Quotes from the Paul O’Neill Podcast Interview on Patient Safety


Today, I released Podcast #124, an interview with former Alcoa CEO and Treasury Secretary Paul O'Neill on patient safety and leadership. You can listen to the audio here.

For this special podcast, I wanted to share some transcripts and quotes from what O'Neill had to say, as it's interesting, insightful, provocative, and sometimes controversial.

In summary, O'Neill talks about:

  • Leadership mindsets required for dramatic workplace safety and patient safety improvement, including a near 100% reduction in hospital-acquired infections at Pittsburgh's Allegheny General Hospital
  • Why the United States has accomplished “practically nothing” nationally since the famed 1999 Institute of Medicine report “To Err Is Human”
  • Why society's most lacking skill is “leadership”
  • Alternative ways of compensating patients who are harmed by the healthcare system while ensuring real improvements are made by learning from each problem
  • Why Rep. Paul Ryan (R-WI) needs to shift his focus from “financial engineering” to visiting ThedaCare to learn about “the real way” we should improve health care.

In the podcast, O'Neill was first asked about the workplace safety improvements that took place during his CEO tenure at Alcoa. When this idea of safety improvement was initiated, Alcoa was already in the top 1/3 of U.S. companies for avoiding injuries and their injury rates (as found on the Alcoa health & safety website) are now 30x lower than hospitals, says O'Neill. O'Neill argues this 30x improvement can be achieved in healthcare organizations, but it requires the right leadership and the articulation of goals at the “theoretical limit” (zero harm and zero injuries).

O'Neill then talks about Dr. Richard Shannon, now at the University of Pennsylvania, and how he got interested in this “theoretical limits” approach to improvement from an Alcoa University course that he attended. O'Neill recounts how Dr. Shannon had 39 patients who got infections in 3 ICUs in the 12-month period before the course, with 19 of those patients dying.

Allegheny General Hospital started their infection prevention efforts using these principles:

  • get people involved
  • get them observing how the care is done
  • come to agreement with all about how they would do the work
  • do it the same way everyday,

With this approach, if there was an infection, they could more easily understand why that happened.

Over 18 months, they worked in this, and then started measuring for a 12 period. They had 100 more patients than the comparable 12 months, but just 1 infection (not 39) and nobody died. O'Neill said, “Dr. Shannon's experiences were very consistent with my own at Alcoa, that when we got people to practice good ideas and to learn from every instance of anything going wrong, that the process (whatever it was) got better and better and better. And so, even today, Alcoa has maintained the safety culture.”

O'Neill said, “Since 1999, when the Institute of Medicine's famous study was published, called “To Err Is Human,” we've accomplished, on a national basis, practically nothing in terms of reducing things gone wrong in the delivery of health and medical care.”

After mentioning some of the success stories (UPenn, ThedaCare, Virginia Mason), O'Neill continued, “The tragedy is, as straightforward as these ideas are, leadership in health and medical care institutions around the country have not grabbed these ideas and implemented them, which is, frankly, unbelievable when it's so clear that the benefits are not only to significantly better outcomes for health and medical care, but significant cost reductions at the same time.”

The rest of story is best told in O'Neill's own words, edited in some instances for clarity:

“So, I believe, having observed the practice of care giving around the country, in a lot of different venues, that if we can get these ideas practiced every day in every care giving institution in the U.S., we could have an enormous improvement in the outcomes for patients and we could save $1 trillion a year out of the $2.7 trillion we're spending on health and medical care. And that would be unbelievably positive for our society.”

What is getting in the way these ideas and results spreading more quickly?

“I honestly think the skill shortage in our society, maybe in the world of civilized people, is real leadership. There are a whole lot of people who I suppose are leaders by designation, but I don't honestly know a lot of people who are leaders in the sense that they will articulate goals at what I call the theoretical limit and then help their people to acquire and practice the skills that are necessary to what I call habitual excellence. It's really hard to find leaders who understand the concept of habitual excellence, which means a leader should expect every aspect of his organization to perform at the known level of possibility. Having that kind of leadership and a leadership that is not about punishing or blaming people, but about using every single instance of anything gone wrong as a basis for organizational learning is really critical to this. There are a lot of people working on pieces of these ideas but, unfortunately, there isn't a national movement yet. Hopefully, soon there will be.”

On alternatives to the existing medical malpractice system:

“There are several pushbacks to the idea of habitual excellence. One is to say “well, we can never be perfect and we don't want to set goals we can't achieve.” I found in my own early days at Alcoa when people told me that about workplace safety, then I said to them, ‘OK, if you don't want to have a goal of zero, then let's go around and find out who wants to volunteer to be hurt to make sure we reach our goal of somebody being hurt. And it's so ridiculous on its face, it's equivalent to people saying, “Oh, there's no way we can eliminate all of the infections in the hospital,” – it's a lie. It is simply not true. To aspire to less [improvement] than [reaching] zero is to excuse every single one that happens rather than learning from them and figuring out a way to introduce practices that take away the possibility [of infections].”

