Dr. Richard Shannon shares how Lean and Toyota-inspired methods dramatically reduced hospital-acquired infections at Allegheny General and the University of Pennsylvania. This episode explores leadership, standardized work, and why disciplined problem solving saves lives and reduces costs.
Podcast #127 is a very special conversation with a leader and a hero of mine in the world of patient safety, Richard P. Shannon, MD. Dr. Shannon is a cardiologist and is Chair, Department of Medicine, University of Pennsylvania School of Medicine and the Hospital of the University of Pennsylvania as well as the Senior Vice Chair for Clinical Affairs, Department of Medicine. We'll be talking about his work in using Lean methods to reduce patient infections and other clinical outcomes.
According to data published by the Institute for Healthcare Improvement, the improvements at Allegheny indicated that “the VAP rate dropped by 83 percent and the CLI rate fell by 87 percent.” Savings lives and reducing cost go hand in hand, as his work shows. This work is now being repeated successfully at UPenn.
Leaders at Allegheny General estimate that patients diagnosed with VAP average a 34-day stay, with a net loss to the hospital of $24,435 after reimbursement; patients diagnosed with CLI average a 28-day stay, at an operating loss of $26,839. For an investment of about $35,000 in improvement work, Shannon estimates that the hospital experienced a $2 million improvement
Dr. Shannon was an early pioneer in the use of Lean and Toyota methods to improve outcomes and patient safety, namely the reduction of hospital-acquired central line bloodstream infections when he was at Allegheny General Hospital, near Pittsburgh, as documented in Naida Grunden's book The Pittsburgh Way to Efficient Healthcare: Improving Patient Care Using Toyota Based Methods. You can see inside the book and some of the mentions of Dr. Shannon via Google Books. In Pittsburgh, as part of the PRHI effort, Dr. Shannon learned from Paul O'Neill, read or hear my interview with O'Neill.
This podcast was produced in conjunction with the Healthcare Value Network as a continuation of their previous podcast series.
For a link to this episode, refer people to www.leanblog.org/127. Scroll down this page for a transcript of this episode.
Related Posts:
- Toyota video about Lean at Allegheny
- Interview with Dr. Shannon
- Some Data on Patient Safety and Quality Improvement, including PRHI and Allegheny
- Podcast with Paul O'Neill
For earlier episodes, visit the main Podcast page, which includes information on how to subscribe via RSS or via Apple Podcasts.
If you have feedback on the podcast, or any questions for me or my guests, you can email me at leanpodcast@gmail.com or you can call and leave a voicemail by calling the “Lean Line” at (817) 372-5682 or contact me via Skype id “mgraban”. Please give your location and your first name. Any comments (email or voicemail) might be used in follow ups to the podcast.
Transcript:
Introduction and Background
Welcome to episode 127 for August 17, 2011. Today's episode is a very special conversation with a world leader and a hero of mine in the realm of patient safety improvement: Dr. Richard P. Shannon. He is a cardiologist and is Chair of the Department of Medicine at the University of Pennsylvania School of Medicine and the Hospital of the University of Pennsylvania, as well as the Senior Vice Chair for Clinical Affairs in the Department of Medicine.
Dr. Shannon was an early pioneer in the use of Lean and Toyota methods to improve outcomes and patient safety, namely the reduction of hospital-acquired central line bloodstream infections and ventilator-associated pneumonia when he was at Allegheny General Hospital. Originally, Dr. Shannon learned about Lean and Toyota methods from PRHI (the Pittsburgh Regional Health Initiative) and from Paul O'Neill.
This podcast episode is produced in conjunction with the Healthcare Value Network. To learn more, you can visit the Healthcare Value Network or the ThedaCare Center for Healthcare Value.
Redefining a Medical Career Through Process Improvement
Mark Graban: Dr. Shannon, thanks for taking time to talk on the podcast today.
Dr. Richard Shannon: It's great to be with you, Mark.
Mark: Maybe just introduce yourself and your role and your background for the listeners, please.
