SMart Manufacturing

In his October posting, Paul Borawski talks about a “Smart Manufacturing” initiative to make the factory floor into a profit center (as opposed to a cost center).  In reality, the thoughts behind this approach means uniting innovation with production--locating the R&D shop physically close to the production line.  The idea, of course, is to capture ideas from those actually doing the work and translate those into new processes that are more efficient. 

Before you say “Yes, of course,” think about what has been happening in US manufacturing recently.  The primary approach to reducing production costs has been to move production to a cheaper labor environment or to a country without laws on environmental pollution.  R&D stays here, putting both a geographic and a cultural barrier in the way of innovation. 

So what about healthcare?  Much has been written about waste in healthcare, but the definition of waste has focused on “unnecessary” healthcare that could be eliminated with minimal harm to the population, not at improving the processes of providing care.  At present, these are focused nationally on reducing the amount of healthcare provided under Medicare.  The new Accountable Care Act (ACA) even provides a counterpart to the British NICE commission to decide what healthcare will be allowed.  (For more on how this works, see “My Drug Problem” which begins with “If I lived in New Zealand, I’d be dead.”)  Unnecessary care is thus defined as healthcare that the government doesn’t think you ought to have.  Of course, they may be right.  From a population or an economic perspective, they are probably right much of the time.  But not all the time.  This is the classic difference between populations and individuals.  Look at one example:  Every year, I have a PSA blood test to detect prostate cancer.  It’s not a very good test, and causes a lot of men to have additional tests or procedures when the PSA is abnormal.  Most of these are false alarms, but they cost money for Medicare.  Furthermore, some make the point that some prostate cancer is relatively benign and can be ignored.  So it’s not a slam dunk. The key question is who makes that decision.  The government already has.  They think the PSA is a bad idea and advise against it.  Some day, they will instruct my insurance company not to pay for it.  Eventually, they will not even allow me to pay for it myself.  Maybe I’ll be lucky, and that will be OK.

This approach stresses decreasing the products and services provided, not on gaining customers or market share.  There are very few examples of competition in healthcare.  No hospital goes out of business because their competitor provided appendectomies at a lower price. 

This is one situation where you can have it all.  There is a legitimate need to look at taking better care of patients with chronic diseases, so they don’t need so much care.  There are provisions in the ACA to do this.  There is also a need to look at the efficacy of drugs and procedures, but we must also recognize that there are differences of opinion about what works and what doesn’t.  Furthermore, some patients may want something done in spite of your advice to the contrary.  That’s got to be OK.

Some may remember the HMO era in US healthcare.  It was the only time that the annual cost of healthcare actually fell.  HMOs made their money by denying care.  They made access to care so difficult that only dedicated patients would persist.  Eventually the American people rebelled and HMOs have largely changed their strategy. 

There is a need for the “Smart Manufacturing” approach in the healthcare industry.  We could solve our need to reduce the cost of healthcare by making the processes of care more efficient.  Workers on the front lines of healthcare know how to do this.  It’s time to bring the R&D folks in to help capture those ideas and re-design the processes.  There are off-the-shelf techniques for accomplishing this task.  The only thing missing is the motivational threat of a serious competitor.

Better, Faster, Cheaper

Faster, Better, Cheaper

Remember Veruca Salt in the movie, Charlie and the Chocolate Factory?  Her famous quote is “I want it now, Daddy,” and, as I recall, the results were not good.  So much for spoiled brats and overindulgent parents.

But is that the mirror of us all?  Are we the NOW generation?  Do we want quality or whatever else “now!”  Look at the toys and technologies of the recent past. We all have cell phones, because we couldn’t wait to get home to call.  And what is the chief selling point of the new iPhone?  It’s faster.

Nothing wrong with faster, as long as there is economic advantage or people are willing to pay me to provide ever newer toys with ever shorter delivery times.  Paul Borawski also talked about the rate of change in products and the role of quality in that process.  It’s a real challenge to gather data on what customers liked/didn’t like about the last product and translate that into features for the next one.  Of course, people don’t always know what they want and may change their minds by the time it reaches the market.  (Remember the Edsel?) 

