Updating a Vision, Again, for Lean Hospitals (or Lean Health Systems)


Lean Hospitals SmallerBack in 2011, I asked for and received some great input from readers about updating a chapter for the second edition of my book Lean Hospitals on “A Vision for Lean Hospitals.”

A lot has changed in the healthcare environment over four years (as has our understanding of Lean, both generally speaking and in healthcare). So it's a good opportunity to refresh this chapter for 2016 and beyond.

As before, I'm going to re-publish the 2nd edition's chapter below and I'll ask for you to please leave feedback, either as a comment below on this blog post or my leaving a comment in this Google Doc.

Also, if you work for a healthcare organization, please take this short two-question survey about “motivations for Lean.”

A Vision for Lean Hospitals & Health Systems

When Is a Health System Lean?

Using the original definition of Lean from The Machine that Changed the World, is there a hospital anywhere that operates with half of everything, compared to other hospitals? A Lean hospital in those terms would have, among other measures:

  • Half the errors
  • Half the infections
  • Half the patient harm
  • Half the waiting time
  • Half the length of stay
  • Half the employee turnover
  • Half the cost
  • Half the space
  • Half the complaints from patients and physicians

Hospitals might not improve to a Toyota-like point of being literally twice as good as their competitors (that gap has been closed by their competitors over time, anyway). That said, we should set the bar high for our hospital. History has shown that Lean concepts allow breakthrough thinking, leading to dramatically better performance, rather than modest incremental gains, such as the 95% reduction in central-line associated bloodstream infections at Allegheny General Hospitals.[i] ThedaCare and Gundersen Lutheran (WI) have each demonstrated 25% to 30% lower costs for inpatients and cardiac surgery patients.[ii],[iii] Even if we had half the defects or half the patient injuries as another hospital, is that good enough? No, but we have to strive for perfection, even though absolute perfection might seem difficult or impossible.

We might even reach outside the boundaries of the hospitals, looking to improve the larger healthcare system. Lean hospitals might work to reduce emergency department visits by half by better coordinating the entire continuum of care in their communities. Group Health (WA) has reduced emergency visits of its members by 29% through its patient-centered medical home approach, based on Lean principles.[iv] Lean hospitals can also work to prevent readmissions, as did UPMC St. Margaret Hospital (PA), which reduced readmission rates for chronic obstructive pulmonary disease (COPD) by 48%.[v] The impact of payer systems and financial incentives for this is left for your own discussion.

Hospitals are getting results with Lean. The challenge now is to spread those ideas so every hospital can improve. We should learn from the leaders and the example they are setting, adapting their methods to our own hospital. We can also share ideas and collaborate with other hospitals that are learning as they go. An example of this is the Healthcare Value Network, a joint effort of the Lean Enterprise Institute and the ThedaCare Center for Healthcare Value; dozens of organizations from across North America share and learn from each other in a collaborative environment. The Pittsburgh Regional Health Initiative, initially led by Paul O'Neill, is an example of a regional effort; it is hoped it will be duplicated in other regions, states, or countries.

What Would a Lean Health System Look Like?

Having a chance to tour or walk through a hospital that has embraced Lean, you might look for visible Lean methods in use. Visible indicators might include 5S and visual controls, marking and labeling where items are supposed to be stored. You might also see standardized work or kanban cards posted and in use. Suggestions, performance measures, or A3 reports might be displayed on walls. The physical structure and layout might be compact, logical, and neatly organized.

Much of what makes a Lean hospital, however, cannot be directly observed during a tour. Can we directly observe the thought processes and mindsets of the organization? Can we see how people solve problems? Given enough time, we might be able to directly observe supervisors interacting with their employees, but we usually do not get that chance on a tour. Toyota has been very open in letting other manufacturers, even direct competitors, tour their factories. Other companies have typically copied the tools and the visible methods, often coming away not understanding the true nature of the Toyota Production System.[vi]

What Would a Patient Experience in a Lean Health System?

A good exercise might be to think through what the perfect patient care experience would look like and how it would feel. For example, for an outpatient surgery patient, what would be an experience of perfect service and perfect care? This might seem similar to the creation of an ideal state version of a future state value stream map. We can challenge ourselves on how things should work to set goals for our Lean improvements.

