Rachelle Schultz, CEO of Winona Health – Driving Lean in Her Health System

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My guest for episode #164 of the Lean Blog Interviews Podcast is Rachelle Schultz, CEO of Winona Health (based in Winona, Minnesota). Rachelle was a part of the CEO panel that I moderated at last year's Lean Healthcare Transformation Summit and her comments on leading a health system's Lean transformation were well received. In this discussion, she says, “Everything I do has to drive Lean,” as we talk about how her system is using Lean in these challenging times and what the impact has been – quality, satisfaction, financial.

This episode is produced in partnership with the Healthcare Value Network.

For a link to this episode, refer people to www.leanblog.org/164.

Learn more about the Healthcare Value Network, Catalysis, and their annual Lean Healthcare Transformation Summit.

For earlier episodes, visit the main Podcast page, which includes information on how to subscribe via RSS or via Apple Podcasts.

Transcript:

Mark Graban: Hi. Welcome to episode 164 of the podcast for February 1, 2013. This is Mark Graban. My guest today for this episode is Rachelle Schultz. She is the CEO of Winona Health in Minnesota. Rachelle was part of the CEO panel that I moderated at last year's Lean Healthcare Transformation Summit, and her comments on leading a health system's Lean transformation were very well received, so happy to have her on the podcast today.

In this discussion, she says, in part, “Everything I do has to drive Lean.” We're going to talk about how her system is using Lean in these difficult and challenging times and what the impact has been on quality, patient satisfaction, financial measures, and other things. This episode is produced in partnership with the Healthcare Value Network. For links about the network, about the Transformation Summit in June, you can go to leanblog.org/164. Rachelle, thanks so much for being part of the podcast today.

Rachelle Schultz: I'm pleased to be talking with you today, Mark.

Mark: Thanks. I was wondering if you can start off by introducing yourself and a little bit about Winona Health.

Rachelle: Sure. My name is Rachelle Schultz, and I'm the CEO at Winona Health. We're located in southeast Minnesota, right on the Mississippi River. Winona Health – we would define ourselves as a primary-care organization, birth through end-of-life. We have a hospital. We have ambulatory clinics, senior services, which includes our long-term care, assisted living, home care, hospice. We provide surgical and specialty care, of course emergency departments, and urgent-care services. We're a full spectrum, across the primary-care continuum. Our community is about a 30,000 population. About 30, 40 miles either side of us, we have our tertiary referral centers, one in Rochester, and then over in La Crosse as well, there's two over there. We're one of the fading types of organizations in that we are still today an independent hospital system or health-care system in a rural community. It's something we hold on to a lot as part of who we are and how we can serve our community, but it is something that seems to be being challenged a lot by our current environment.

Mark: You're independent but a fairly integrated system, it sounds like.

Rachelle: We are integrated with the services that we have, across the continuum. Part of our system, the clinics, the hospital, the senior services and so forth — all the physicians are employed here, for example – as a community health system, we're really integrated that way. We still, as a community system, are independent of those large health-care systems, if you will.

Mark: Transitioning, we're going to talk a little bit about the current health-care environment, with health reform and the pressures that health care is under. Curious to hear how you're using Lean to help improve your operations, improve carrier providing, coping with that challenging environment. Are there other particular opportunities being integrated at the hospital, primary care? How does that all work together?

Rachelle: From my perspective, we started our Lean journey really formally about four years ago, and we dabbled in a few things a couple of years before that. We really started this work intensely four years ago. From my perspective, it was really around the key strategy that goes to our long-term survival. I felt as though, as we really learned more about this, if we operated using these principles, if we really understood this, we could really weather many of the things coming our direction. Today I still believe that. I actually probably believe that more strongly even now as opposed to then. I think that there are so many things coming down the pike that are yet to be defined. Our imperative is really around making sure we're very efficient around our systems and practices and doing it, actually, going forward, from a patient perspective as opposed to the regulatory environment, or are often designed around providers, for example. It flipped a lot of that for us. We really have to look at the true continuum on how a patient moves through a clinic to a hospital stage to going home and how then they're managed in the home. Actually, I think a lot of the dialog nationally is around that kind of a model. I think that's the direction we're working in. Lean is the context, I guess, in which we are defining how that work needs to happen, how those systems or processes need to be redesigned. I think it lends itself pretty critically to our long-term viability and sustainability as an organization.

Mark: For a lot of organizations out there — you used the word “survival” — do you think it may really come down to that for community hospitals in other parts of the country that aren't being as aggressive with process improvement and other methodologies like Lean?

