In February 2001, the Robert Wood Johnson Foundation issued an unusual invitation to America's healthcare organizations: Push quality improvement to a new level by creating models of excellence at a select number of organizations, each involving a redesign of all major care processes.
The initiative, called Pursuing Perfection, was the joint brainchild of the RWJF and the not-for-profit Institute for Healthcare Improvement. The RWJF would fund Pursuing Perfection to the tune of $21 million over 21/2 years, and the IHI would provide direction, led by the authors of this article.
Pursuing Perfection tackled a formidable obstacle in the progress of healthcare improvement-the "Toyota problem." The analogy, spelled out in a landmark article by Molly Coye in the November/December 2001 issue of the journal Health Affairs, addresses the transformational effect of Japanese competition on the energy and pace of change in automobile manufacturing worldwide in the 1970s and 1980s and why it hadn't occurred in healthcare.
U.S. carmakers, fat and happy in their heyday of the 1950s and 1960s, when they could sell almost anything they could make, found themselves in the 1970s losing frightening fractions of market share to Japanese manufacturers, Toyota first among them. The reasons for this turn of events are clear only in hindsight.
Imagine yourself as an executive of one of the Big Three automakers in 1970. Five years earlier, Toyota won the Deming Prize, Japan's highest award for quality, based on its efficient production systems and reliable, inexpensive cars. The foundation for Toyota's lean production system had been established. However, these cars were not attractive in the U.S. market, so why worry? The Toyota Corolla was introduced in the U.S. in 1968. At that time, the majority of American families owned only one car, and the Corolla was too small to fit even a family of four comfortably. Its engine was fuel-efficient but puny. That was fine for Japan, where gas was expensive, but hardly a selling point in the U.S., awash in cheap gas. The Corolla was so "low-tech!" The first model did not even come with an automatic transmission, a popular option on all U.S. cars since 1950.
No auto executive could have predicted the two shocks that would change their markets and their business so profoundly and make the lowly Toyota Corolla the second most popular import in the U.S. Figures from the U.S. Department of Transportation indicate that in 1970 less than 70% of the driving-age population had a driver's license. Just 10 years later, about 88% of the driving-age population had licenses, a percentage that has remained stable to this day. Women moving into the workforce and the front edge of the baby boomers accounted for at least part of this increase. In 1975, the number of registered vehicles for the first time exceeded the number of licensed drivers. The multiple-car family became the norm rather than the exception. The entire family did not need to fit into one car.
While the increase in drivers was a culmination of a long-term trend, the second shock, the rise in gasoline prices, was an unexpected, one-of-a-kind event sparked by the oil embargo of the Organization of the Petroleum Exporting Countries. Figures from the U.S. Energy Information Administration indicate the price of gas in inflation-adjusted dollars nearly doubled from 1970 to 1980. In the two previous decades the adjusted price had declined. Fuel efficiency went from unimportant to an attractive quality.
Consumers who were attracted to the low-price, fuel-efficient cars found to their surprise that the cars, although sparse in terms of features, were very reliable. They had few defects related to production. Word spread that these cars were high-value. These two shocks totally changed the market and allowed consumers to appreciate reliability as a quality of an automobile. The insistence on reliability and other dimensions of quality persist today. Now Toyota makes Lexus, one of the most technologically advanced luxury cars on the market as well as one of the most reliable. In essence, Toyota not only made a superior product but also acquired the capability to address successfully any market changes that came along.
In Pursuing Perfection, we sought the same goals for the U.S. healthcare system, a complete transformation of the care and management systems of those healthcare systems willing to participate.
Thus, it was with such an ambitious (some might say over-reaching) set of goals that we held our collective breath when RWJF issued the request for applications to providers. We weren't sure who would be up to this challenge or indeed if anyone would notice.
We needn't have worried: The response was overwhelming and positive. Two hundred and twenty-six organizations applied, ranging from tiny rural hospitals to major academic centers to HMOs. The subsequent selection process, made difficult by the high quality of the vast majority of applications, resulted in the choice of seven U.S. healthcare facilities to participate: Cambridge (Mass.) Health Alliance; Cincinnati Children's Hospital Medical Center; Hackensack (N.J.) University Medical Center; HealthPartners Medical Group and Clinics in Bloomington, Minn.; McLeod Regional Medical Center in Florence, S.C.; Tallahassee (Fla.) Memorial HealthCare; and a community coalition in Whatcom County, Wash., called PatientPowered.
