1 - kaplan - transforming healthcare

11/10/2017

©AllinaHealthSystems 1

Creating Value in a Time of Uncertainty

Creating Value in a Time of Uncertainty

Gary S. Kaplan, MD

Allina Health

November 10, 2017

Gary S. Kaplan, MD

Allina Health

November 10, 2017 © 2014 Virginia Mason Medical Center

DisclosureDisclosure

I have no conflicts of interest or relevant financial interests to disclose.

“If you are dreaming about it…you can do it.”

Sensei Chihiro Nakao

© 2014 Virginia Mason Medical Center

Virginia MasonVirginia Mason

• Integrated health care system

• Became two hospital system

in January 2016, with

Yakima Memorial affiliation

• 501(c)3 not-for-profit

• 336-bed hospital

• Nine locations

• Graduate Medical Education

• Research Institute

• Foundation

• Virginia Mason Institute


The Challenge of HealthcareThe Challenge of Healthcare

• Poor Quality………………………..3% defect rate

• Impact on individuals………….100% defect

• Cost of poor quality…………….Billions of dollars

• Cost of healthcare tothose who pay……………………..Unaffordable

• Access………………………………….Millions

• Morale of workers………………..Unreliable systems


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Urgency for Change at VMMCUrgency for Change at VMMC

“We change or we die.”

— Gary Kaplan, VMMC Professional Staff Meeting, October 2000


An Embarrassingly Poor ProductAn Embarrassingly Poor Product

The March 16, 2003 edition of The New York Times

Magazine front cover reads, “Half of what doctors know

is wrong.”

The lead story is titled “The Biggest Mistake of Their

Lives” and chronicles four survivors of medical errors.

The article goes on to say that in 2003, as many as

98,000 people in the United States will die as a result of

medical errors.


Investigators: Medical mistake kills Everett woman

Hospital error caused death

November 23, 2004 –Virginia Mason Medical CenterNovember 23, 2004 –Virginia Mason Medical Center


• Autonomy

• Protection

• Entitlement

• Improve safety/quality

• Implement EHR

• Create service experience

• Be patient-focused

• Improve access

• Improve efficiency

• Recruit/retain quality staff

Traditional “Promise”Legacy Expectations Imperatives

Clash of “Promise” and ImperativesClash of “Promise” and Imperatives


Aligned ExpectationsAligned ExpectationsPhysician Compact

Leader Compact Board Compact


The VMMC Quality EquationThe VMMC Quality Equation

Q: QualityA: AppropriatenessO: OutcomesS: Service W: Waste

Q = A × (O + S) W

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Taiichi OhnoTaiichi Ohno

“You should submit wisdom to the company.

If you don’t have any wisdom to contribute, submit sweat.

If nothing else, work hard and don’t sleep.

Or resign.”


Think DifferentThink Different

• ½ the human effort

• ½ the space

• ½ the equipment

• ½ the inventory

• ½ the investment

• ½ the engineering hours

• ½ the new product development time


Seeing with our EyesJapan 2002Seeing with our EyesJapan 2002


Hitachi Air ConditioningHitachi Air ConditioningTeam Leader Kaplan reviewing the flow of the process with

Drs. Jacobs and Glenn


What we learned

How are air conditioners, cars, looms and airplanes like health care?

• Every manufacturing element is a production processes

• Health care is a combination of complex production processes: admitting a patient, having a clinic visit, going to surgery or a procedure and sending out a bill

• These products involve thousands of processes—many of them very complex

• All of these products involve the concepts of quality, safety, customer satisfaction, staff satisfaction and cost effectiveness

• These products, if they fail, can cause fatality


Visual Control for SafetyVisual Control for Safety

5S Anesthesia Shadow Board - Before

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5S Anesthesia Shadow Board - After

Visual Control for SafetyVisual Control for Safety


Central Line Insertion Standard Work

Dry:

30 sec scrub 30 sec dry

Wet:

