We realized we needed to challenge many of our longstanding beliefs and assumptions. That led to work on a new leadership compact between our physicians and the organization. We went on a search for a management system. I personally looked at many of the great healthcare institutions in the U.S., but I didn't find any that were consciously using a management system. That's when we almost serendipitously discovered that Boeing just down the street was seven to eight years along in deploying the Toyota Production System. When we realized that Boeing was able to reduce the lead time to construct the 737 airplane from 22 days to 11 days, and in so doing build a safer aircraft at less cost, we said wow, this might have applications for healthcare. As we began to study this, looking at some of the best manufacturing companies in the world, particularly Toyota, we came to realize that it had a huge application for us at Virginia Mason and for healthcare in general.
Starting in 2002, when we took our first trip to Japan, we changed our minds about many, many things. We now visit Toyota in Japan for two-week intensive study missions every single year.
MH: What were some of the challenges?
Kaplan: Change is very, very hard in healthcare. We have learned a lot about change management. Not everybody wanted to come along. There were perhaps 10% who were early adopters, 10% who were very resistant to any kind of change and probably 80% of the people—and I'm talking about physicians, nurses and others—in the middle, just sort of saying we'll see what happens and this too will pass.
I think we surprised people with our perseverance. Today, we're possibly the furthest along of anybody in healthcare who's consciously deployed a management method for more than a decade. But the most significant accomplishment is understanding that the pathway to improving quality and safety is the same pathway to lowering cost, and that involves relentlessly taking waste and unnecessary variability out of our processes. This creates a much higher quality, better patient experience.
It creates an opportunity for people to be empowered to use their best thinking to redesign their work. Our staff, who are closest to the work, are the ones who redesigned the work and in so doing reduced the burden of work.
MH: Surgeons and specialists are famous for wanting to do things their own way with their own selected equipment and supplies. Has that been a problem as far as reducing variation?
Kaplan:: Sure, but I think that's true for internists like myself and other physicians as well. Traditionally, physician autonomy has been thought to be the sine qua non of professionalism, and that only we know what's in the best interests of our patients. At Virginia Mason, we've been able to move from that approach and we understand that healthcare is impeded, not facilitated, by the notion of physician autonomy. Our physicians are actively engaged in supply-chain initiatives that standardize prostheses. One of our early rapid-cycle improvement events in 2001 was standardizing laparoscopic cholecystectomy trays, enabling us to save $700-$800 for every case by getting all the surgeons to realize that customized setups were unnecessary. We found is that if we eliminated nonvalue-added variation, the result is we create time for the value-added variation that differentiates individual physicians from each other and for patient preferences.
MH: Is there any statistic that you're particularly proud of?
Kaplan: One of the things I'm most proud of is we're the only hospital in the U.S. to be named by Leapfrog a top hospital in every year that designation has been given. We reduced cumulative nurse walking distance in the hospital by 750 miles per day, which freed up more than 250 hours of time for direct patient care. Capital expenditure is one thing we're very focused on measuring and we've documented significant savings both in capital as well as supply-chain expense. We adopted our patient-safety alert system directly from Toyota. We've had over 30,000 patient-safety alerts since the program started in 2002. The result is a culture where close to 90% of all our people participate in our Culture of Safety Survey, when the national average is 50%.
MH: What area remains the hardest to measure, and can you make improvements without precise data?
Kaplan: Outcomes measures have eluded us in healthcare for a long time. We're getting better, but it's a challenge. The entire continuum of care is a challenge to measure, given that we have patients coming in for care from Alaska, Montana and across Washington state, and Walmart and the Pacific Business Group on Health send patients here for heart and spine and total joint care. So it becomes quite difficult at times to measure the entire continuum of care.
One of the interesting things we've learned is that standardizing processes is really important even when there is no incontrovertible double-blinded study evidence. The standardization in itself allows us to measure and then it allows us to eliminate defect-prone situations. If a team of people do things nine different ways, that creates opportunities for defects to occur, and that's what we want to eliminate.
MH: I read that Virginia Mason brought in $934 million in revenue in 2012, and I was wondering if 2013 would be the year you break the $1 billion mark.
Kaplan: We're very close. In 2014, we're budgeted to exceed the $1 billion mark and we're continuing to grow. One of the things that's exciting is that this work is all about creating higher-quality, safer care and lower costs. Strategically, our organization is working hard to translate that into greater value for our patients and our community and a business model that's badly needed in this country—taking waste out of our processes, lowering costs and creating a better patient experience.
MH: One of the more famous examples of your quality-improvement process was the initiative Virginia Mason undertook with Starbucks and other large employers to treat back pain, where you found you could reduce the use of MRIs.
Kaplan: That was the first of many marketplace collaboratives, which were created by the questions employers were asking. We came to realize that a large number of patients with back pain were getting MRIs, and that only a small fraction of those were necessary. The result was redesigning the processes of care and eliminating all the unnecessary MRIs. It allowed us to quickly identify those patients who were at risk for neurologic concerns and actually required an MRI, and then quickly triage the majority of patients for rapid access to physical therapy and rapid return to work.
MH: How will ACO accountable care and value-based purchasing affect Virginia Mason?
Kaplan: We welcome the changes that are here and are coming. More transparency is critical, and it plays right to our sweet spot. If we are able to improve quality and safety and lower costs, that's going to allow us to succeed in a marketplace that's more driven by value than volume. We see reform as a catalyst to accelerate our work, and it's going to help move the entire industry in ways that will improve quality and lower cost.
MH: What developments do you see on the horizon for 2014 that have you most concerned and most excited?
Kaplan: It's about staying the course and continuing to work harder and at a much deeper level to take the waste out of our processes and get closer to that zero-defect, perfect patient experience. We continue to learn about what it means to listen to the voice of our patients. We look forward to a time when there's more transparency in our market because of our quality and patient experience as well as our cost position, which is substantially below the cost of our most significant competitors.
Follow Andis Robeznieks on Twitter: @MHARobeznieks