The patient would be able to promptly get an appointment or procedure scheduled, with the hospital doing everything it can to minimize delay by increasing capacity and throughput with low-cost process improvements. The hospital provides a clear estimate of total expected cost for the payer and out-of-pocket costs for the patient (if applicable), relying on transparent standard prices for routine procedures.

The patient's Lean experience begins before arrival, which can include presurgical steps such as scheduling and making sure everything is communicated properly (such as the need to arrive for labs or presurgical fasting) to avoid miscommunications, rework, or delays. Think through the patient experience from the time the patient drives up to the hospital. Is everything clearly labeled for where to park and where to come for registration? Is the patient able to get registered without repeating the same information to multiple people? Is the patient able to avoid excessive delays before the procedure starts?

From a clinical and surgical standpoint, does the hospital ensure that all proper preparation and quality steps are followed before the procedure, including confirmation of the patient identity, marking of the site, and the time-out of the universal protocol? How is the process error proofed to protect the patient from harm? Are all of the participants (nurses, physicians, anesthesiologists, etc.) aware of their role, interactions, and standardized work? Is there a team environment in which everyone is focused on the patient instead of hierarchy and titles? Are clinicians following evidence-based practices that are best for the patient?

Beyond the surgery itself, what service is provided to any family or loved ones who are waiting? Are they kept informed of the patient's status to ease their worrying? Is the patient able to get through the postoperative recovery area and discharged without any avoidable delays beyond the required recovery time? Has clear and unambiguous communication been made about the patient's postoperative responsibilities to help in recovery and to prevent infection? Does the patient receive a billing statement that is 100% accurate and easy to comprehend (again, if applicable)?

Whatever vision you create for perfect care, be sure to include both the clinical care and the service aspects of the patient's experience. Starting with fresh eyes and thinking toward perfection will drive better improvements than looking for incremental improvements over today's practices and waste.

What Would It Be Like to Work in a Lean Health System?

Working in a Lean hospital should be a positive experience for employees, leaders, and physicians. After seeing many cases of morale and employee engagement improvement with Lean, employees should not want to leave a Lean hospital to work someplace else. In some cases, work life has become so fundamentally different (and better) that employees who have left to go to a traditional hospital or clinic have come running back, no longer able to (or wanting to) operate in a non-Lean environment and culture.

Many of the key points have already been covered, but employees in a Lean environment should expect, among other things,

To be listened to by supervisors, to have their ideas solicited, to have the freedom to make improvements for the betterment of the system, and to be treated with respect

To develop the discipline to work within a system, but also to maintain the creativity required for kaizen

To not be overburdened with more work than can be done in a high-quality manner or to be standing around with nothing to do

To be challenged to grow, personally and professionally, always striving to learn and improve personal technical, leadership, and problem-solving skills

To feel a sense of pride for contributing to a high-performance organization, for understanding their personal roles and how their work has an impact on patients, coworkers, the hospital's bottom line, and the community

Again, Lean is not a system that is soft on people or an environment where everyone is nice to each other, avoiding conflict. The Lean culture of “respect for people” also demands a sense of responsibility, as true respect challenges employees, and each other, to get better for the sake of the patients and the organization.

Managers and leaders could expect an environment in which the direction and goals from senior leadership are clear and actionable. Managers at all levels would have a voice in shaping the strategy of the hospital, also working with their employees to develop improvement plans to meet these true north goals. Managers could expect that staff members will be open about problems, waste, and near misses, creating an open blame-free environment for improvement.

How Would We Describe a Lean Health System?

To create a vision, we can define in aggregate how to describe a prototype Lean hospital. One good starting point might be for a hospital to follow the general 14 principles of The Toyota Way. A Lean hospital might also be characterized by the following traits: strategy and management system, patients, employees, waste and kaizen, and technology and infrastructure.