How does this relate to healthcare?  We’re beginning to see some interest in decreasing the cost of healthcare services.  The recent issue of Health Affairs devoted to cost didn’t mention that factor, but others have.  Most agree that there is considerable waste in healthcare as an industry, but there is wide disagreement on where that waste resides.  (It’s always in someone else’s process.)  Nevertheless, when we begin to get serious about taking waste out of healthcare processes, time will be an important metric.  No one likes to wait, and waiting costs money for the institution. I used to know how much it cost per minute to have a patient in my surgery center, whether or not anything was happening to them.  Obviously, the answer was to make things happen faster and get the patient out sooner.  All, of course, without having them feel rushed.  It is possible, and standard QI tools can help.  Every month, we looked at a histogram of time in the surgery center, and pulled the charts of everyone who stayed beyond 2 SD.  From the list of reasons for a prolonged stay, we constructed a Pareto chart and started on the longest bar. 

There were lots of examples—some of them small details, but the bottom line was a win for everyone: the patient went home faster, the surgeon finished his work sooner, and the center made more money. All it takes is a goal: make things happen faster.

The other role of quality in this environment of change is that of a governor—is this change really adding value?  Are we doing this faster just because we can, or does the patient or some other customer really value this change?  Certainly a primary driver of increased healthcare costs has been technology.  These new gee whiz tests and procedures that provide answers to questions not asked or do things we didn’t want done.  The US Preventive Services Task Force has been fighting this battle for years—don’t have mammograms, don’t get PSA tests, and now don’t have tests for ovarian cancer. Their thesis is always that some false positive tests will prompt patients to have further tests or procedures that are not necessary.  The alternative is that some patients will die from undiscovered cancer, but life’s full of choices.  And it is cheaper.

EMPLOYEES

The comment about Culture prompted me to think more about various experiences with employees and how those were colored by the prevailing culture.  Here are some anecdotes with notes on how they relate to the ambient culture.

SUGGESTION BOXES.  Do you have one?  Employees or customers can write a note and put it in the slot, but then what?  I have worked in two organizations where the suggestion boxes were never utilized.  When I asked employees about this, here are the answers:

1.      “Gee, Dr. Burney.  If I have an idea, I just tell my supervisor, and it’s done.  Why should I write it down?”

2.      “We’re afraid we’d be fired.”  (This was a government office where it’s really hard to fire someone, and impossible to do so on the basis of a comment.  Still, the prevailing culture was fear and intimidation.)

Which organization got more suggestions from employees?  One year later, which could demonstrate positive changes in the way things were done as a result of employee input?  Where would you like to work?

LISTENING.  The nurse was almost standing on my toes as she spoke earnestly about why a decision I had announced was wrong.  After listening for a bit, I decided she was right, and when she took a breath, I said, “OK.  You’re right.  We’ll do it your way, starting tomorrow.”  It was a small thing for the organization but a big thing for this nurse.  Next time, it may be important for everyone, and she will feel empowered to speak again.  Employees need to be heard; to feel that their opinions count. 

EMPOWERMENT.  This is where innovation begins.  It is the freedom to try something new and the permission to fail.  There are even companies that give awards for failure on the theory that if you’re afraid of failing, you’ll never try anything new.  Here’s a quote attributed to George Patton: “Tell them what you want done, but don’t tell them how to do it.  They will amaze you with their ingenuity.”  How much money can you spend without asking permission? 

HIRING. How do you hire “good” employees?  The answer, of course, is that you don’t. You hire competent individuals and make them good employees by the way you treat them.  Some argue that you should “hire attitude and teach aptitude.”  True for some positions.  You don’t want the shy, retiring wall flower to be your receptionist. I visited my alma mater a few years ago, shortly after they had installed a new president.  One of the professors told me, “No one would ever leave here to work somewhere else!”  That was probably an exaggeration, but did indicate his respect for the new president and his dedication to the new culture at the university.  New employees will come into that culture and acquire those same values. 

