• What Virginia Mason Learned From Toyota

    Sep 24, 2012

    By Maureen Bisognano and Charles Kenney

    By applying business concepts, Virginia Mason turned a potential loss of an insurance contract into an opportunity to deliver more efficient and effective care, as detailed in this excerpt from the book Pursuing the Triple Aim.

    Trip-Aim-Book-Cover_web-thumbnailA crisis drove an innovative breakthrough at Virginia Mason Medical Center. Robert Mecklenburg, MD, was chief of medicine at the hospital in 2004 when the insurance company Aetna threatened to exclude Mecklenburg's healthcare organization from an elite network. Aetna was in a powerful position as a purchaser of care for such major companies in the Greater Seattle area as Starbucks, Costco, and Alaska Airlines, among others. Losing this business would be a blow not only to Virginia Mason's finances but to the medical center's prestige as well.

    Aetna was not doing this on a whim. Aetna's data had revealed that Virginia Mason was more expensive than its major competitors in a number of important specialties. Mecklenburg and his colleagues were alarmed, although the more Mecklenburg thought about it, the more he viewed the situation as a potential opportunity. He was deeply engaged in Virginia Mason's adaptation of the Toyota Production System as its management method and was working closely with CEO Gary Kaplan, MD, and the rest of the Virginia Mason leadership team in that process.

    Who's Writing the Checks?

    Mecklenburg began to focus intently on the question of who his customer was. At Virginia Mason, the patient was at the top of the pyramid that embodied the medical center's strategic plan and its vision to transform health care. But the fact was that employers paid the bills. In fact, they paid huge dollars for their employees' care. Mecklenburg realized that neither he nor his physician colleagues had ever really considered the companies paying the bills as customers. In fact, Mecklenburg wasn't sure he or any of his colleagues had ever met with or talked to the people writing the checks.

    Mecklenburg realized that Virginia Mason was a supplier to these employers; a supplier that provided a critically important and increasingly expensive set of services to employees. Healthcare costs are typically one of the leading employer expenses, and the great majority of these companies managed their suppliers with rigor and discipline-with the notable exception of healthcare suppliers.

    To gain a better understanding of what employers wanted from him, Mecklenburg met with Annette King, benefits manager at Starbucks. She was taken aback for she had never before had a doctor come to her office and ask her how he could improve care for her employees. King revealed that one of her employees' biggest health issues was back pain. In fact, the costs to treat back ailments were causing pain, missed work, and driving up her costs while hurting productivity.

    Mecklenburg invited Starbucks and Aetna to join with Virginia Mason in forming a marketplace collaborative to identify and solve the quality and costs issues around the treatment of routine or uncomplicated back pain. The head of the hospital's spine clinic offered medical expertise. The collaborative identified five principles:

    1. Focus on customers' highest costs.
    2. Adopt customers' definition of quality.
    3. Create evidence-based clinical value streams.
    4. Employ systems engineering tools to remove waste.
    5. Use a cost reduction business model.

    The team discovered that 80 percent to 85 percent of patients with back pain suffer from an uncomplicated medical condition best cured by physical therapy; the remaining patients needed more advanced treatment. Uncomplicated back pain became the target of opportunity for improving efficiency and effectiveness in the delivery of care.

    MRIs "No Help at All"

    After reviewing a value stream map, which defines and analyzes each step in the care process, Mecklenburg found that money and time were being wasted on expensive visits with primary care physicians and specialists that added little relief to the patients' conditions.

    Mecklenburg offered a surprising conclusion to Annette King. "The value stream showed that most of our care process was no help at all," Mecklenburg said. Many patients with uncomplicated back pain were receiving MRI tests at a cost of $1,200 each to Starbucks, yet the evidence indicated that test provided zero clinical value. Needless waits and delays for care were substantial and did not add value. It was pure waste.

    The team defined the five components of quality care from the customer's perspective:

    1. Evidence-based care
    2. 100-percent patient satisfaction
    3. Same-day access
    4. Rapid return to function
    5. Affordable cost for both providers and employers

    Mecklenburg identified a process to move uncomplicated back pain cases through the system quickly and efficiently. After 90 days, the new pathway for these patients cut waiting time for an appointment from an average of 31 days to same-day access. In addition, 94 percent of patients were returned to work that day or the next. No prescription medications were needed in three-quarters of the cases. Patient satisfaction ratings were through the roof.

    Outcomes of the Collaborative

    In addition to raising the quality of care for Starbucks' employees and decreasing the cost to the company, the marketplace collaborative delivered the following benefits.

    Increased patient capacity. By reducing the number of patients who obtained procedures and tests unnecessarily, Virginia Mason increased its patient capacity.

    Improved treatment pathways for other health conditions. Mecklenburg and his colleagues developed marketplace collaboratives for other health conditions, including migraine headaches; breast nodules; shoulder, knee, and hip pain; acid reflux; and cardiac disease.

    Evidence-based scheduling of expensive imaging tests. Mecklenburg employed a Toyota principle called "mistake proofing." Patients were asked to check boxes on a questionnaire to determine their need for MRIs and other imaging tests. One click of the cursor both scheduled the test and ensured that imaging was evidence based. If the patient matched none of the evidence-based indicators, the test could not be ordered.

    In addition, the initiative led to the founding of the Virginia Mason Institute and the Center for Health Care Solutions at Virginia Mason Medical Center. The marketplace collaborative drew international attention, and providers from around the globe wanted to learn from Virginia Mason's research and successes. As a result, the hospital formalized its processes and shared the organization's knowledge.

    This article is an excerpt from Pursuing the Triple Aim: Seven Innovators Show the Way to Better Care, Better Health, and Lower Costsby Maureen Bisognano and Charles Kenney. Bisognano is president and CEO of the Institute for Healthcare Improvement. Kenney is the author of 12 books.

    This excerpt is reprinted by permission of the publisher, John Wiley & Sons Inc., from Pursuing the Triple Aim: Seven Innovators Show the Way to Better Care, Better Health and Lower Costs by Maureen Bisognano and Charles Kenney. Copyright (c) 2012 by John Wiley & Sons Inc. All rights reserved.