Case Introduction

In the early $2000$s$,$ Seattle$$s Virginia Mason Hospital was not performing as well as it should have been. Financial returns were low, patient satisfaction was subpar, too many errors were occurring during patient treatment, and staff morale was suffering. Gary Kaplan, the CEO, was wondering what to do about this when he experienced a chance encounter with Ian Black, the director of lean thinking at Boeing. Black told Kaplan that Boeing had been implementing aspects of Toyota$$s famous lean production system in its aircraft assembly operations, and Boeing was seeing positive results. Kaplan soon became convinced that the same system that had helped Toyota build more reliable cars at a lower cost could also be applied to health care to improve patient outcomes at a lower cost.

In $2002,$ Kaplan and a team of executives began annual trips to Japan to study the Toyota production system. They learned that $$lean$$ meant doing without things that were not needed; it meant removing unnecessary steps in a process so that tasks were performed more efficiently. It meant eliminating waste and elements that didn$$t add value. Toyota$$s system applied to health care meant improving patient outcomes through more rapid treatment the elimination of errors in the treatment process.

Kaplan and his team returned from Japan believing in the value of lean production. They quickly set about applying what they had learned to Virginia Mason. Teams were created to look at individual processes in what Virginia Mason called $$rapid process improvement workshops.$$ The teams, which included doctors as well as other employees, were freed from their normal duties for $5$ days. They learned the methods of lean production, analyzed systems and processes, tested proposed changes, and were empowered to implement the chosen changes the following week.

The gains appeared quickly, reflecting the fact that there was a lot of inefficiency in the hospital. One of the first changes involved the delay between a doctor$$s referral to a specialist and the patient$$s first consultation with that specialist. By examining the process, it was found that secretaries$,$ whose job it was to arrange these referrals, were not needed. Instead, the doctor would send a text message to the consultant the instant he or she decided that a specialist was required. The specialist then needed to respond within $10$ minutes, even if only to confirm the receipt of the message. Delays in referral$-$to$-$treatment time dropped by $68\%$ as a consequence of this simple change, which improved patient satisfaction.

On another occasion, a team in the radiation oncology department mapped out the activities that the department performed when processing a patient with the intention of eliminating time wasted in performing those activities. By removing unnecessary workflow activities, patient time spent in the department fell from $45$ minutes to just $15$ minutes. A similar exercise at Virginia Mason$$s back clinic cut treatment time from an average of $66$ days to just $12.$

By $2012,$ Virginia Mason was claiming that lean production had transformed the hospital into a more efficient, customer$-$responsive organization where medical errors during treatment had been significantly reduced. Among other gains, lean processes reduced annual inventory costs by more than $$1$ million, reduced the time it took to report lab tests to a patient by more than $85\%,$ freed up the equivalent of $77$ full$-$time employee positions through more efficient processes, and reduced staff walking distance by $60$ miles a day, giving both doctors and nurses more time to spend with patients. These, and many other similar changes, lowered costs, increased the organization$$s customer responsiveness, improved patient outcomes, and increased the financial performance of the hospital.

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