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Lean Transformation
Better, Faster and More Affordable
Robert S. Mecklenburg, MD Center for Health Care Solutions
At Virginia Mason
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© 2012 Virginia Mason Medical Center
Virginia Mason Medical Center A Study in Transformation
1. Sea ttle -bas ed in tegra ted s ys tem 2. 450 employed phys ic ians 3. 800,000 outpa tien t vis its ;
17,000 hos pita l vis its 4. Graduate medica l educa tion 5. Res earch Center
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Virg in ia Ma son Me d ica l Ce n t e r Hos p it a l o f De ca d e : Efficie n cy a n d Effe ct ive n e s s
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Th e Firs t Boa rd Me e t in g
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Two Circles and a Choice
Influence
Concern
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© 2012 Virginia Mason Medical Center
Circle of Concern For Our Organization
1. Recession and job losses 2. Reduced funding of health care benefits 3. Downward pressure on Medicare payment 4. Dysfunctional national politics 5. Fragmented health care delivery system 6. Aging, overweight population 7. Regulatory uncertainty
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Circle of Influence for VM Remove Waste From Health Care Delivery
1. Produce appropriate, quality health care 2. Eliminate needless variation 3. Eliminate waits and delays 4. Reduce cost of producing health care
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A Decade of Change The Inside Story
1. Organiza tiona l Compac t to ens ure accountability
2. S tra teg ic p lan to de fine ours e lves and our dec is ion ru les
3. Re liab le s ys tems to reduce varia tion in ca re
4. Marke tp lace Collabora tives to redes ign ca re with cus tomers
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1 . Ph ys icia n Com p a ct Mu t u a l Accou n t a b ilit y
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2 . St ra t e g ic Pla n Wh o w e a re . Wh a t w e d o .
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3. The Path Toward a Management System that Works
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New Attitudes and New Tools
VM Board Member at Hitachi
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The Sensei and
The Waiting Room
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Re lia b le Sys t e m s Elim in a t in g Wa s t e d Tim e a n d Con t e n t
Standardize processes
Build in pace Only what is needed when and where needed
LESS WASTE
LOWER COST
BETTER - FASTER - MORE AFFORDABLE
Build in quality
Evidence-based, patient centered care
Cost of care Cost of absences
Cost of variation
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Reliable Systems “Best Doctors” Not Sufficient
Safe Medication Ordering
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan-0
5
Feb-05
Mar-05
Apr-05
May-05
Jun-0
5Ju
l-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Percent Defec ts in Med Orders a t VMH
Reliable System Installed
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Th e Me d ica l As s is t a n t ’s Qu e s t ion
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Re lia b le Sys t e m s I n flu e n za I m m u n iza t ion Ra t e s a t VM
38.0%
54.0%
29.5%
97.6% 99.6%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2002 2003 2004 2005 2006 2007 2008 2010 2011
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A Decade of Change at VM The Outside Story
1. Phys ic ian compac t and reorganiza tion to ens ure accountability
2. S tra teg ic p lan to de fine ours e lves and our dec is ion ru les
3. Re liab le s ys tems to reduce varia tion in ca re
4. Marke tp lace Collabora tives to redes ign ca re with cus tomers
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© 2012 Virginia Mason Medical Center
Th e Cu s t om e r
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Affordability: Three Challenges 1. Failed process for delivering quality
2. Failed process for paying for quality
3. Failed process for purchasing quality
Affordability requires correcting all three.
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A Ma rke t p la ce Co lla b o ra t ive 1. Employer uses purchasing power to define products and quality specifications.
2. Provider produces product to quality specs.
3. Health plan pays for delivery of quality specs.
4. Employer purchases product.
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Customer Defines Products Doing the Right Thing: High Cost Conditions
1. Screening and prevention 2. Back pa in 3. Shoulder, knee and h ip pa in 4. Headache 5. Res pira tory s ymptoms 6. Breas t s ymptoms 7. Depres s ion/anxie ty 8. Diabe tes 9. Abdomina l pa in 10. Ches t pa in
High volume, low per-capita cost conditions
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Customer Defines Quality Specs Doing Things Right
Better 1. Evidence-based care: what works 2. 100% patient satisfaction Faster
3. Same-day access 4. Rapid return to function More Affordable
5. Affordable price for employer and provider
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Customer on Design Team
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Redesigning Health Care Tools to Create Reliable Systems
1. Va lue-s tream mapping Care from the cus tomer’s pers pec tive
2. Evidence-bas ed medic ine Care tha t works
3. Skill-ta s k a lignment The righ t provider for the c lin ica l tas k
4. Lead time reduc tion No waits or de lays
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© 2012 Virginia Mason Medical Center
1 .Va lu e St re a m Ma p o f Ba ck Pa in
TIME
Waits and delays
Non value-added
Evidence-based value
PCP PCP MRI PCP Neuro 15 PT visits Rehab
Be fore Sys t e m s Re -e n g in e e r in g
Aft e r Sys t e m s Re -e n g in e e r in g
Sp in e Clin ic 2 .8 PT vis it s
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2 . Evid e n ce -Ba se d Me d icin e Ju s t Wh a t Works
Doing just what works can reduce health care costs by 30%.
