The Evolution of Lean in Healthcare


Today's Detroit News wrote about lean in healthcare, this time in their own beloved University of Michigan system. Titled “U-M Hospital Takes Page from Toyota,” it starts out with a flaw, stating:

“U-M is one of the first medical centers in the United States to apply to health care the corporate culture known as the “Toyota Way,” a strategy based on eliminating pointless work and empowering employees.”

This makes it sound more like a press release for their own faculty, Jeff Liker who researched and wrote about Toyota.

So here's a little history about lean in healthcare.

Lean has been entering the healthcare ranks for at least 11 years, and probably much longer. In the mid-90s, the Big 3 starting bringing lean, at least their version of lean at the time, into healthcare.

The reason? Because healthcare costs were more than the seats, the engine, or anything else they put into the vehicle.

Because of who brought it, along with the reasons why, the focus was on cost. Lean went into the insurance companies and into hospitals. Dozens and dozens of hospitals were running kaizen workshops on everything from the waiting room to the surgical unit.

The problem was one universal voice from doctors and nurses: “we're caregivers.”

The message: don't try to make me efficient, as cost is secondary. It even shows up in this article on U-M where one doctor states “patients aren't Toyota.” Although sometimes I think we treat cars and people the same.

Their point was completely valid. The primary focus of healthcare is health, meaning providing care. Over the past 10 years, lean in healthcare has evolved to focus on patient care. Today, I can say for sure that over 100 hospitals are involved in some way in lean, but likely many, many more.

There aren't many, or any, Toyotas of healthcare out there. But one shining example (there are many, so I'm not putting one over others) is the Pittsburgh Regional Healthcare Initiative. They have taken lessons from many sources: Alcoa (Paul O'Neill was founding chair), Toyota, Steve Spear (now with Institute for Healthcare Improvement) and our organization.

They have branded their efforts with a great name: Perfecting Patient Care. It focuses on patient care, not just the stuff that looks like manufacturing. They have done an incredible job at reducing hospital-acquired infections, a leading cause of death in the U.S. This has not only saved lives, but has saved millions of dollars. The U-M article talks about appointment wait times. Yes, that's valuable, but the heart of lean in healthcare has got to be focused on the actual delivery of care. In manufacturing, you wouldn't clean up your spare parts room if you can't manufacture product for your customer.

Let's talk about lean as it relates to the customer, or the patient. There is an even bigger movement in healthcare that has found a partner in lean. That is evidence-based medicine. While some of you might feel it, most people are shocked to know that most medicine is not based on science but based on protocols, experience and sometimes even gut. There is science in there, but most doctors can not say that A is the right treatment for B with anything near the confidence they portray.

Of course, if we taught more doctors the ins and outs of statistical analysis, they might better understand the problem. But one doctor is at the heart of the battle, Dr. David Eddy. Eddy was profiled by a cover story in Business Week titled Medical Guesswork. I highly recommend everyone who might someday be a patient read this article (that means you).

It profiles Eddy's campaign to dispel the myths of many medical practices, and to replace it with true clinical work. In some cases, his research yields examples of over treatment (overprocessing, in lean vernacular) where significant spending produces no increase in results. In some cases, he reveals practices that are just scary in their history. One of the best examples, I believe, of tribal knowledge in healthcare is that Eddy discovered that the very common practice of women who receive C-sections continue to use C-sections for birth can be traced back to the recommendation of one single doctor. Where's the science in that?

Lean in healthcare is about delivering value to the patient. Most of lean in healthcare focused on the “how” of delivering services and treatments, but as Eddy demonstrates, we also have to question the treatment itself.

Dr. David Eddy did write a book, called Clinical Decision Making.

Medical errors are a huge contributor, and should be a huge focus of lean in healthcare. In looking at the flow path for a prescription from source to delivery, it can take on hundreds of routes.

Recently, Dateline covered a story of how failures in the delivery of service can lead to even death. In this case, it was a new mother who never made it home. An interesting group called the Committee to Reduce Infection Deaths (I hope it's not really being solved in a committee) published a report on what you can do to protect yourself from the “system.”

Of course, until the system is improved, patients must take responsibility for their own outcomes. But it is a sad fact that we consider the best possibility of reducing deaths by educating millions of people on how to avoid major problems. Here are 15 steps you can take to reduce your risk.

Failures in the delivery of service are basically the fallout of the concept that bad systems beat good people. In the past few weeks, I spent several hours in the emergency room when my daughter had difficulty breathing. During a period of 4 hours, I witnessed two discrete events of failure in the delivery of service. In one case a treatment the doctor had ordered never got handed off to the appropriate person. This link was broken, and if I hadn't sought out the doctor to repair the link, it would only have been found when the doctor returned for a follow up hours later.