International interest was stirred by the program even before it began, and six European sites applied and joined at their own expense-four health systems in the United Kingdom, a hospital in the Netherlands and a Swedish county (the unit of healthcare organization and funding in that country).
For the past three years, the Pursuing Perfection organizations have been improving performance in projects such as chronic disease management and hospital flow, while building their own "P2 Production System." Each of the organizations has developed tangible and intangible assets that serve them well in today's challenging environment, but more importantly they will allow them to weather the yet unknown but inevitable shocks to the healthcare market. These assets include the following:
* The capability to engage physicians as participants and leaders of improvement work.
* The leadership infrastructure to connect the improvement of quality and value to organizational strategy and to oversee the execution of a variety of improvement projects.
* A robust and motivated workforce capable of designing new systems of care. (Two Pursuing Perfection organizations have a surplus of nurses, one with a waiting list of nurses seeking to join the organization.)
* The technical expertise to design systems of acute-care and chronic disease management that perform at unprecedented levels of reliability.
* The technical ability to engineer hospital systems to reduce delays in hospital flow while increasing or maintaining admissions.
* The technical and political skill to be transparent with the community about quality and value.
One can only guess the shocks that are to come that would make these assets transformational for any organization that possesses them. We may be seeing some early hints of what they might be. Recently, the CMS, in partnership with Premier's health alliance and its 1,600 not-for-profit hospital members, launched a demonstration project that increases reimbursements to hospitals for highly reliable routine care. Five conditions were chosen: community-acquired pneumonia, acute myocardial infarction, heart failure, hip and knee replacement surgery, and coronary artery bypass graft surgery. Participants report process and outcome measures. A large payer offering to pay a premium for reliable, routine care-could this be the beginning of a major shock? Early reports from the demonstration show that only two of the 278 participating hospitals have achieved top performance in at least four out of the five targeted conditions-McLeod and Hackensack, the two Pursuing Perfection hospitals participating in the project. We consider this some early validation of the P2 Production System.
Perhaps the shock will be that at least a segment of healthcare consumers will demand control of their care. The proliferation of birthing centers designed by women of child-bearing age and the increase in patients getting health information on the Internet are some early indications. The P2 Production System as it is developing will be positioned to respond. Cincinnati Children's Hospital early on placed parents on clinical redesign teams-not as tokens, but as active project participants-and the hospital recently made the commitment to do so on every improvement team. Other Pursuing Perfection organizations have followed their lead. The P2 team in Whatcom County, led by St. Joseph Hospital in Bellingham, Wash., part of the PeaceHealth system, is working on getting every one of the chronically ill patients in that county of 176,000 people on a patient-designed "shared-care plan." Under the plan, all providers help coordinate care, but the patients and their families-as much as they are able-manage the care plan.
Maybe the shock will be just as it was in the automobile industry: An attractive product developed outside the U.S. that gains a significant share of the market. J"nk"ping County, Sweden, which has proved to be the overall highest performing of all Pursuing Perfection sites both financially and clinically, has perfected its chronic disease management to achieve some of the lowest hospitalization rates for asthma that the Institute for Healthcare Improvement has ever seen. The U.S. Pursuing Perfection sites have developed the capability to identify and quickly adopt successful elements of other health systems. If a "Toyota" does appear outside the U.S., these sites will be well-positioned to understand its essential elements and adapt them to the American healthcare consumer.
In four articles to follow this one in subsequent issues of Modern Healthcare, some principal participants in Pursuing Perfection will explore in-depth their progress and some important lessons learned, focusing on leadership leverage points, special issues in academic medical centers, the business case for major systemic improvements in care and the crucial role of raising the bar on reliability as a design target.
The bottom line, of course, is this: We do not yet have a Toyota in healthcare. The project's primary goal-total system transformation with unprecedented total performance-remains, to no one's surprise, still out of reach. But it is no longer out of sight. The progress has been extraordinary. In October 2003, the RWJF decided to extend funding for the project for two additional years. Pursuing Perfection has been the most fruitful developmental program ever undertaken by the Institute for Healthcare Improvement, and almost every one of the 13 sites has achieved changes that neither the sponsors nor the sites would have thought possible.