Prof.dr Vojislav Stoiljković
Lean Health Transformation and Covid 19 – English
The outbreak of the Covid 19 pandemic showed all the problems faced by health care around the world, from the insufficient readiness of health systems to the overload of both the system and the medical staff engaged in the care and treatment of patients. This is the moment when those responsible for health systems can and should accept the need to transform classical health systems into Lean systems in health care.
In order to reduce costs and improve health care, healthcare facilities and professionals can apply Lean principles and tools that speed up processes, reduce resources required, reduce preventable medical errors, improve patient care and safety, and reduce health care costs. A large number of healthcare facilities around the world have implemented, or are on track to implement, Lean operational principles and practices. By applying the Lean methodology in existing systems and procedures, large healthcare facilities achieve significant improvements in patient safety while reducing costs. For more than 20 years, healthcare organizations around the world have been implementing the Lean concept and thus implementing a transformation that allows more to be done with less.
Conferences in Europe and the world
In 2009, the HEALTHCARE VALUE NETWORK was created as a partnership between ThedaCare Center for Healthcare Value and the Lean Enterprise Institute (LEI) – two world leaders in Lean thinking. Together, the Center and LEI use their unique perspectives and 20 years of Lean experience to help network members substantially improve health care delivery. Healthcare Value Network brings together health leaders committed to providing high quality, cost-effective care through the application of Lean concepts.
Many healthcare institutions in Europe have been introducing Lean in healthcare for years. However, the first LEAN HEALTHCARE TRANSFORMATION CONFERENCE was officially held in Europe in 2014, from 23-24. April.
This conference is held every year, and the fifth 5th Annual Lean Healthcare Transformation Summit – Europe (London) was held in London in October 2019. This summit was designed to involve health leaders from across Europe to strengthen the Lean health community in the region, including hospital executives, Lean/continuous improvement leaders, physicians and chiefs, nurse leaders, advanced Lean professionals and those engaged in leading transformations. into their hospital or health care system.
The sixth 6th Lean Healthcare Transformation Summit Europe will be held in Lyon in December 2020. The announcement says that something will be for all “beginners” or “more advanced”. There will be special sessions for doctors, and before the summit, there will be a GEMBA walk at the Hospices Civils de Lyon (University Hospital Lyon) on December 9 in the afternoon.
Conferences dedicated to the Lean transformation of healthcare are held not only in Europe, but also around the world. Thus, the 10th Annual Lean Healthcare Transformation Summit was held in Washington, DC from 13-14. June 2019.
All of the above indicates that there is a lot of work being done around the world to transform healthcare by introducing the Lean concept. After all this information, it would be logical to expect to understand the importance of Lean healthcare transformation and to launch projects that would enable the transformation of the healthcare system into a Lean system so that MORE IS DONE WITH LESS.
Healthcare organizations around the world, and especially when pandemics like COVID 19 occur, are increasingly being asked to do more with less. This has often resulted in demands that medical staff simply work longer and longer. Lean methodology, originating from Japanese industrial organizations and especially from Toyota, offers an alternative – tried and tested approaches that work smarter. Lean, with his systemic approaches to reducing waste, has found his way to health organizations around the world, with promising results. One study report examples of successful implementation of the Lean concept in five Canadian hospitals. These are stories that speak to success, but also identify potential barriers and ways they can be overcome to provide better value for healthcare investments. 
Identification of wastes
The healthcare, public administration, and local self-government sector is at the beginning of a great period of transformation. The potential for savings is estimated at 50-75% compared to traditional processing, shorter cycles, steady flow, and faster decisions. Maintaining competitiveness requires constant improvement in productivity, “working more and more with less and less.” Proven production methods provide efficient solutions for the services sector, and that means for state administration and local self-government. Eliminating value-added steps and service elements while reducing response times to internal decisions and external requests dramatically improve efficiency levels.