2 min scrub 1 min dry

Before

Maximum Barrier

Protection

Thyroid Angio Drapes

Transducer Kit in Top Drawer of

Cart

Transducer Method Manometer Method

During

After

“ Approved to use ”Date/Initial

Complete Paperwork

Yellow – top of cart White – in chart progress notes

OR

OR

Paws

AND

Standard Work Decreases VariabilityStandard Work Decreases Variability

Stopping the Line ™

Virginia Mason’s Patient

Safety Alert System ™


Stopping the lineStopping the line


Patient Safety Alert Process ™Patient Safety Alert Process ™

Created August 2002

• Leadership from the top

• “Drop and run” commitment

• 24/7 policy, procedure, staffing

• Legal and reporting safeguards


Cumulative Patient Safety Alerts (PSAs)Cumulative Patient Safety Alerts (PSAs)

1,000

10,000

25,000

50,000

75,000

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

0

10000

20000

30000

40000

50000

60000

70000

80000

July 2005 March 2008 Jan. 2012 Sept. 2014 Apr. 2017

75,061 PSAs as of April 10, 2017

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“Good Catch!” Safety Award“Good Catch!” Safety Award


(Excludes claims closed without payment.)

2697

3500

30792726

2954

4322

5386

6196

9277

10082

79

67 66

86

60

70

78

23

1916

0

10

20

30

40

50

60

70

80

90

100

0

2000

4000

6000

8000

10000

12000

'04‐'05 '05‐'06 '06‐'07 '07‐'08 '08‐'09 '09‐'10 '10‐'11 '11‐12 '12‐13 '13‐14

PSAs Reported Reported Claims

Effectiveness of Safety ProgramEffectiveness of Safety Program


Reduction of Hospital Professional/General Liability Premiums

Reduction of Hospital Professional/General Liability Premiums

'04-'05 '05-'06 '06-'07 '07-'08 '08-'09 '09-'10 '10-'11 '11-12 '12-'13 13-'14 14-15 15-16

9%

% change from previous year, with 75% overall reduction in premium since 2004-05

7%

12%5%

26%

12%12%

11%

12%

30% 2 yr. rate

Expecting at 10% Decrease in this next year


“Nursing Cells” – Results > 90 days

Before After• RN # of steps = 5,818• PCT # of steps = 2,664• Time to the complete am cycle of work = 240’• Patients dissatisfaction = 21%• RN time spent in indirect care = 68%• PCT time spent in indirect care = 30%• Call light on from 7a-11a = 5.5%• Time spent gathering supplies = 20’

8461256

126’0%

10%16%0%

11’

RN time available for patient care = 90%!


VMPS Method: One Piece FlowFlow StationsVMPS Method: One Piece FlowFlow Stations


VMPS Method: Mistake ProofingThe Health Maintenance ModuleVMPS Method: Mistake ProofingThe Health Maintenance Module

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Build To Order ResultsBuild To Order Results

EVENT OLD NEW

Craniotomy

SPD Set Up = 34:00 min SPD Set Up = 18:27 min

OR Set Up = 24:09 min OR Set Up = 2:34 min

Laminectomy

SPD Set Up = 34:00 min SPD Set Up = 20:15 min

OR Set Up = 24:09 min OR Set Up = 2:29 min

Minor SetOR Set Up = 19:21 min OR Set Up = 0:20 sec


Improved Surgical TimeoutImproved Surgical Timeout


World-Class ManagementWorld-Class Management

The World-Class Management System is a leadership system that provides focus, direction, alignment, and a

method of management for daily work

This Or This


AlignmentAlignment


Tuesday “Stand Up”Tuesday “Stand Up”• KPO aligned with

operational executive leadership

• Executive sponsorship with accountability for sustained results

• Education

• Standardization of tools, results reporting, and communication


Daily Management: Leaders Have Two Jobs

1. Run your business

2. Improve your business

World-Class ManagementWorld-Class Management

Daily Management

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VMPS EducationVMPS Education

Intro to VMPS

VMPSGeneral Education

VMPS Leadership Training

VMPS Certification

VMPS Fellowship

This will be a big shift for some managers (i.e. being a coach

and not the key problem-solver and rescuer!)