Dr. Shannon: Sure. I'm the Chairman of the Department of Medicine at the University of Pennsylvania here in Philadelphia. For about the last decade, I have been engaged in a redefinition of my career–one where I've taken a much more compelling interest in process improvement, particularly toward the elimination of harm to patients in our hospitals. I think our acquaintance is occasioned by the idea of using tools such as Lean methodologies in hospitals as a way to get better and better at everything we do in the delivery of care to patients.
Early Exposure to Lean and the Influence of Paul O'Neill
Mark: The initial redefinition started back in Pittsburgh. I wonder if you could talk about the origins of how you first got exposed to these ideas and your history with Paul O'Neill.
Dr. Shannon: My redefining my career occurred as a result of a chance meeting with Paul O'Neill at a time when he was still the CEO at Alcoa. At that time, he called together hospital leadership to ask them to be held accountable for cardiovascular outcomes. Mr. O'Neill noticed wide variations in outcomes and payments. He challenged leaders, saying that businesses were struggling under the weight of double-digit increases in health care costs yet weren't seeing value attributed to it.
At that meeting, I was asked to defend the honor of my institution because our results weren't that good. As I began to give the traditional litany of excuses, Paul said that was all very nice, but the job of leaders is to take away excuses by redefining the way in which work was done toward the elimination of waste and harm. A day later, Paul O'Neill and I had lunch, and that has created a decade-long friendship and mentorship.
Applying Toyota Methods to Hospital-Acquired Infections
Mark: Can you share the method of looking at reducing hospital-acquired infections using ideas inspired by Toyota, such as standardized work and quality methods?
Dr. Shannon: The concept was to first be transparent about the problem and to decode existing data from complex epidemiologic metrics. On the one hand, “7.6 infections per 1,000 line days” may mean something to an epidemiologist, but it means nothing to a nurse or a physician at the point of care. Yet if you say 56 people had 62 infections and 20% died, that creates a very different definition.
The first step is the strict definition of the problem based upon intense observations of the current condition. We broke down the process of a central line into placing, maintaining, and manipulating the catheter. We had the people who did the work find the standard processes, test them, and create countermeasures.
In Pittsburgh, we went from 49 infections down to four over three years. Doing similar work here at University of Pennsylvania, we've gone from 361 infections down to 11. We've reduced the number of central line infections by close to 97%.
Engaging the Workforce and Overcoming Time Constraints
Mark: One misperception is that standardized work or checklists are just dictated to people. How do you engage the people doing the work?
Dr. Shannon: The key is bringing discipline and structure to problem solving using techniques like the “Four Whys” and “5S.” The challenge is to take those tools and put them in the hands of people that actually do the work. This requires pulling people off the line and training them in mentored Kaizen-like events.
Mark: Everyone says that sounds great, but we don't have time. How do you address that?
Dr. Shannon: You need leadership commitment. Here at Penn, we trained 220 nurses on our oncology units. To do that, we actually brought in one extra nurse for each shift for about six weeks so we could pull people off the line to engage them in this capability. Once you teach people the power of these things and allow them the freedom to solve problems, you never go back. The initial upfront investment is modest compared to the sustainable power of developing those problem-solving capabilities.
Treating “Sick Systems” Like Sick Patients
Dr. Shannon: Nurses and doctors spend their day rounding on sick patients, which involves collecting history and creating interventions. Each of those clinical tools has a systems counterpart. What's the background to the problem? What's the current condition? As leaders, we have to round on “sick systems” within our hospitals and apply the same kind of clinical reasoning.
Beginning next week, we're taking 12 of our medical residents to a three-day intensive deep dive into Lean. For 32 weeks, they will be creating the “perfect patient discharge.” Using Lean tools, we ask what the patient wants and needs to make a successful transition back to health. If we do that, the consequence will be that no one needs to be readmitted.
The Future of Lean in Healthcare Leadership
Mark: What are your thoughts on the spread and adoption of these ideas by leaders in other organizations?