Lean transformation begins by aligning value-creating activities, eliminating waste from the process of receiving requests to delivering services, and flowing through the system without interruption, thus improving transaction speeds of up to 400% while freeing up resources to further improve the value chain. In production, the customer receives the final product of the process, while in the service the customer himself becomes part of the process. That is why even more efforts are needed to adapt the service process to the needs of the people. Today, the services sector represents a huge opportunity to implement Lean to reduce operating costs, development time, transactions, approvals, and deliveries. Lean techniques applied in service processes reduce or eliminate waste, increase flexibility and thus allow them to adapt more quickly to customer needs and demand.
Identifying wastes is the task of recognizing 8 wastes in our daily work and applying Lean concepts that are effective in reducing or eliminating those wastes. Eight waste is not a means to solve the problems that caused waste in the first place, but it is an indispensable tool in solving inefficiencies and, as a result, also in reducing costs. This helps you identify and organize problems so that you can focus your efforts in the right areas. There are many other Lean tools and techniques that can be applied to address any of these wastes.
An example of health waste is shown in the figure 1 (Vojislav Stoiljković, Lean in Healthcare, Lambert, 2018.).
Figure 1 Completed workplace identification form for wastes
The world is in constant change. What was a competitive advantage until yesterday, is now becoming an obstacle to further progress? “The roadmap for innovation for the twenty-first century has changed. Today, it’s an idea in The Lean Startup that will help create the next industrial revolution,” says Steve Blank, lecturer, Stanford University, UC Berkeley Hass Business School. To this adds Noam Wasserman, a professor at Harvard Business School: “Lean Startup is the foundation for entrepreneurs and they have to read it. This provides ways to avoid making a product where mistakes are learned, rigorously assessing early signals from the market through validated learning, and deciding whether to persevere or change direction (Eric Ries, 2011) “.
Just as Lean Startup requires people to start measuring their productivity, it also needs to measure productivity in healthcare, public administration, and local government. The public sector, as well as existing or newly established companies, often accidentally do something that no one wants, no matter how much, if they do it on time and within budget. The goal of Lean Transformation is to design the right service or product to be done – the product/service that customers want and are willing to pay for – as quickly as possible. Health and public administration often introduce some procedures that only harass citizens and do not create any value for society. That is why a new way of looking at the public sector is needed and a request to innovate services that emphasize fast iterations between citizens and state bodies, i.e. a Lean transformation of the public sector as a whole is needed.
Lean programs have brought and still bring significant operational improvements in private sector organizations. However, governments and other state bodies have been slower to adopt such strategies. At a time when government budgets are under more pressure, Lean transformation can improve the efficiency of public services and help create more value for taxpayers’ money.
In the public sector, the introduction of Lean reforms is often considered difficult, as it faces challenges that are more complex in some respects than those in the private sector. But if Lean Transformation follows a thorough revision of strategy and operational models, the right step of change can be achieved, helping governments meet the growing demands and expectations of citizens while ensuring that scarce resources are allocated more efficiently.
Recently, the Lean approach has also been applied in the public sector, where it has achieved similar results for the benefit of users, employees and taxpayers. There are significant long-term and short-term pressures that make Lean a transformation of ideas whose time has come for governments and other state bodies (There is a well-known Chinese saying: “No army can stop the idea whose time has come”). One of the long-term factors is demographic change: an aging population will increase demand for various public services, while falling birth rates, as well as the departure of young professionals from the country, in many countries lead to weakening tax revenues and future labor shortages. Another long-term factor is the rising expectations of citizens, who now demand high-quality, public services that match the best services in the private sector – government services that “one size fits all” are no longer acceptable”.
In the short term, COVID 19 will lead to a financial crisis that will raise the level of public debt in many countries, further limiting the government’s ability to increase spending and meet the growing demand for public services. Even if governments want to spend more, they have less opportunity to do so, as globalization and demographic change continue to reduce national tax bases. The financial crisis has also added to public service demands, with government interventions to support economic recovery and regulatory strengthening. As new state administrations, agencies and programs are created, there is a possibility to adopt Lean principles, which can optimize their business.
