2015 Lean Healthcare Transformation Summit Notes & Highlights (#HCSummit15)


Wednesday was the first day of the 6th annual Lean Healthcare Transformation Summit, being held this year in Addison (Dallas), Texas. I'm here and this year my colleagues Dr. Greg Jacobson and Jeff Roussel from KaiNexus are attending, so please say hi if you are here.

Tuesday, I taught a workshop on daily continuous improvement (Kaizen) and I'll be moderating the CEO panel on Thursday. Follow hashtag #HCsummit15 for highlights along the way or see just my tweets from the Summit.

This post will be updated through Day 1 and Day 2.

Check out my posts about past Summits.

You can also read my preview of the Summit via the KaiNexus blog.


I'll posting some highlights from Day 1 keynotes here on this post as the day progresses.

Dr. John Toussaint

John shared his experiences and research from a number of hospitals that are relatively far along in their “Lean journey.”


I asked a question… if “budgeting sucks,” does he agreed that “annual performance appraisals” also “suck” and are harmful and waste time…

Beth Daley Ullem

Beth shared her story of her newborn son dying due to a preventable medical error in 2003… lack of compliance with fetal monitoring standards led to brain damage and death. Failure to detect uterine rupture caused four other deaths in that hospital over a short period of time. $40M in lawsuits paid out… “this could be any hospital,” she says.


She was also told, “Well now you have a little angel in heaven.” That wasn't reassuring. That's not what she wanted.

Beth was able to get pregnant again, but her baby required heart surgery. A hospital can do amazing things with procedures like this, but then nearly blew it with multiple preventable errors.


Beth now works with boards — see her website. She also shared stories from the Solutions for Patient Safety Network.

Michael Erikson

Michael is COO of the Palo Alto Medical Foundation, a medical practice in Silicon Valley.

Title: “Reimagining, Realigning, Restructuring Your Organization to Bring Greater Value to Your Patients.”

PAMF is a high-growth organization, adding a lot of patients. Lean journey started in 2010.

The foundation of their “Lean house” = “Our people — daily engagement system”

Three primary paths to unlocking value”

  1. Eliminate waste
  2. Integrate across the supply chain (optimize e the flow of materials & information)
  3. Reconfigure to create new value (create new capabilities)

With all of the consolidations… “is bigger better? We'll see.”

There's lots of disruption and opportunity – new competitors, including Walgreens, Minute Clinic, etc.

New technologies and telemedicine will help make that happen.

“If your leaders are not in the gemba at least once a week, go back to the basics and figure out what's in their way.”

“This is indeed a heavy lift in change management” (“realigning an organization is disruptive”).

“Daily engagement system” is their translation of a “daily management system”

  1. Linked checking
  2. Showing people how to make improvements that matter
  3. Leaders are able to round and ask questions: 1) What's the gap between expected and actual? 2) What are you doing to improve?

Day 2 – Doug McKeever

Doug is speaking from the payer perspective. He is Chief of the Health Policy Research Division at the California Public Employees' Retirement System (CalPERS).

They spend $8 BILLION a year on health benefits for their 1.4 million members each year. They're the second largest purchaser of healthcare in the U.S., after the federal government. They have many initiatives around “influencing healthcare delivery, improving health outcomes, and delivering sustainable programs.”


2-4% of their dependents, when they first did an audit to verify eligibility, were NOT really eligible. They saved $100 million by getting ineligible dependents off of their plan.

Value Based Purchasing = “Reference Based Pricing” in their terminology.

They discovered that, for elective knee replacement — hospital costs varied from $15,000 to $110,000 “with no difference in quality or outcome.” And they were paying $55 million a year on that. They established a payment threshold of $30,000. Promoting access to higher value providers, treatments, and services to reduce costs while maintaining quality.

If somebody wanted to choose a hospital with a $60,000 price, the member would have to pay $30,000 – the amount above and beyond the reference price. They had to do a lot of outreach to let members know about the price variation, to make sure people had the info to choose a reference price hospital.

“We're not going to send our members to a facility that's going to give them poor care. That's not going to happen.” “Please do not leave quality out of the equation.”

The program saved $5.5M over two years and it sent a message to the provider community that they're keeping an eye on costs. Lower general complication rates and lower 30-day general infection rates. Similar follow-up admission rates. They are still surveying patients on the patient experience.

CEO Panel

I'm thrilled to host the CEO panel, which includes short one-on-one chats with each of the three panelists, and then a group Q&A session.





Jim Womack

Title of his talk: “Moving Forward with Mended Management”

Jim asked his doctor, “Where are your outcomes data?” The reply was, “What? I'm a Harvard-trained doctor”

Tweet of the Day

From the workshop I taught Tuesday…


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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.



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