MAINTENANCE.  OK.  This employee has been working for you for a year.  How does s/he feel about the organization now?  Do you know?  Notice that I didn’t ask how you feel about her!  That would bring up the subject of annual evaluations.  Deming has written eloquently about why this is a bad idea.  Read his stuff.  Yes, employees need feedback, but they need it every day, not just once a year.  It needn’t be a formal process.  Here are some useful words and phrases:  “Nice job.  Well done.  Thanks for taking care of that.  I support Mary’s thoughts on this.  Yes!  Good.  Take care of this problem for me.  Put this on letterhead for the boss’s signature.”  You get the idea.  Constant and repetitive affirmation of your confidence and approval.  Awards are nice, but only if the award process is credible.  If awards are given for frivolous reasons or to people who don’t deserve them, it cheapens the whole process.  If you do an annual written assessment, nothing there should be a surprise.  (These are required in the Civil Service.)  As Deming has said, evaluations should never be linked to money.  One thing I like about the Civil Service system is that step increases come at predictable intervals, unrelated to evaluations.  (Unless Congress decrees there won’t be any!  By the way, read carefully.  All those bonuses you read about went to political appointees.  Rank and file Civil Service employees got nothing.)

FIRING. But what if it doesn’t work.  What if you make a mistake?  First, admit that this was a failure of your hiring process.  Fix it.  Then, see if there’s another position where this employee would flourish.  See if something in their personal life is coloring their attitude at work.  I once had a grumpy that no one wanted to work with.  We had a long talk, after which I gave her a substantial raise and added to her duties.  She became an outstanding performer and justified my confidence in her basic abilities. 

However, there are always those who just don’t fit.  Wish them well and bid farewell, but do it quickly.  Yes, it’s hard, but it’s even harder a year later.

IN SUM.  There you have it.  A new set of Robert’s Rules.  These are not new ideas and certainly not mine.  But they work.  The size and complexity of your organization will affect implementation, but the principles are valid everywhere.   

Creating a Quality Culture

Before you can do this, you’ll have to define both quality and culture. Quality is really a slang term in that it has many different definitions in different settings.  For any given organization, quality is what the CEO says it is, but there is plenty of evidence to suggest that his definition should reflect the opinions of his customers.  Of course, he also better have the board behind him on the direction he has defined for the company.  His next job is to convince his employees about his definition of quality.  We’re not talking about an intellectual discussion or mere aquiessence.  This is passion, dedication, & commitment.  The task for the CEO is to inspire a passion for his definition of quality among his employees.

Which brings us to culture.  My favorite definition of culture is “the shared beliefs of a defined group of people.”  We all belong to various groups and share different beliefs, depending on what group we’re with at the time.  Our surgery center had a picnic.  There was a young woman from our billing department who volunteered as leader of a volley ball team.  Nice person.  Good worker.  You would never suspect she would become take-no-prisoners aggressive on the volley ball court.  “I’m from California, and we take volleyball seriously out there.”  She had brought that ruthless competitive culture to our picnic.  I wanted her on my team!  

So what’s the poor CEO to do?  How does he instill this passion for quality?  First, is communication with employees, and you have to do that “every chance that you get; every way that you can.”  But that’s not enough.  You also have to demonstrate that you believe in your own definition—passionately.  Demonstrate this in little ways also, and do it every day.  That’s credibility.  After awhile, the employees will believe you, and they will share your passion, because it’s contagious but only from a credible source.

Part of our culture was for each employee to do their job better than anyone, anywhere.  The corollary was that the organization would provide them the tools and training to do so.  When a nurse identified a need for a rocking chair in the recovery room, the response was “Buy two.” 

When a nurse said, “I read an article about a better way of doing . . . .”  The response was “We’ll start tomorrow, and you’re in charge of making that happen.”

In the State Department, we are registered to ISO 9001.  It took two years to achieve registration but another 5 years to establish ISO as part of our culture.  We’re there now.  This is the way we do business.  Employees believe that it’s a good thing.  (We ask them, so I know.)  This took a lot of talking and training and visiting and celebrating success and public confirmations by the Medical Director.  Actually, we’re not there.  You’re never there.  Just like marriage, any culture requires daily tune ups and affirmations.