The key to Lean optimization in the public sector is getting the right foundation. There are operational aspects, such as improving the process by finding and eliminating bottlenecks, which may be familiar to those involved in Lean projects in the private sector. In the public sector, however, there are two critical factors: 1) asking the right questions to formulate an appropriate strategy and creating an effective operational model, and 2) engaging employees to identify and implement the changes needed to create a culture of continuous quality improvement.
Lean projects in the public sector are often most successful if they start by examining the basic structure of the public service. Many will use old operating models that need to be replaced with models that put customer service first and eliminate duplication of effort. Organizational structures that separate different public services — for example, health care services in hospitals from services that support patients after treatment when they return to the community — may need to be changed to demolish existing silos. It is important to involve people from the organization in the development of new operational models because they have knowledge of what works in practice.
Today, the public sector lacks horizontal thinking in a vertically managed world with silos. This can change a Lean organization that understands customer value and focuses on its key processes to continuously improve them. The ultimate goal is to provide perfect value for the customer through a perfect value creation process that has zero waste. To achieve this, Lean thinking is needed that shifts the focus of management from optimizing separate technologies, assets, and vertical departments to optimizing the flow of products and services through the entire value stream that flows horizontally through technologies, assets, and departments, to customers.
Examples of Lean Health Transformation in the World
Saskatchewan has gone further than any other Canadian province in implementing a process to improve the health system using Lean. The man who has the greatest credit for launching Lean in the health system of the province of Saskatchewan in Canada is Dan Florizone. The initially planned result of Lean was to reduce spoilage, improve care performance, and improve quality. In the budgeting process for 2008-2009. year, the Saskatchewan Department of Health presented a document prepared as part of improvements at the Institute of Public Health to reduce wastage and improve performance (IHI 2005; Graban 2009). In its report, the Ministry states that its operating budgets in the targeted areas will be reduced from 1% to 3% by reducing waste, improving performance and quality of care.
The Saskatchewan Department of Health joined the Lean concept in November 2008, with the support of external consultants.
With the introduction of Lean in the Saskatchewan health system, stocks of drugs and medical supplies have dropped dramatically, i.e. one of the 8 major wastes has been removed.
Inventories are one of the biggest waste of processes. Let’s take the example of the procurement of respirators at the time of COVID 19. Out of fear that it would be insufficient, we went into the procurement of larger quantities than were the real needs. Had the Lean tool Kanban been applied this would certainly not have happened. Now the excess respirator will be somewhere in the warehouses. Had the Lean concept been implemented in health systems this would not have happened.
There are a number of other positive examples in the world where, by initiating the Lean transformation of healthcare, huge savings have been achieved while providing herbal health care. One of the positive examples is the Mayo Clinic.
The Mayo Clinic, Rochester, MN includes more than 2,400 physicians and scientists and 30,200 staff working at the clinic in Rochester and at clinics in Jacksonville, FL, and Scottsdale, Arizona. The Mayo Clinic treats more than 500,000 people each year – and they are looking for Lean ways to continuously improve.
The Mayo Clinic is trying to change the moment of care, by hiring a doctor all the time to provide the best care. They use Lean concepts to change 95% of the time if the patient is not in the doctor’s office if he does not see them or does not provide them with care … and that is 95%, where they have the opportunity to improve. The point at which doctors are willing to accept (Lean) is when they understand a concept that eliminates waste in their daily work.
Some of the results achieved by the Mayo Clinic back in 2007 are:
Mayo Medical Laboratories is committed to providing clients with quality laboratory testing that results in improved patient care and employee safety. One way to accomplish this is to implement the Lean management principle.
Lean principles can be applied to any organization that has a defined set of process steps that follow the production of the final product. Whether it is a physical good or a service, Lean has been successfully realized in industry, from manufacturing to healthcare. Lean is a systematic approach to process improvement that focuses on reducing and eliminating scattering, variation, and process imbalances.