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Bu ild in g Qu a lit y I n t o t h e Sys t e m Mis t a ke -Proofin g
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A Reliable System Bringing Out Best Individual Performance
Headache: -23% Low back pain: -23% Sinusitis: -27%
Mistake-proofing Implemented
Reduction in imaging
J Am Coll Radiol 2011;8: 19-25.
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3. Skill-Task Alignment Right Provider for the Task
1. 65% of cost of production at VM is labor 2. Labor cost and skill/task alignment
a. Proceduralist MD $4/minute b. Non-proceduralist MD $2/minute c. Nurse practitioner $1/minute
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4. Lead Time Reduction The Cost of Waits and Delays
Example: VM as an employer
15% of FTEs are nurses
Daily replacement cost of a nurse $400
Cost of 3-day wait for appointment $1200
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Bre a s t Clin ic Th e Va lu e o f Tim e
Evaluation complete in hours for 90% of patients.
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He a d a ch e Clin ic Th e Va lu e o f Tim e
3
6
3
2
3
2
Q1 Q2 Q3
Day
s
Self-reported loss of productive time: 115 patients
New Patients
Return Patients
Q1: How many days in the last month did you miss work or school because of your headaches? Q2: How many days in the last month was your productivity at work or school reduced by half or more because of your headaches? Q3: How many days in the last month did you miss family, social, or leisure activities because of your headaches?
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A Cost Reduction Model
1. Pa tien ts a. 50% less work loss b. Better functional improvement c. Satisfaction: would you recommend? 4.9/5.0
2. Employers and o ther purchas ers a. 23% less imaging b. 50% less Physical Therapy c. 50% less absenteeism
3. Hea lth p lans : s avings for c lien ts
Sp ine Clin ic
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A More Complex Challenge “Boeing Project”
A cha llenge to VM and two o ther provider groups : 1. Improve hea lth s ta tus of mos t cos tly pa tien ts 2. Decreas e per capita s pend for cos tly pa tien ts by 15%
Low volume, high per capita cost patients
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A Multidisciplinary Team Intensive Primary Care
a. Providers: team with skill/task alignment
b. Process: evidence-based, immediate, individualized, anticipatory, coordinated care
MD
Patient RN
PHARM
MA
AHP
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Ch a n g e in Dire ct Cos t s Ag g re g a t e Dire ct Cos t s De cre a s e d 3 3 %
12% 15%
-35% -38%
-55%
-84%
-100%
-75%
-50%
-25%
0%
25%
Prescriptions Office visits Radiology Out-patient services
Admissions Hospital days
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I m p rove d Prod u ct ivit y Re d u ce d Work Los s
Abs entee is m 57% Phys ica l and menta l func tion 15%
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Th e La s t Boa rd Me e t in g
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The Business Case for Quality Spine Clinic
Efficient Spine Clinic
1. Lower cost FTE Area, ft2
29% 78%
2. Greater revenue RVU/MD/day New patients /yr
76% 64%
3. Greater margin/year Estimated from VM BSR & direct costs 56%
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Th e Bu s in e s s Ca se fo r Qu a lit y VMMC Ne t Ma rg in $
(Mill
ions
)
0.7 3.2
12
18.4
28
47.6
40.9
0 5
10 15 20 25 30 35 40 45 50
2000 2005 2006 2007 2008 2009 2010
Shared Success Program
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Th e Bu s in e s s Ca s e fo r Qu a lit y VM Profe s s ion a l Lia b ilit y Pre m iu m s
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Sca la b ilit y a n d Tra n sp ort a b ilit y I n t e l’s He a lt h ca re Ma rke t p la ce Co lla b ora t ive
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Quality… is not what the supplier puts in.
It is what the customer gets out. -Peter Drucker