• Support staff in working on their ideas, but don’t do it for them

• Encourage root cause thinking

• Be straightforward with feedback

• Ask lots of questions to draw out creativity and critical thinking

Leaders Need to Be Idea Coaches


Effective SponsorshipEffective Sponsorship

• Vision of success

• Set stretch goals

• Provide resources

• Remove barriers

• “Fail forward fast”

• Celebrate achievements


Genchi GenbutsuGenchi Genbutsu

• “It’s all lies”

• Go where the action is

• Know your people and let them know you

• Vulnerability is ok

• Connect the dots


Holding the GainsHolding the Gains

• It takes hearts and minds

• Great people and great systems

• The gift of time is a treasure

• Accountability and audit


Our VMPS Journey Continues!Our VMPS Journey Continues!

20022003

20042005

20062007

20082009

20102011

2012

2013

2014

2015

− Implemented Strategic Plan with Patient at the top

− Declared VMPS as our management method

− Executives to Japan− Implemented PSA

system− 49 RPIWs, 3 3Ps

− Executives & KPO first to be VMPS Certified

− 7 KPO Staff Members

− Mrs. McClinton

− All Execs & Admin Directors Certified

− 110 RPIWs, 4 3Ps

− Kaizen Fellowship program

− KPO rotational leader position created

− 24 KPO staff members

− One organizational goal of Quality

− KPO Goals instituted

− Tuesday Standup begins

− HealthGradesDistinguished hospital award

− Integrated VMPS efforts with supplier partners

− VMPS training for managers

− 44 RPIWs, 1 3P, 51 Kaizen Events

− Defined standards for a Model Line

− Improved VMPS curriculum for all supervisors and above


− Virginia Mason Institute formed

− Large integrated value streams

− 3P Certification− VMPS for Leaders

prerequisite for Certification


− Super-flow RPIWs

− Study & apply Toyota Talent (TWI) training methods

− 66 RPIWs, 6 3Ps, 119 Kaizen Events

− Top Hospital of the Decade

− World Class Management system

− Standard Work for Leaders

− Experience Based Design training

− 82 RPIWs, 8 3Ps, 238 Kaizen Events


− Respect for People Training

− Continuing education for VMPS Certified leaders

− Innovation Events

− Patients as partners with our improvements

− VMPS for Leaders training becomes “fit for duty” requirement of all admin and physician leaders

− One KPO− 22 KPO staff

members− First daily

management assessment org-wide

− Introduced daily kaizen

− VMPS Priorities focused on improving the patient, family and staff member experience

2016

11/10/2017


© 2017 Virginia Mason Institute

• Coverage

• Cost pressures

• Staff burnout

• Access

• Government mandates

• Frequent leadership changes

Current Landscape: Rapid ChangeCurrent Landscape: Rapid Change

43CALNOC Conference 2017 © 2014 Virginia Mason Medical Center

Next Era of Health Care ReformNext Era of Health Care Reform

Four Key Principles Guiding GOP Reform Efforts

Promote Transparency of Cost and Quality

Reduce Federal Entitlement Spending

Embrace Free Markets and Consumer Choice

Use free markets to promote private sector competition in payer, provider markets

Focus more aggressively on reducing federal health care spending

Mandate greater consumer choice and shopping at the point-of-care and point-of-coverage through improved transparency

Reduce federal role in health care; provide states more autonomy to make decisions, cut spending

Devolve Health Policy Control to States1 2

3 4

Source: Health Care Advisory Board interviews and analysis.

CALNOC Conference 2017


What’s Happening Today

CALNOC Conference 2017 © 2014 Virginia Mason Medical Center

The Path Forward

CALNOC Conference 2017


Quality Standard Set by PurchasersQuality Standard Set by Purchasers

Aligning Providers with Customers

1. Evidence based care

2. 100% patient satisfaction

3. Same-day access

4. Rapid return to function

5. Affordable price for buyer and seller


Overview: Virginia Mason’s Centers of Excellence and Bundled CareOverview: Virginia Mason’s Centers of Excellence and Bundled Care

• Launched 1st bundled care contract in 2013 with Walmart

• Focus on clinical appropriateness

• Controlled and predictable costs (remove variability)

• Improve outcomes, patient satisfaction

Today:• Many Employers: Walmart, Lowes, McKesson, Jet Blue, etc.