Strategy and Management System

A Lean hospital has efforts and goals that are tightly integrated with hospital strategy and vision, moving beyond the isolated use of tools to the engagement of all employees and leaders in the building of a Lean culture. The Lean strategy and the hospital strategy are one and the same, being communicated widely and consistently throughout the organization.

A Lean hospital realizes that success comes not only from technology and clinical excellence, but also through employee engagement and operational excellence. Lean hospitals help stakeholders understand that spending money on new technology and new space is not the only way to demonstrate a commitment to serving the community.

A Lean hospital has a leadership method and model that is taught to supervisors and managers and is practiced by all leaders. Lean behaviors, such as going to the gemba, auditing the process, collaborating on improvement efforts, and being a servant leader, are used as criteria for employee selection, performance reviews, and advancement.

A Lean hospital creates collaborative relationships for all partners and stakeholders, including physicians, vendors, and payers. Patient safety practices and quality data are shared openly with other hospitals and the community, rather than using those methods as a source of competitive advantage.

A Lean hospital has a small, centralized group that maintains consistent Lean practices and training. This group coaches leaders and staff to drive improvements and to own their processes, rather than doing it for them. This central team, along with senior leadership, continually mentors and develops managers in Lean behaviors and management philosophies.

A Lean hospital has specific leaders who are responsible for the overall flow, management, and improvement of key patient care value streams.

A Lean hospital determines proper staffing levels based on patient volumes, actual workloads, and the time required to do work in a safe, high-quality way. Best attempts are made to match staffing to volume in different time periods. Reliance on benchmarking or budget constraints as a primary staffing driver decreases.


A Lean hospital is passionately and meticulously focused on the patients, families, and guests, aiming for perfect, harm-free care, while respecting patients and their time. The patient comes first in all activities, decisions, and priorities. Leadership helps create that expectation with all stakeholders.

A Lean hospital involves patients, as the ultimate customers, and their loved ones in process improvement efforts. New designs and processes are tested to make sure they meet patient needs.

A Lean hospital provides excellent service in addition to the best clinical care. The patient is surrounded by a warm, caring environment in which staff and clinicians have the time to fully attend to their physical and emotional needs.

A Lean hospital sets goals of zero preventable errors that cause patient harm, as any other goal is unacceptable. The staff works tirelessly toward that goal through standardized work, root cause problem solving, and error proofing, rather than relying on individuals to be careful or relying on inspection. When preventable errors occur, patients and payers are not charged for the work required as a result.


A Lean hospital recognizes that employees are the true source of value for patients and the hospital, rather than being viewed strictly as a cost to be reduced. Top leadership makes a consistent commitment to all employees that Lean improvements will not lead to layoffs.

A Lean hospital helps employees understand that not all activity is value added. Rather than defining waste as being “our job,” everybody works to eliminate it so more time can be focused on the patients.

A Lean hospital fully engages every employee in improving the employee's and the team's work, supporting the innate desire to provide perfect care to patients. Leaders help employees understand how their work fits in to the value stream and work collaboratively with them in kaizen. Employees are not sent home every time census drops, as that is seen as an opportunity for kaizen.

A Lean hospital does not overburden employees with more work than can be done in a high-quality manner or pressure people to work harder or be more careful as a means to quality, safety, or efficiency.

Waste and Kaizen

A Lean hospital recognizes that there is waste in every process, focusing on continuous improvement and root cause problem solving instead of workarounds and firefighting. Individuals (employees or leaders) are not blamed for the waste or problems.

A Lean hospital proactively fixes problems and reduces waste, rather than being strictly reactive. Employees are encouraged to expose waste and make improvements to the system, instead of hiding problems and making things look good.

A Lean hospital breaks down departmental silos to focus on improving care and preventing delays for patients, allowing employees to feel pride in their work, by being able to cooperate across value streams instead of suboptimizing their own area.

A Lean hospital values the standardization of work methods in the name of improving safety, quality, and productivity, rather than allowing people to develop their own different methods for doing the same work or precluding one patient to not get the best-identified method of care.

A Lean hospital is never satisfied with being better than average, being in a top percentile, or with winning awards; it always strives to get better. Perfection is a difficult goal to reach, but it is the only acceptable goal to a Lean hospital.

