Managing and Evaluating Rapid-Cycle Process Improvements as Vehicles for Hospital System Redesign
Final Contract Report
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.