 Step 36 Implement quick changeovers within a process . . ........... 118 Step 37 Complement nursing care delivery models with Lean ...........................................................................119 Step 38 Challenge and work with your extended network of suppliers and partners ........................................................120 Step 39 Automate processes to further improve quality and cost ..............................................................................122 Step 40 Learn from benchmark nonhealthcare organizations ..................................................................... 122 Step 41 Learn from other benchmark healthcare organizations ..................................................................... 127 Step 42 Learn from the institute for healthcare improvement ....................................................................... 129 Step 43 Hold on to the gains you've achieved ............................... 129 Step 44 Reduce administrative overhead costs .............................. 130 Step 45 Avoid insurance company overhead costs .......................... 131 Step 46 Take a total systems view of healthcare for lean improvement ..................................................................... 132 Chapter 4 A Capsule Summary of a Lean Toyota-like Production System for Healthcare .......................................................................135 Chapter 5 A Short To-Do List to Nationally Improve U.S. Healthcare Cost and Quality .................................................... 139 Appendix A Automaker Benchmarks ..................................................143 Appendix B Children's Hospital and Regional Medical Center Emergency Department Patient Flow--Rapid Process Improvement (RPI) ............................................................. 145 Appendix C 5-S Catches on at the VA Pittsburgh Health System .................................................................................... 151 Appendix D Error-free Pathology: Applying Lean Production Methods to Anatomic Pathology at the University of Pittsburgh Shadyside Hospital ............................................................................ 157 Appendix E Going Lean in Healthcare ................................................191 Appendix F Creating Lean Healthcare ................................................213 Appendix G Fixing Healthcare from the Inside, Today .....................229 Appendix H Lean and Healthy ............................................................. 257 Appendix I No Satisfaction at Toyota .................................................. 267 Notes ......................................................................................................... 279 Bibliography ............................................................................................ 285 Glossary of Lean Terms ...........................................................................289 Index ..........................................................................................................295