Paul Borawski mentioned “feelings,” and that triggered a memory of taking my Lexus in for repairs.  It was leaking a little oil, and I wanted it fixed.  The next day, I got a phone call from the service manager: “We found some other problems, and that $300 estimate I gave you is now up to $1,100,” he said.  “So, how do you feel about that?”  When your tagline is “The relentless pursuit of perfection,” you better include customer feelings in your definition of quality.  To a large extent, customers inherit the feelings of employees.  This Friday, I’m flying on Southwest Airlines, and I’m looking forward to it.  Their employees obviously enjoy their work, and I will enjoy flying with them.  Last month, I flew on United—a totally different culture, and it shows.  Feelings among employees are the result of the culture.  Customers can see through fake feelings.  How about the recorded message: “You call is important to us.”  Well, if it’s important, answer the phone.

The Business of Social Responsibility.

Business and social responsibility are frequently regarded as opposite poles in a decision spectrum.  This is unfortunate and may result from the way such questions are posed.  Sometimes, knowing the right questions or how to look at the decision can frame the decision in a way that makes sense to everyone. 

Several years ago, a Baldrige award winner recalled the day when his lawyer advised him that the state had issued a warrant for his arrest because of the environmental pollution from his factory.  His first thought was to close the factory.  Then, he thought of the employees who would be out of work if he closed, so he decided to stay open.  In looking at the sources of pollution, he realized that the material going into the local streams was waste from his processes and that he had paid for that waste.  Perhaps, if the processes were more efficient, he would be putting less money into the local water.  A few years later, he received an award from the state for environmental stewardship . . . and a Baldrige Award.  Socially responsible decisions made ultimate business sense.

About ten years ago, I installed solar photovoltaic panels on my roof at considerable expense.  The decision was motivated by a love of technology, a need for back-up power, and a desire to reduce the consumption of grid power by my home.  Friends and neighbors laughed and pointed to the long payback period.  However, “payback” is not the only way for a business to evaluate an investment.  My system makes enough electricity to return 6% per year on my investment—and that’s tax free.  (You never pay tax on savings.)  Another socially responsible decision that makes business sense, but only if you know how to evaluate the decision.  I’ll take a 6% tax free return any day.

I once visited a hospital in CA that sponsored a health fair that provided well-child exams and some immunizations without charge to a local indigent population.  I asked why his hospital would do this, and he replied: “My kids play with their kids.  When their kids are healthy, my kids are healthy.  Besides, when they do get a job and money, guess where they buy their healthcare!”  There was more.  He pointed to a pushcart in the hospital lobby.  “That guy used to be on a street corner in town.  Business was poor, and he had no health insurance for his family.  Now, my employees have ready access to good coffee, he has health insurance, and guess where he comes for care!” It’s still not clear that the health fair was a good business decision, but the CEO had evaluated it from social and business aspects and made his decision.  Even considering the donated time and medications, you’d probably have to include the enormous PR value to sell this to the board.  The CEO had done this, and the board had signed off on the health fair for several years. 

My point is that social responsibility and business decisions are not really such strange bedfellows.  Sometimes it means making the decision to “do the right thing,” and then finding a way to make money off that decision.  It’s all in asking the right questions and framing the answers in a way that business people understand.  Perhaps the quality professional is uniquely positioned to help with these decisions, given our emphasis on data collection, analysis, and presentation. 

DEFINITIONS AGAIN

In his 7 Jun posting, Paul Borawski asks whether “quality” is more related to the product/service or to the organization as a whole.  In his speculation, he references a report written by an ASQ Board member for The Conference Board.  The Quality Council of The Conference Board opines that Quality is not merely a set of tools, but they’re a little unsure about what the alternative is. 

The subject of the paper is ostensibly what CEOs are thinking about, but most of the discussion centers on how to achieve excellence in the areas under discussion.  How do you “create a culture of innovation?”  How do you achieve “Global expansion” without over extending.  Human Capital is a perennial problem—how do you get the best employees and then get the best out of the employees you have? 

 Is any of this relevant to healthcare?  Does anyone on the sharp end of healthcare care about innovation?  Global expansion?  Human capital?  Without any real competition—particularly price competition, there is little serious interest, and we even seem to be getting less competitive, as major players stake out spheres of influence.