“In the secondary case of medical malpractice, they say ‘Oh my God, if we start reporting things gone wrong, we're creating a roadmap for the lawyers to come and attack us with our own information. So, I believe there is a legitimate answer to that and it rests in this observation: if you go around the country and you try to find people who are malevolent malefactors who are intentionally hurting people, I would submit to you that, except for criminally insane people, you can't find any examples of that. You find that people do get hurt in the practice of medicine in the United States… the answer is yes.

So, we need to combine that observation that people do get hurt with the idea that the way to avoid people getting hurt by the same set of circumstances over and over again is to learn from everything gone wrong. In order to do that, we need to have a transparent system where everything gone wrong is observed, documented, and shared on a real-time basis in every day in every healthcare giving institution.

In order to take away the excuse that they can't have transparency because of the threat of lawsuits, we should abandon (it was already a bad notion of medical malpractice), and in its place create a system where when an individual is injured as a consequence of a medical intervention, we simply turn the case over to a board of experts to judge the economic loss associated with the injury, and award that individual that economic loss without any lawyers involved and without any trying to hide the fact that an individual was injured so that we can insist on transparency and there won't be an economic cost associated to the individual events. I believe that this is sufficiently worthy that we ought to pay for it out of the general federal revenue stream of the federal government.

I would be willing to accept a step back from that with the medical care system producing the standby fund to service the economic cost of things gone wrong. I honestly believe, in a fairly short period of time, the costs would be sufficient that it wouldn't matter.

I've been advocating to the government that they should implement a system where every care giving institution in the nation is required to hook up to the internet at 8 o'clock in the morning local time, wherever you are, and report on the internet every instance of a newly identified patient acquired infection, every case of a patient fall, and every case of a medication error. And I think the availability of that data   – first of all, it would be shocking to the people and secondly, I think it would spur action to bring those numbers down quickly. It would cause the caregiving institutions to put their shoulder to the wheel of continuous learning and continuous improvement and we would stop this madness.”

“One hope that I'd have is that the Congressman from [John Toussaint and ThedaCare's] state who has become fairly famous for advocating financial medicine for health and medical care would go to ThedaCare, which exists in his own state, and see the real way we should deal with health and medical care instead of the financial engineering Paul Ryan is advocating these days in Washington.”

How others can help create and inspire the right kind of leadership to improve patient safety?

“I would urge Boards of Directors of health and medical care institutions, hospitals, and nursing homes to ensure the day-to-day operational leader is supportive of the idea of establishing theoretical limit goals for everything that goes on in their institutions. Because I think if Boards of Directors urge the people who are day-to-day responsible for care delivery, it might provide some stiffening of the backbone of those who are supposed to lead institutions to habitual excellence.”


I'd like to thank Mr. O'Neill for appearing on the Podcast and thanks are also due to my friends at the Healthcare Value Network and Value Capture for helping make this happen.

What do you think? Scroll down to comment or share your thoughts and the post on social media. Don't want to miss a post or podcast? Subscribe to get notified about posts via email daily or weekly.

Get New Posts Sent To You

Select list(s):
  1. […] For a link to this episode, refer people to  www.leanblog.org/124. You can also read quotes from the podcast in this blog post. […]

  2. Pascal Dennis says

    Fine interview, Mark — thanks.

    Mr. O’Neill’s insights are an inspiration.

    Safety, is indeed the “window on the process”. If you can manage safety well — everything else follows. Safety was our leading indicator at Toyota Motor Manufacturing Canada. We knew improvement here mean Quality, Delivery & Cost improvements weren’t far behind.

    It’s odd that health care leadership, faced with crippling Safety, as well as, QDC liabilities continues to ignore the evidence of Alcoa, Dupont, Thedacare, Allegheny General and other trail-blazers.

    Is it a “weakness in the backbone”, as Mr. O’Neill suggests?

    Is it a disconnect from the front line — too many days in air-conditioned exec suites?

    Is health care leadership suffering from dysfunctional mental models?

    I can anwer the last question witha strong Yes! — having seen the hiding of problems Mr. O’Neill alludes to. ”

    Problems are garbage — hide them!” appears to be a core mental model. A big problem — you can’t fix what you can’t see (because you’ve hidden it).

    Thanks again Mark.


    PS For more on health care mental models & problem solving check out chapter 13 of my business novel, The Remedy http://www.amazon.com/Remedy-Bringing-Thinking-Transform-Organization/dp/0470556854/ref=sr_1_2?ie=UTF8&qid=1311268288&sr=8-2

    1. Mark Graban says

      Thanks, Pascal. The day after interviewing Mr. O’Neill, I saw a healthcare report that stated:

      “91% of healthcare leaders rank patient safety among their top 5 priorities” – http://t.co/1gfQ8Hq

      Are we supposed to be impressed that 91% considering in a “top 5” issue??

      I got a couple of twitter comments immediately that asked why that number isn’t 100%. I’d question why safety is only a “top 5” issue and not issue #1, as it would be if Mr. O’Neill were CEO of a hospital (employee and patient safety, that is).

      I’ve seen studies from the American College of Healthcare Executives that said that patient safety and quality were a “top concern” of only about 33% of CEOs. They could choose an unlimited # of “top concerns!” 77% chose “financial pressures” as a “top concern.” You can be (and should be!) concerned about both safety AND finances.