Lean is a different way of observing and approaching work. It is about the development of change in process management and requires a reorganization of the process. This is done while carefully concentrating on eliminating excess movement, recognizing waste, and identifying what creates value from the patient’s perspective. Lean is an initiative for a continuous process of improvement, not an ultimate destination. It’s about allowing your process to flow continuously striving to improve the flow.
The main goal of Lean, when applied in the laboratory, is to provide quality laboratory results to the patient, at the lowest cost, in the shortest possible time and at the same time to maintain patient satisfaction.
Within the Mayo Medical Laboratory, when indicating a Lean project, attention is usually focused on eliminating wastage. The first step is to perform a “Gemba walk through scattering” which involves directly observing the process as it is realized in the laboratory. This direct participation in the activity is required so that participants can be able to see and identify spoilage in the process. This direct observation of this process is a simple part. The challenge is to have the courage to identify and declare waste and to show a desire to eliminate it.
Another example is ThredaCare. ThedaCare is a community health system in the state of Wisconsin consisting of five hospitals, ThedaCare Physicians, ThedaCare Behavioral Health, ThedaCare At Work & ThedaCare At Home. There are over 20 clinics.
Since ThedaCare began the Lean Journey more than a decade ago, the Appleton healthcare system, led by Dr. Dean Gruner, has made healthcare more efficient, while at the same time meeting the needs of patients and providing the best quality of care. Overall, ThedaCare saved about $ 20 million in those early years by applying Lean practice.
In 2002, during a visit to Ariens Co., ThedaCare CEO Dr. John Toussaint had an idea: to undertake Lean production techniques to make its facilities near Brillion, Vis more productive and apply it in healthcare to customer needs by increasing the availability of high-quality care.
Using Lean techniques, ThedaCare looks at every part of the patient’s experience from the call to the emergency department visit. Thus, they shortened waiting times, improved patient care, creating patient satisfaction at a lower cost.
Since the beginning of the implementation of the Lean concept, ThedaCare, a public health system in the northeastern state of Wisconsin, has been striving to create a health care market that rewards value service providers. ThedaCare uses the Lean Improvement Method to build a framework in which healthcare leaders and staff become the ones to solve everyday problems. ThedaCare has exponentially reduced errors, improved patient outcomes, eliminated wastage, and reduced tens of millions of costs without layoffs. This first-hand experience drives the ThedaCare Center to share these facts with other hospitals and health care providers.
In 2010 alone, two hospitals in ThedaCare saw 88% improvements in safety and quality, 85% improvements in customer satisfaction, 83% improvements in staff engagement, and 50% financial improvement indicators. In particular, ThedaCare has achieved zero errors in drug settlement for four consecutive years and reduced readmission rates to less than 12%. Seattle Children’s Hospital, affiliated with ThedaCare, reduced total patient costs by 3.7% and supply costs by $ 2.5 million. Evidence like these shows that Lean thinking can improve health care parameters and quality.
Denver Health Medical Center is another healthcare organization in America that has been implementing the Lean concept for years. This healthcare organization has achieved impressive results with the introduction of the Lean concept. In 2005, Denver Health began embracing the Toyota Production System and its Lean principles. The goal was to identify spoilage and improve efficiency. The Denver Hospital Safety Network, with 525 licensed beds, was ready to undergo a cultural change that would allow it to remain financially stable and continue to provide high-quality care to patients despite uncompensated care and declining compensation. Since then, Denver Health has experienced unparalleled success by integrating the Lean philosophy into its culture:
- Denver Health is the first healthcare organization in the world to be awarded the Shingo Bronze Plaque for Operational Excellence.
- Denver Health has involved more than 2,000 of its employees in Lean Improvements.
The success of Denver Health is best illustrated by the words of Dr. Donald M. Berwick, MD at the introductory presentation at the 23rd Annual IHI National Forum on Improving Health Care Quality on December 7, 2011, in Orlando, Florida: “If in doubt we know what we need to work, visit Denver Health or ThedaCare or Virginia Mason and see the learned Toyota principles of Lean manufacturing, mastered, adapted and deployed across the system in the skills and behavior of the entire workforce. The result is over $ 100 million in savings at Denver Health, with significant improvement experiences and outcomes for patients.”