Whither “quality” in healthcare?  If it’s not a set of tools or techniques, what does quality look like in healthcare?  Part of the answer comes in one of the strategies from the Conference Board under Innovation: “Create a culture of innovation . . . .”  In a comment on Paul Borawski’s original blog, Mike Alumbaugh refers to an “excellence centric culture.”  So what’s a culture anyway?  And how does it relate to quality (whatever that is!).  Think of culture as “a collection of beliefs shared by a defined population.”  Think for a moment, if everyone in your organization worked every day to do whatever they do better than anyone anywhere.  Congratulations.  Assuming you define “quality” as doing something really well, you have just created a quality culture.  Everyone in the organization shares the belief that quality is important.  They know the CEO believes it is important, so quality is now a culture, and employees will work to further that goal. 

Some years ago, I was standing on the deck of the Queen Mary 2.  Three senior officers came thru a door onto the deck near me, and as they did so, one of them bent over to scoop up a scrap of paper from the deck.  Why did she do that?  Cleaning the deck was not her job!  But, yes, it really was her job.  Keeping a neat ship was part of their culture, so of course she would pick up a stray scrap of paper, as would any other employee.

A patient’s family wrote me a thank you note after one of our employees changed a flat tire so the departing patient wouldn’t have to wait for the repair truck.  I knew nothing about this but I wasn’t surprised.  It was consistent with our culture of providing exemplary service—of course he would change the flat tire and not regard that as anything special.  That’s what culture does for you—shared beliefs.  Of course the nurse would make her intake visit in the parking lot, so mom wouldn’t have to awaken her sleeping child. That's what we do here.

You can define “quality” any way you want.  It can mean excellence in customer service.  It can mean cost effective care.  It can mean all of the above or other things.  The only trick is getting employees to share that definition.  That’s leadership. The end result is a culture of quality in the organization.  Tools may be useful and used, but it is the pervasive culture that defines quality in the organization.   A collection of beliefs in a defined population.  

Quality in Government

Is this an oxymoron?  Well, it kind of depends on how you define “quality” and who your customers are.  I work in the Office of Medical Services of the Department of State (DOS).  One customer group we deal with is DOS employees who want to serve overseas.  Our other customer group consists of job applicants with some medical condition that may prevent them from being hired. 

Those in the employee group have little clout as individuals, but as a group they are potent.  If enough of them become unhappy with our services, a directive comes down from above to “FIX THIS PROBLEM!!”  Once we understand what excites senior management, we fix that problem.  And then we fix it again, until it is so slick, we get kudos from customers. 

The applicant group is less powerful.  Some write their Congressman, and that gets attention tho not usually the desired result.  Some hire lawyers.  Again, attention but not usually the desired result. 

And then, a funny thing happened.  Five years ago, we adopted ISO 9001 as a management system.  Now, each of the 30+ sub-processes in MED has a written procedure about how they do what they do.  They know who their customers are and actively solicit input.  The most common metric is clock time, and “stuff happens faster now.” (A quote from an employee survey.)  One process in my office that routinely took 60 to 90 days now gets done routinely in 2 to 4 hours.  A few years ago, it took, on average, 11 months to hire a new employee.  Last month, we interviewed an applicant who applied only two months ago. 

If this still seems long to you, you’ve never dealt with OPM or applied for a Federal job.  If you do so, the person who wants to hire you may never see your application.  Some clerk in HR, who knows nothing about the job will decide how well qualified you are.  The office that has the opening will only see the top three names on her list.  For the rest, it’s a coin toss.

Are we truly worse that the civilian healthcare industry, as Paul Borawski suggests?  No.  We’re better, and I can prove it.  We collect HEDIS data every month from each of our 180 primary care offices around the world.  (Now there’s a challenge!)  Three times a year, we compare our data to the best US healthcare system results and discuss improvement strategies at the senior management level.  In general, we do well, although there are some special challenges in our system.  (Like getting a frozen vaccine to Ulaanbaatar.)  One thing we have that makes all this work is a culture of quality—the universal desire to do a good job coupled with the knowledge that senior management shares that goal.  Each quarter, we discuss errors, deaths, and complaints with those providers stationed in Washington.  I once received this email from a medical officer overseas: “Bob, we made the following mistake in our health unit this week.  Please discuss it at your next meeting.  I’d like to see what the group thinks.” 

How do you get there?  It takes leadership, consistency, and credibility.  It can be done in government.