The second case was much worse. Two treatments were needed, I'll call them A and B. One RN had delivered A. When another returned (during shift change) they tried to deliver A again. A and B are almost identical, and only when I stopped the RN did he go to check and make sure. It turns out he needed to do B, and A would have been the wrong thing. This wouldn't have resulted in serious harm, but that doesn't make mismedication any less scary. It was only the fact that I approached this from the standpoint of “bad systems” and not “bad people” was I able to observe and correct the two errors. Eventually, we all made it home unharmed, a fact I am thankful for.

I must note, in the spirit of bad systems beat good people, that every person we encountered (except one – there are exceptions) treated my daughter with great care and love. But, in a bad system, that's not enough.

Steve Spear, author of the very important Harvard Business Review article “Decoding the DNA of the Toyota Production System,” has spent a great deal of his focus on healthcare. I highly recommend reading his article titled Ambiguity and Workarounds as Contributors to Medical Error, online in PDF.

If you'd like to learn more about the problems in healthcare, there are two books I recommend. I have both, but have only read the first one in depth. It is a good read, but a very frightening one.

Demanding Medical Excellence: Doctors and Accountability in the Information Age 1st Edition

Internal Bleeding: The Truth Behind America's Terrifying Epidemic of Medical Mistakes

Fixing healthcare is a big job and there is no single solution. It will require spot solutions to millions of problems, and everyone has a role, from doctors, nurses, hospital administrators, medical companies, the government, and even patients. An important thing in the war on waste is awareness, so please share this blog or pieces of it with those you believe would be interested.

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Jamie Flinchbaugh
Jamie Flinchbaugh is an accomplished Entrepreneur, Senior Executive, and Board Member with more than 20 years of success spanning finance, manufacturing, automotive, and management consulting. Leveraging extensive operational experience, Jamie is an invaluable asset for a company seeking expert guidance with process improvements, lean strategies, and leadership coaching in order to transform operations, reduce costs, and drive profitability. His areas of expertise include continuous improvement, entrepreneurship, coaching and training, process transformation, business strategy, and organizational design.


  1. I know I’m on “holiday”, but I have some time today.

    I’ve been working in healthcare for a year, so here are my comments on Jamie’s post and the Detroit News article:

    Yes, Michigan is definitely not the first hospital to work on lean by any means. That’s local “invented here” bias (the Detroit paper even overstated Henry Ford’s role in lean… yes, Toyota learned from Ford, but Ford didn’t invent their system).
    Thedacare is another great lean hospital example I’ve written about before.

    Another random comment — It really doesn’t make me feel any better that GM’s lean “experts” are helping them.

    “… I think we treat cars and people the same,” Jamie said. Not to be too harsh, but some hospitals treat people worse than a car factory treats a Camry. A Camry doesn’t sit for two days before moving on to the next step… hospitals often park patients in the ER for two days until they can get into an inpatient room.

    “…primary focus of healthcare is health…” One of the dysfunctions of healthcare is that it’s really sickness care. Everyone in the chain gets paid for treating people, rather than helping them prevent illness. Some even argue that the healthcare world has more incentive to prolong treatment than to “cure” patients. The idea of “value” still isn’t fully agreed on between all of the different customers and players in the system, unfortunately.

    Focusing on patient care and “perfecting” it is great, but lean healthcare is also focused on making life easier for the providers. The News article talks about getting root cause problems fixed. Healthcare is famous for daily workarounds. Lean helps remove waste and frustrations for providers (namely nurses). This allows them to spend more time with patients instead of fighting the same waste battles every day. Lean (done right) also improves staff morale, which creates a better environment for patient care.

    Lean is also good for the organization. Did you see in the News article that U of M hospital only has a 3% profit margin? That’s far worse than Toyota. It’s not a good “business” to be in. I saw a report that 13% of a hospital’s cost comes from avoidable waste. When lean helps cut these costs (although cost isn’t the only factor to focus on), the hospital can invest more in better facilities and better patient care.

    To the idea of “evidence based medicine”, I had a pathologist comment to me “Doctors are the worst scientists around.” Pathologist are, of course, “the doctor’s doctor” and they hold themselves in high regard compared to “regular” doctors. But watch an episode of “House” – the characters there appear to be pretty much guessing about what a patient might have. It’s not an exact science.

    Another great book is “Wall of Silence” about medical errors and ways to fight them. Lean is certainly one solution. Another good book for healthcare background info is “Complications: A Surgeon’s Notes on an Imperfect Science.”

    Be careful out there, as a patient. The good news is that there are many good lean people trying to help fix this and many good medical professionals who are trying to learn. There are a lot of problems in medicine, but “lack of caring” certainly isn’t one of them. People know the system is broken, it’s a matter of deciding on how to fix it.


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