      I’ve talked about that survey with many people and the consensus is that CEOs think they have delegated patient safety and quality to lower level leaders or to specialists.

      Mr. O’Neill clearly agrees with Dr. Deming’s view that quality “starts at the top.”

  3. Pascal Dennis says

    Fine insights Mark — thanks.

    If health care CEOs indeed believe they can delegate patient safety, I believe we have a root cause of the health care crisis.

    I know an organization whose beleagered team members have developed a comical “salute” — everybody points at everybody else.

    Now maybe I understand it better. Like everything else, it comes from the top…



    1. Mark Graban says

      I certainly believe in the “quality starts at the top” view, as you do, Pascal.

      I appreciate the stance taken by one healthcare CEO I know who states “everything that happens under this roof is my responsibility” and he means that in the best way, not that he has to do everything. He is responsible for the tone and culture of the organization, as that culture does a lot to drive people’s actions.

      Compare that to Rupert Murdoch, who blames the people who worked for him for this phone hacking scandal, how could he have known, he’s a victim, etc.

      You might not like it, but you ARE responsible for the actions of people who work for you. That’s one reason why you get the big paycheck!

  4. […] Paul O’Neill. I came across his name early and often while I was learning. Mark Graban has a podcast of an interview with Mr. O’Neill and I highly recommend listening to it through the link (on […]

  5. Dean Bliss says

    Good stuff, Mark. I love the Dr. Shannon story – I use it frequently to demonstrate how belief in the possibility of “zero errors” can drive us to do thngs that we may not have thought possible.

  6. […] in my Restoration to Health blog, I recommended my readers listen to Mark Graban’s podcast with former Treasury Secretary and Alcoa President/CEO Paul O’Neill. Mr. O’Neill introduced […]

  7. Andrew Bishop says

    Mark & Pascal: These are fascinating, powerful stories. I have nothing to add concerning the healthcare/safety specific issues, except to thank Pascal, who taught me early on in my lean learning to always look first at ergonomics and safety, whether it’s a gemba walk, a process change, a staff meeting, or whatever. It has made a profound difference in OUR workplace, from the office and greenhouse in Pennsylvania to the fields outside Bogotá. Thanks, from all of us, Pascal.

    At another level completely, underneath the stories, O’neil articulates and illustrates the framework of lean (time into podcast):

    (9:19) “…began working with all the people who were involved in the delivery of care to observe how they were doing the care and to come to agreement… …on how they would do the work, and they would all do it the same way, every day, so that if there was an infection, they could more easily understand what had caused a person to get an infection…”

    (10:42) “…when we got people… …to learn from every instance of anything going wrong, that the process, whatever it was, got better and better and better…”

    (16:42) “…leadership that is not about punishing or blaming people, but about using every single instance of anything gone wrong as a basis for organizational learning…”

    What have we got here?
    -Standards and standard work not as a strait jacket, but as the means to identify abnormal conditions.
    -Using the identification of a deviation from standard as an opportunity for learning and improvement.
    -Engagement of the operators in setting those standards.
    -Leadership’s responsibility as developing people and organizations capable of doing those things.

    I really hope he succeeds in getting policy makers to listen. A trillion dollars sounds like a lot to me, but it is really nothing more than monetization of a whole lot of pain, suffering, frustration and death. Shocking.

  8. Pascal Dennis says

    Fine insights Andrew. (Thanks for your very kind words too)

    Glad to hear Andrew’s workplace has responded to the safety first mental model. I’ve encountered the same effect over and over.

    Safety is indeed our window on the process, as well as, as concrete message to team members: “You’re our most valuable asset. We’re going to keep you safe, we’re not going to lay you off except in the direst of circumstances and as a last resort, and we’re going to teach you stuff that’ll make you even more valuable to us.”

    Who wouldn’t want to work at a place like that?

    Does the health care crisis reflects America’s deeper leadership crisis? The unwillingness of elites to take responsibility for the broader public good? The unwillingness (or inability) of leaders to lead?

    1. Mark Graban says

      Paul O’Neill did say that our most lacking skill (very generally in the country?) is “leadership.”

  9. Mark Graban says

    A Dilbert link posted by Andrew Bishop on another post:

    This one on non-zero safety goals is a favorite of mine – could just as well be posted as a comment on the Paul O’Neill podcast:

    Safety Goals

  10. […] Paul O’Neill Podcast Interview on Patient Safety by Mark Graban – “Allegheny General Hospital started their infection prevention efforts using these principles: get people involved, get them observing how the care is done, come to agreement with all about how they would do the work, do it the same way everyday” […]

  11. […] Books. In Pittsburgh, as part of the PRHI effort, Dr. Shannon learned from Paul O’Neill, read or hear my interview with […]

  12. […] It’s not bad people, it’s bad systems. And, as Paul O’Neill says, a “lack of leadership.” […]

  13. […] modeled much of his organizational leadership and ideas around what he has learned from O’Neil. The following quotation from O’Neil represents his philosophy […]

  14. […] Quotes from the Paul O’Neill Podcast Interview on Patient Safety […]

Leave A Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.