Quick Hits: #Lean Healthcare Done Right, Mergers Done Wrong?

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As the year winds down, posts will be a little more sporadic than usual.

Here are a few “quick hits” – similar to my “clearing the backlog” posts, quick quotes and links to articles you might find interesting. Unlike the “backlog,” some of these stories I'm linking to are relatively fresh.

“Lean Done Right” is Right, but Rare?

In this article by Dr. Gene Lindsey, a former healthcare CEO, he says:

“Being Lean” is much rarer than”doing Lean.” There are many steps along the way from the initial introduction of Lean into an enterprise to the day when Lean becomes its operating system and the foundation of its new culture. Good organizational intentions without effective supports can be frustrating. Just exhorting individuals to work harder to meet organizational goals leads to managerial frustration and frontline burnout and cynicism.

Dr. Lindsey has learned some lessons from Dr. Deming about exhortations not being a good path to improvement. “Substitute leadership,” as Deming would have said. 'Being #Lean' is much rarer than 'doing Lean.' - Dr. Gene Lindsey Click To Tweet

He writes about “Lean done right” and the positive impact it has:

“My heart skipped a beat when I heard the nurse leader for transformation say that their goal was a “cultural” transformation that would enable them to fulfill their mission of better serving their community.”

Yes, that's how it should be. Is your health system helping clinicians fulfill their purpose? Or are you just cutting costs?

Eliminating Waste and Duplication, Except the Redundant CEOs

There were a couple of big mergers announced last week.

Modern Healthcare reports: Dignity and CHI sign definitive agreement to merge,” creating “the nation's largest not-for-profit hospital system by operating revenue.”

“CHI CEO Kevin Lofton and Dignity CEO Lloyd Dean will serve as co-CEOs, each with specific and independent responsibilities and decision-making authority.”

That reminds me of the football cliché: “If you have two quarterbacks, you have no quarterback.”

“We are looking at using our combined scale…” they say… except for “combining scale” at the CEO level. Hmmm.

“The combined entity could spread costs over a bigger platform.” Except for, the whole two CEOs thing.

“Still, the CHI-Dignity tie-up could help accelerate CHI's financial turnaround, analysts said.” Except for the impact of two CEO salaries.

I assume they are not sharing a compensation package.

“More systems have been taking the co-CEO approach” — yes I was stunned to see two stories about this on the same day.

This is an editorial instead of a news story: “The one thing wrong with the Advocate-Aurora merger: Two CEOs

Joe Cahill writes:

“That's two big salaries for one job–together they were paid $11.5 million in 2015, according to the most recent compensation data available. That's two big egos accustomed to calling the shots. That's two separate headquarters operations, one in Advocate's home base of Downers Grove and another in Aurora's Milwaukee home. And, inevitably, that's two camps of loyalists eyeing each other warily across a chasm of mistrust.”

Ah, synergies.

“Dual-CEO structures engender complexity, confusion and unnecessary expense, problems Advocate and Aurora don't need as they try to meld two large hospital chains while adapting to cost pressures and other changes in a turbulent industry. Despite promising that the merger will yield “greater efficiencies,” they'll be spending twice as much as they need to on the most expensive job at the company, as well as on their entourages. “You're going to pay two CEOs? How does that fit with becoming a lean, mean health care delivery organization?” asks professor Erik Gordon of the University of Michigan's Ross School of Business.”

Except Prof. Gordon probably doesn't mean the “Lean” methodology. He's just using “lean” in everyday language. Yeah, I wish they hadn't called it “Lean” back in the day. 'You're going to pay two CEOs? How does that fit with becoming a #lean, mean health care delivery organization?' Click To Tweet

What the CVS-Aetna Deal Means for the Delivery of U.S. Health Care

In this piece, Dr. John Toussaint writes about another mega merger than creates, perhaps, something different instead of just bigger.

He says, in part:

“We know traditional care in the United States is too expensive. The cost structures of hospitals are a big part of the problem. Therefore, we are seeing disruption in the hospital industry. Several trends should be disturbing to hospital administrators, including the development of free standing, low-cost “neighborhood” hospitals.”

Will hospitals find new ways to compete? Will they find ways to reinvent care, or will they just merge and continuously improve? Or just merge?

Toussaint writes:

“These necessary changes won't happen unless the leaders of care-delivery systems change themselves. Moving from command-and-control leadership behaviors to  improvement leadership  behaviors will be required. I've met many health care leaders who believe change is great as long as “I don't have to.” They may be frogs in a boiling pot.”

It also makes me think of Dr. Deming's famous line:

“It is not necessary to change. Survival is not mandatory.”

But, as I wrote here, don't use that quote as a way of forcing people to adopt your changes:

Don't Threaten People with This Famous Dr. Deming Quote

Check out this webinar that Dr. Toussaint recently did, with Paul Pejsa, for me and KaiNexus.

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Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. His latest book is Measures of Success: React Less, Lead Better, Improve More. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. He also published the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus.

2 Comments
  1. Erik Gordon says

    You are correct. Prof. Gordon used the word “lean” in one of its original meanings: without much fat.

    1. Mark Graban says

      Thanks. Having two CEOs with CEO paychecks sounds like “much fat” indeed.

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