• Bundles include: Cardiac surgery, orthopedic, spine (including complex), bariatric, gynecology and general surgery.

• Third Party Administrators: (EdisonHealth, Employer Direct, Health Design Plus)

• Care for patients from across the United States

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What are we Selling in a Bundle?What are we Selling in a Bundle?

Appropriateness—avoidance of inappropriate surgeries

High Quality, Reliable Care

Predictable Price

Exceptional Patient Experience

This is not about rock-bottom pricing only


Ready: AppropriatenessReady: Appropriateness

Appropriateness Criteria

BMI<40, A1c<8, circulation, nutrition, liver fxn, smoking cessation, control of opioid dependency, absence of dementia…


Recognize: Patient Satisfaction/Rapid Return to Function – Hip & Knee ReplacementRecognize: Patient Satisfaction/Rapid Return to Function – Hip & Knee Replacement

56%27%

9%4%4%

HighlyLikely

Likely

Not sure

Likelihood to refer friend or family member to Virginia Mason Orthopedics (2014)

Aggregate Mean Improvement Scores with Hip & Knee Replacement Surgery


Local Market –Health Care Authority ContractLocal Market –Health Care Authority Contract

Health Care Authority TKR/THR Bundle :

(Effective Date 1/1/2017)

• Selling appropriateness

• Warranty is part of the product

• Site visit by selection team

• 240,000 lives

Virginia Mason is the only organization that was selected for this contract


Making it RealMaking it Real

We were told that a major reason why we were the only organization to be selected is because the evaluators could see our processes of care and how we are delivering on our commitments on a daily basis. They said it was clear to them that it was real.


Lessons Learned To DateLessons Learned To Date

• This is a care model—not just a payment model

• Our work in many parts of our business have come together over time to make this program successful

• Data is needed for the quality work we are doing

• Many patients do not require surgery – managing patient expectations can be challenging

• Growing interest in COEs from employers, TPAs and insurers

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Respect for People refers to how we treateach other as we work together to create the

perfect patient experience.


Respect for PeopleRespect for People

Listen to understand

Keep your promises

Be encouraging

Connect with others

Express gratitude

Speak up

Walk in their shoes

Grow and develop

Be a team player

Share information


Flu Vaccination “Fitness for Duty”Flu Vaccination “Fitness for Duty”

Do we put patient first?

Compelling science

Staff resistance

Staying the course

Organizational Pride


VMMC Influenza Vaccination RatesVMMC Influenza Vaccination Rates

38.0%

54.0%

29.5%

97.6%

98.5%98.7%

98.9%

98.9%

99.8%99.7%

99.7%99.8%

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 2009 2010 2011 2012 2013


Requirements for TransformationRequirements for Transformation

Sense of Urgency

Visible & Committed Leadership

AlignedExpectations

Improvement Method

Technical & Human

Dimensions of Change

Shared Vision


Ongoing Challenges - CultureOngoing Challenges - Culture

• Patient First

• Belief in Zero Defects

• Professional Autonomy

• “Buy In”

• “People are Not Cars”

• Pace of Change

• Victimization

• Leadership Constancy

• Rigor, Alignment, Execution

• Drive for Results

11/10/2017


From

• Provider First

• Waiting is Good

• Errors are to be Expected

• Diffuse Accountability

• Add Resources

• Reduce Cost

• Retrospective Quality Assurance

• Management Oversight

• We Have Time

To

• Patient First

• Waiting is Bad

• Defect-free Medicine

• Rigorous Accountability

• No New Resources

• Reduce Waste

• Real-time Quality Assurance

• Management On Site

• We Have No Time

Transforming Healthcare

“In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.”

- Eric Hoffer

1 - kaplan - transforming healthcare

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