William Brewer
Denver Health is Colorado’s primary “safety net” institution. In the past 10 years, the organization has provided more than $2.1 billion in care for the uninsured. About $285 million in care for the uninsured was provided in 2007--nearly 30 percent of uncompensated care provided in the entire state. Twenty-five percent of all Denver residents, including one of every three children in the city, are cared for through Denver Health.
Denver Health has a reputation for high performance. But five years ago, the health system suffered operating losses of more than $6 million and, for the first time in its history, was forced to implement employee layoffs.
Denver Health’s CEO and medical director, Patricia Gabow, MD, realized that quick-fix cost-cutting measures were not the answer to the health system’s financial crisis. What was needed was a radical and sustainable transformation, a new way of attacking waste in processes and resource utilization not just in the supply chain, but also throughout the organization.
Identifying Areas for Improvement
Denver Health undertook a yearlong information-gathering and planning process that extended beyond the boundaries of health care to include an examination of best practices from quality innovators in other industries. Denver Health identified five integral components of system transformation:
- The right physical environment
- The right people
- The right processes
- The right communication and culture
- The right reward system
The project planning team concluded Denver Health could achieve transformation only through an integrated, multipronged approach. The team decided to adopt the principles of “Lean manufacturing,” a process improvement model perfected by automaker Toyota. To provide objective oversight and stimulate new ideas, Denver Health formed an executive steering committee that included not only healthcare leaders, but also leaders from corporations known for their quality and customer service, such as Microsoft, Dell, and Ritz-Carlton.
Key Action Steps
Denver Health implemented two key action steps for improvement: the training of 50 health system leaders in production techniques that could be applied to health care and a series of week-long rapid improvement events to improve processes in five areas:
- Access to care
- Billing
- Outpatient flow
- Inpatient flow
- Operating room (OR) flow
Health system leaders who underwent training were responsible for applying Lean tools as part of their daily work to eliminate waste within their areas. Each month, they reported the impact of these improvements to the CEO.
Five rapid improvement events--weeklong events during which a team focuses on a particular process, with the aim of reducing 50 percent of the waste--were conducted each month at the health system, with improvements concentrated in each of the five target areas.
Denver Health CEO Gabow met monthly with executive leaders to discuss progress and make adjustments. The results have been significant: The OR flow team “significantly increased the number of patients who received antibiotics within the appropriate time frame before surgery--one hour, as recommended by national guidelines--from 80 percent at baseline to 96 percent in July 2006. Another Denver Health team strongly influenced the design of a new Medical Intensive Care Unit, making it more patient- and family-centered, as described in a recent report by the Commonwealth Fund (Nuzen, R., et al., Denver Health: A High-Performance Public Health Care System, July 2007).
The initiative has paid off: Denver Health has realized cost savings and revenue enhancements totaling more than $11 million in the past three years. Today, 120 rapid improvement events are taking place throughout the health system, and more than 130 health system leaders--including more than 20 physicians--have been trained in Lean production principles to reduce waste and improve efficiency.
Over the past few years, Denver Health has posted its best net revenue in recent history. Lean principles have been fully integrated into the system’s culture and operations; more than 25 percent of all employees are being trained in Lean production techniques or are taking part in rapid improvement event projects. According to the 2007 report published by The Commonwealth Fund, Denver Health is a high-performance public health system that “has succeeded at providing coordinated care to the community, promoting a culture of continuous quality improvement, adopting new technology and incorporating it into everyday practice, taking risks and making mid-course corrections, and providing leadership and support--and accepting accountability--both at the top and throughout the organization.”
Oversight for both the rapid improvement events and the Lean training has multiple levels. Gabow meets monthly with the executive staff to discuss progress and make adjustments. The health system also has created at “Lean Systems Improvement” department comprising 11 full-time personnel who facilitate projects and conduct regular meetings with the Lean training and rapid improvement event teams.
Denver Health also measures its progress on automating documentation processes related to the supply chain. According to Phil Pettigrew, director of materials management for Denver Health, the organization now electronically generates more than 95 percent of supply requisitions and has automated more than 60 percent of its purchase orders. Its long-term goal is to be completely automated from requisitions and purchase orders to invoices and electronic funds transfer.
Lessons Learned
Denver Health has learned a number of lessons through its Lean initiatives.
- Lean is a tool that is applicable to health care, but for transformation to occur, it must be part of a more comprehensive, organization-wide strategy.
- Implementing Lean tools--such as training in Lean principles and conducting rapid improvement events--can be effective in creating a culture in which Lean becomes an accepted part of everyday work.
- Executive staff should own value streams that represent their areas of operational responsibility, and these streams should reflect an organization’s strategic imperatives.
- Having executive staff lead rapid improvement events for an entire week twice a year sends an important message to employees regarding the value of these events.
- Physician engagement is highly valued by the team members.
- Widespread employee involvement is essential. Employees appreciate the chance to get together for a week to focus on a process that they all agree needs to be improved.
- Once a Lean department is created, employees understand that Lean is no longer “an experiment,” but a way of life.
- Continuous communication to employees about Lean’s progress is critically important (Denver Health does this in part through its employee newsletter, Getting It Right).
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William Brewer is senior consultant, supply chain informatics, University HealthSystem Consortium, Oak Brook, Ill. (www.uhc.edu).