Dr. Shannon: These ideas continue to gain momentum, but it is still too slow. You see great progress in organizations like Virginia Mason or ThedaCare where the CEO believes deeply in these ideas. But until the leaders at healthcare organizations themselves adopt these strategies, we won't get the transformational change the system needs.
I'm encouraged by efforts from CMS and Don Berwick, who is articulating the elimination of waste through process redesign. We are beginning to see these ideas permeate healthcare in a deeper way, but the system needs to transform very quickly. Until academic medical centers adopt these strategies, we'll have islands of excellence, but we won't have cured the system.
Mark: Well, Dr. Shannon, I want to thank you for taking time to share your story and helping to inspire others. Best wishes to you there at the University of Pennsylvania.
This episode features Dr. Richard Shannon discussing Lean healthcare, Toyota methods, and patient safety improvement. Learn how standardized work and frontline problem solving reduced hospital infections and saved lives.
Why This Still Matters in 2026
In 2026, healthcare leaders face relentless pressure to move faster, cut costs, and adopt new technologies — often simultaneously. What this episode underscores is a hard truth: none of those efforts produce lasting results without strong systems for learning and problem-solving. Dr. Shannon's work demonstrates that patient safety and financial performance improve together when leaders invest in disciplined improvement, make problems visible, and involve the people closest to the work.
The lesson for today's executives is not about adopting “Lean tools,” but about how leadership shows up. Rounding on systems, insisting on evidence over opinion, and creating space for frontline learning are still decisive advantages — especially in complex, high-risk environments. In an age of dashboards, AI, and strategic urgency, this conversation is a reminder that sustainable performance is built the same way it always has been: through leaders who take responsibility for the system and develop people to improve it.
Summary of Key Lean Principles
Based on Dr. Shannon's experience at Allegheny General and the University of Pennsylvania, here are the core Lean principles and tools that drove their success:
1. High-Agreement Standards (Standardized Work)
Rather than just using a checklist for the insertion of a catheter, Dr. Shannon's team standardized the entire lifecycle of the device. This included:
- Placement: Ensuring the initial procedure is done correctly.
- Maintenance: Standardizing how the site is cleaned and dressed.
- Manipulation: Defining exactly how the line is accessed for medicine or blood draws.
2. Direct Observation and “Sick Systems”
Dr. Shannon argues that leaders must treat “sick systems” with the same clinical rigor that doctors treat sick patients. This involves:
- Gamba Walks: Going to the “point of care” to see how work is actually being done.
- Deep Observation: Identifying the “current condition” before trying to fix it.
- Root Cause Analysis: Using the “Four Whys” to move past surface-level excuses and find the system failure.
3. Decoding Data for the Frontline
A major hurdle in healthcare is that data is often trapped in academic metrics. To engage workers, Dr. Shannon recommends:
- Moving from “Infections per 1,000 line days” to “Total lives lost.”
- Telling the individual stories of patients harmed by the system to create a compelling “target condition.”
4. Investing in “Off-Line” Training
One of the most significant insights provided is the logistics of training. To train 220 nurses, the hospital:
- Staffed up: They added an extra nurse per shift for six weeks.
- Mentored Kaizens: They didn't just hold a seminar; they pulled staff off the line to solve real problems in their own units under the guidance of a mentor.
5. Transitioning to “Perfect Patient Care”
Instead of focusing on negative metrics like “readmission rates,” Lean leadership focuses on the “Perfect Patient Discharge.” This flips the focus to providing exactly what the patient wants and needs to stay healthy once they leave.
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If you’re working to build a culture where people feel safe to speak up, solve problems, and improve every day, I’d be glad to help. Let’s talk about how to strengthen Psychological Safety and Continuous Improvement in your organization.
Great to hear from Dr. Shannon – he is a hero of mine as well, and I cite his work, his dedication to improvement, and his willingness to believe in zero defects often when I speak to healthcare groups.
Allegheny General was the first hospital in which I participated in an improvement project, back in 2006. It was nice to know the senior management was very forward-thinking at that time; you could’ve guessed they would succeed based on the leadership alone. Kudos to Dr. Shannon on the success, especially with the most important metric of all – patient safety.
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