Technology and Infrastructure

A Lean hospital is physically designed to minimize waste for patients and for all who work inside its walls. It is designed with direct input from staff to support efficient workflows and value streams, rather than forcing departments and employees to adjust their work to the space. A Lean hospital focuses more on what is functional and effective for the patients and staff rather than glossing over bad processes with marble entryways and lobby fountains. Lean hospitals use collaborative and iterative design and build practices like integrated project delivery.

A Lean hospital has process technology, automation, and information systems that make work easier or less error prone. The hospital does not install automation or new systems for the sake of having new systems. Employees and physicians are deeply involved in the selection of technologies that meet their needs. A Lean hospital takes the time to properly train all stakeholders in new technologies, ensuring they can be used most effectively rather than blaming individuals for not using the systems.

In 2001, the industry started to say, “We want to see a Toyota in healthcare.”[vii] At that point, there was no clear leader in terms of a hospital that had dramatically different processes or results from the others. Even if some clear leaders in Lean healthcare are becoming widely known, Lean success stories can be found at hundreds of hospitals around the world. It is more likely that, over time, a top tier of hospitals will emerge, hospitals with results that are much better than the industry as a whole. Lean advocates would assume that many in this top tier will be the ones who are most effectively using Lean principles. This top tier will continue to learn from each other, improving continually. The hospitals outside that top tier will likely fall further and further behind–some will likely be forced to close. We all have the opportunity to aim high, working hard every day to reduce waste, respect our people, and provide better and better care for our patients, through Lean methods.

Notes & References

[i] The Commonwealth Fund, “Case Study: Perfecting Patient Care at Allegheny General Hospital and the Pittsburgh Regional Healthcare Initiative,” September 30, 2008,  (accessed July 1, 2011).

[ii] Toussaint, John, “Writing the New Playbook for U.S. Health Care: Lessons from Wisconsin,” Health Affairs, September 2009, 28, no. 5: 1343-50.

[iii] Boulton, Guy, “Integrated Systems Hold Down Costs while Keeping Up Quality,” Milwaukee Journal-Sentinel, September 12, 2009,  (accessed March 26, 2015).

[iv] Reid, Robert J., Katie Coleman, E. A. Johnson, et al., “The Group Health Medical Home at Year Two: Cost Savings, Higher Patient Satisfaction, and Less Burnout for Providers,” Health Affairs, May 2010, 29, no. 5: 835-43.

[v] California Health Advocates, “Creative Interventions Reduce Hospital Readmissions for Medicare Beneficiaries,” October 7, 2010,  (accessed March 26, 2015).

[vi] Taylor, Alex, “How Toyota Defies Gravity,” Fortune, December 8, 1997,  (accessed April 3, 2015).

[vii] Appleby, Julie, “Care Providers Slam Health System,” USA Today, May 9, 2001, p. A01.

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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. Well done as stated. One thing I personally would add under the management system is leaders need to have a mastery of problem solving. As I have attempted to deconstruct the Toyota Production System it occurred to me that most every element of TPS came about via a need to solve a real problem going all the way back to studying Henry Ford and site visits to the US, and even before that with the broken thread detection on the textile looms. If deconstructed further, we might find that there are cultural, societal, or familial reasons for this early mastery of problem solving but at least for now we can emphasize and copy (to a degree and not saying it is easy) how Toyota solves problems. I think this is especially important in healthcare considering the lack of a standard model for transformation.

    • Great addition, Bart. It’s hard for leaders to coach staff on problem solving or to develop a culture of continuous improvement without being somewhat expert at problem solving and Kaizen.

      One advantage Toyota has is leaders mostly being brought up through the ranks. They live this and learn this and they have capable sensei.

      In many hospitals, the senior leaders often have decades of accumulated bad habits… jumping to solutions, blaming, not looking for root causes, not confirming the effectiveness of countermeasures…

      I hope organizations like ThedaCare and Virginia Mason are building these capabilities really well at the top. Not that the CEO has to solve every problem (far from it) but are Dean Gruner and Gary Kaplan masters of problem solving? Can they coach others effectively down the chain?


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