Many colleges in America and the world have long had subjects that deal with the Lean concept in healthcare. There are 82,500,000 pages on the Internet dedicated to the topic of Lean Education. This is another confirmation of how important it is to carry out the Lean transformation of health, education and the public sector, in order to WORK MORE with LESS.
Lean transformation process
The European Union plans to invest more than 100 billion euros in projects to improve products and services based on green and Lean principles by 2020. Why is Europe doing this? Because it follows the positive experience of other regions in the world, and above all America and Japan.
The European Union has also set Lean, green, and clean production among its most important goals in its strategy for the development of products and services until 2020. Improvement projects are based on green and Lean principles and should reduce the required human labor, space, lead time, information, and capital. There is a synergy between Lean and green production. The application of the Lean concept reduces the consumption of resources, both basic material and additional resources such as electricity, water, lubricants … and thus leads to a reduction of the harmful impact of the process on the environment (Sam Windsor, 2010).
Countries around the world have been implementing the Lean transformation for many years. Why are they doing this? The answer is very clear: “In order to reduce or eliminate waste from the process and thus reduce the budget deficit and provide more funds to encourage investment and development. “
What should and can be done in these circumstances and reverse the falling curve into a growth curve. The first task is to initiate a CHANGE OF EXISTING CULTURE into LEAN CULTURE. This is easy to say, but the hardest to accomplish. However, every journey of 10,000 miles, as they say in China, begins with the first steps in the right direction. So, first and foremost, be effective. That means choosing and doing the right thing. Elsewhere is to be efficient. That means doing the right thing with the least effort, using the least resources, without mistakes, and in the shortest time. Is this possible? The answer is YES. It is possible to be effective, but at the same time effective.
Lean actually requires a new way of thinking – Lean thinking. That change does not happen overnight, because the culture is what makes a nation. In healthcare, but also in other areas, it has been the case for years that “no one can pay me as little as I can work.” In addition, the existing culture is blind to waste being thrown in all directions, polluted environment, untidy space in which we live, waste of energy at every turn, unnecessary waste of existing resources and their poor use and much more.
Culture is one of the factors that influences the way of thinking, as well as the behavior of health institutions, state administrations and local self-governments, but also public and private organizations. In addition to culture, organizations are influenced by two other important factors: political and technical. This means that in organizations there are usually, in addition to the technical system, the following two systems: one that reflects the authority to make decisions (called “political” system) and the other that reflects the collective values and beliefs of people in organizations (called “cultural” system). Both of these systems can interfere with process improvement. Specific disruptions must be identified and eliminated so that these two systems (political and cultural) together become a basis for improving the process by implementing Lean transformation.
The question here is: Which of the three systems that affect the organization should be transformed first? The answer is a technical system. Why a technical system? Because the technical system consists of processes implemented by one organization, whether it is an organization in health care, state administration and local self-government, a public company, or a private company. A change in the process, especially if it is expected that the change will bring benefits to the participants in the process, but also to those who are served by the process, is gladly accepted by employees, especially if they are part of a team working to improve the process.
Political and cultural factors are far more difficult to assess and their transformation requires a different methodology and time. Disruption of the political system of the organization, at the beginning of the Lean transformation process, is actually the entrance to the aspen. In the political system of an organization, there is an established relationship of power and power, which is usually not drawn from the added value that individuals provide to the organization, but from the support they have from political parties, influential individuals, or the lobby behind those individuals. Therefore, an attempt to disrupt the established political system in the organization can lead to tectonic earthquakes, which can bring more harm than good to the organization.
When an organization initiates a change in the technical system, ie the improvement of the process it implements, individuals who had political power in the organization begin to lose that power due to the simplification of the process and the documentation of standard work. Thus, it is no longer necessary for someone who has political power in the organization to ask whether something should or should not be done and in what way. This means that in parallel with the change of the technical system through the Lean transformation, in fact in the background, there is also a change in the political system of the organization. Ultimately, this leads to the cultural transformation of the organization and the creation of a Lean culture – a culture that does not tolerate waste and allows more to be done with less.
