What is Group Health Doing about Waste in Healthcare? A Lot!


2008 Annual Report: Reducing Waste

I had a great visit with Group Health in Seattle on Monday, they are doing some great work with Lean in improving primary care and their insurance office operations. You might remember my podcast (from 2007) with three of their Lean leaders. I was finally able to meet Lee Fried of the Daily Kaizen blog, as well.

I got a copy of their annual report, available online, that has some great discussion, including about “waste” in healthcare.

The question posed on the report is: “We hear there's lots of costly waste in health care. What is Group Health doing about that?”

How many health organizations are talking about Lean in their annual report??

Click on the link at the top of the post or here to read. Some excerpts include:

Michael Soman, MD: We define waste as anything that does not add value in the eyes of the patient. Waste is everywhere. You'll find it in every health care organization. But Group Health is reducing waste in organized, relentless ways — supported by our new management system. Each component of our management system is based on the Lean principles of continuous improvement, quality, respect for people, putting the customer first, and adding value by eliminating waste. It's becoming our everyday routine, not just a one-time initiative.

I certainly saw evidence of that first hand. There's lots of continuous improvement and a lot of reinvention of processes. INNOVATION through Lean — radical process redesign. So to those who argue Lean stifles innovation, I say (respectfully) – HA!

Dr. Soman wrote that not only did Group Health reduce waiting time for phone calls, but they also improved quality. Flow/speed/cost go hand in hand with quality in a Lean approach.

Plus, first-time resolution of a problem — meaning you made one call and you got your question answered — was about 1 in 10. Today, first-call resolution occurs in nearly 8 out of 10 calls.

James Hereford, a Senior VP who was on the Podcast call, adds:

Traditional health care often relies on heroic individuals to somehow make a fragmented nonsystem work — instead of having a thoughtfully designed system that makes it easy for doctors, nurses, and other clinicians to provide care. Clinicians shouldn't have to be heroic. The system should remove inefficiencies and unwarranted variation. Allowing highly trained people to work with less waste in more supportive environments will improve quality and reduce costs. That's our long-term commitment and strategy using Lean principles. Over the next five years, we'll make significant gains in efficiency and quality that will really drive a better price point in the marketplace.

Dr. Brenda Bruns talked about something I saw first hand — the “Medical Home” method that takes an integrated, proactive view of patient health (click here for a Commonwealth Fund report).

Keeping you healthy reduces costly waste. Our doctors now call patients who haven't been in for preventive check-ups and get them to come in. That's just not happening elsewhere.

To me, that sounds like finding ways of adding more value to the patient, as customer, not just eliminating waste. Impressive. Patients are allowed to get lab results online (I waited a week and left many voice mails with my doctor last time I needed such information) and they can eliminate the need to make office visits by emailing the doctor if you just have a simple question. Very impressive – and improvement enabled by technology, of course.

Link to the full annual report that also includes sections on topics including:

Focus On Quality OK, Group Health is working to reduce costs. But how is it possible to do that without affecting quality?

The answer is probably worthy of a whole other blog post. Great stuff.

Group Health Cooperative is a member in the Healthcare Value Network, a partnership between LEI and the ThedaCare Center for Healthcare Value.

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Mark Graban
Mark Graban is an internationally-recognized consultant, author, and professional speaker, and podcaster with experience in healthcare, manufacturing, and startups. Mark's new book is The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation. He is also the author of Measures of Success: React Less, Lead Better, Improve More, the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, and the anthology Practicing Lean. Mark is also a Senior Advisor to the technology company KaiNexus.


  1. Mark:

    The really wonderful thing about this posting is the way it obliterates the underlying logic of the "we're different" resonse from health care (or any other category).

    Thanks for the great blog. As usual, I find myself wondering how we get people's attention as we struggle with the cost of healthcare in the U.S… Your work is one of the ways.


  2. Hi Mark,

    Thanks so much for the recognition and coming to our gemba. We are working hard to make things better every day and it always nice to have a fresh set of eyes confirm that in general, we are on the right track.

    Look forward to seeing you soon.

    Lee Fried

  3. Thanks for this insight in Lean Healthcare and how to reduce waste! I am a Norwegian Lean enthusiast and lately I have tried to find some ways to compare the state of the Norwegian Healthcare system to other systems. Two days ago the leading Norwegian Newspaper Aftenposten published an article that among other things focused on the accellerating expences in healthcare. It seems that we are heading in the wrong direction as the number of NEW administrative empoyees (10417) by fare exceeds the number of new medical ones (8729)!

    Do you know any surveys or research that estimates the administrative vs medical ratio in different hospitals or other healtcare systems?

    BR Geir Amsjø


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