There is no time to wait. Many opportunities to initiate positive change have been missed, all in the expectation that the existing way of working will bring some visible improvements. The famous saying of Dr. Deming, an American who is responsible for the Japanese economic miracle, was probably not heard: “If you work as you have done so far, you will get what you have got so far”.
What is Lean transformation?
Lean transformation is the holistic application and maintenance of Lean principles, strategies, and methodologies for every process and system within an organization. Lean principles are based on highly developed techniques to reduce waste and respect the people working in the process. These principles have been successful and effective in every industry in which they have been applied.
Lean transformation involves improving the way value is delivered to the customer. It also entails the elimination of activities that do not add value and the reduction of time for performing operations that add value to the business. In order to achieve that, it is necessary to discover activities that do not add value and take immediate action to eliminate them. This means that people need to learn to see waste. The first step in Lean transformation is for people to see waste and become aware that these are unnecessary losses for everyone.
At the heart of the Lean concept is a people-based system. The success of any Lean transformation depends on the engagement of each employee in the process of continuous business improvement. All employees must be ready and able to solve all the complex problems. Those in senior positions, who make decisions that affect everyone, are the most responsible and they have the power and authority to drive change.
All employees should receive training in the Lean concept and Lean tools. Also, employees need to learn new ways of thinking and behaving that support the development of Lean culture, or a culture of continuous improvement. Employees should learn the PDCA (Plan – Plan, Do-Do, CHECK – Check, ACT – Act) cycle, introduced by Dr. Deming in the 1950s , as a discipline that holds all organizational processes together and improves them on an ongoing basis.
The transformation from traditional management to Lean management requires:
- Capacity building for Lean transformation.
- Strategic alignment of Lean efforts and resources within and between organizations: Align efforts to improve health, state, and local governments with vision and strategy.
- Nurturing Cultural Change to Support Lean Transformation.
- Adapt Lean thinking, tools, and techniques for operations in health care, public administration, and local government.
- Increasing Communication to Support Lean Accountability, Transparency, and Cultural Change: Contributing to How Health, Public Administration and Local Government Use Lean to Deliver Value.
Lean transformation, observed globally, goes through three phases (Table 1):
- In the first phase, the goal is defined to eliminate waste from the department, which is achieved through the realization of the Kaizen event.
- The second phase is more systematic. Large Lean programs are defined and implemented. The goal is to create a system to continuously eliminate spoilage and create a Lean culture.
- In the third phase, DNA shifts occur. The transformation of the organization is achieved and thus its survival is ensured. This phase is characterized by discipline, is stable and focused in the long run.
Table 1 Transformation phases
||Eliminate waste from the department
||Creating a system to eliminate wastes systematically
||Great program and projects
||The whole organization
||Connecting tools and creating an Intranet
||Customer-focused, systematic waste eliminate
||Lots of activities, the participation of people working in the process
||Booting the system, including some unproductive functions, awareness throughout the organization
||It helps organizations achieve goals, solve problems, engage all levels
||Only Kaizen, there is no systematic search for the root cause of wastes, there is no system
||Bureaucracy has no “fun”, slow, middle management stuck
||Disciplined, demanding, stable, long-term experience
In Nišu, 26.05.2020. Prof.dr Vojislav Stoiljković
 Vojislav Stoiljković, Lean transformacija Srbije, Talija, 2918.
 Vojislav Stoiljković, Lean u zdravstvu, Despot book, 2013.
 Vojislav Stoiljković, Lean in Healthcare, Lambert, 2018.
 Vojislav Stoiljković, Lean transformacija Srbije, Talija, 2018.
 Health Reform Observer – Observatoire des Réformes de Santé, Vol. 1 , Iss. 1, Art. 1
 Vojislav Stoiljković, Lean transformacija Srbije, Talija, 2918.