Rachelle: I do. I think that many organizations, smaller institutions, like ours, for example, you see a lot of mergers and acquisitions, lots of them coming together thinking bigger is better, and if we do that, somehow we're buffering ourselves from what might be coming down the pike. I think, fundamentally, what we're missing as an industry is the need to go back and really do this redesign work and really understand what the principles are around that and really tackle what have been very difficult issues. Whether they're internal political issues or medical-staff issues or whatever they are, I think, if we stay focused on what we need to do to help patients be well and be healthy and solve disease problems and things like that, if we really design our systems along that, I think we can make a lot of progress. I think there still remains a lot of reticence to do that. I see that in our organization on any given day. It's a resistance to change. This has worked for us. At a time, it did work for us, but it doesn't work for us anymore. I think we're needing to embrace the need to make those kinds of changes, which really impact everything we do and how we think about just about everything we do. I don't think we've gotten over that hump. I think it's more, a lot of the advocacy, if you will, that's out there is really more about protecting what we have than changing to meet what the future demands are.

Mark: You bring up a good point. You're right, there's a lot of consolidation and merger and acquisition. A lot of times people think bigger is better. Sometimes bigger just leads to bigger. If we can focus on the better, through process improvement, improved care, it'll be interesting to see how that plays out. Sounds like you plan on staying independent and going the “better is better” route, not the “bigger is better” route.

Rachelle: Exactly. I think that's a fallacy that so many have. I do think that for smaller institutions, there's a sense of “We don't have the resources, and so we can't do this,” and so then they join up. I mean, it's just the logical steps. We join up then with a larger organization, and they'll make the changes or they'll help us or they'll give us the resources. I go back to ground zero, which is, they don't have those same capabilities to make these changes. Nothing changed, other than you became part of a bigger system, but the problems still remain, and you still have to make those changes. I guess I fundamentally feel that it's like the principles of empowering your staff and getting things to the lowest level of where the work is done. By trying to delegate it up, it's moving it the wrong direction, and I think we still have to solve our own problems. That's the beauty of — I think what I like about our independence and our community health system is our Lean work has made everything so transparent. We see the brokenness of the system every day. There are thousands of problems to work on. Our challenge is to pick the right ones that move us in the right direction.

Mark: Looking at the context of all of the Lean improvement work that's been going on, how do you, as the CEO, gauge or measure the impact of that Lean work on the long-term strength of the organization? How do you look at that and evaluate that?

Rachelle: There are a couple things. One is just our results. When we look at it at a macro level, it's our quality results, our satisfaction results, our financial results. Those are all in the right direction, or we've achieved pretty high levels there, and we need to sustain that and continue to look at how we improve some things. More things are always coming down the pike in those buckets, and so we have to always back that into different processes and systems. Probably a broader way that I look at that is, what is the engagement level that I have across the organization of the staff and the physicians towards this work? We're fairly — to use the term Lean — Lean, managerially, so there's very few levels between me, for example, and all the staff. How we utilize our people, which is our biggest resource here, and leverage that is critical to the success of Lean. Health care is still a people-dominant type of industry. There is electronics system and all of that, and we leverage those and we need to use them, but how we use it and leverage our people. When I look at engagement and thinking, “I've got 1,200 employees here,” if I have 1,200 employees, even 1,000 employees, moving the right direction, and in the same direction, that's a lot more powerful than having them scramble all around doing different kinds of things. That, for me, is a measure of just the consistency and then looking at our strategies getting implemented the right way, how much and how much time it takes for that, and then are we actually hitting our targets as far as that goes. It really becomes the measures of the organization. The first couple of years of our work was really around learning Lean and learning how to do it and practicing things. We really had an activity-based Lean experience, if you will, in the first couple of years, but it served us well. We've now transitioned into moving from activities to results. While we've had results, now we're really driving the results in a more powerful way, because we spent that time getting everybody up to speed on the principles, the processes, the tools, the understanding, the teamwork, all of those kinds of things.

Mark: One group, and we chatted a little bit before we started the podcast about engaging physicians. This is a really common question. People talk about engaging physicians, getting physicians involved in the Lean process. Can you share some of your experiences and thoughts, working with them in particular?

Rachelle: We've had a really good experience in terms of getting them engaged. They're critical to the engagement, because when we're focusing on the patients and so forth, this is really doctor-slowing work. Of course, when we start using words like “standards” and things like this, that can make them a little uncomfortable, although, again, as we've gotten a couple of years into it and they see the results of the work that they've been doing, it's just like there's a tipping point, when they just automatically go to “We need a standard around this. We need everybody doing this the same way.” It's helped us drive so much more. Again, our physicians here are employed, and so we can take them off-line and put them in a team for a couple of days or something like that to help with that work. I think organizations have different setups or different challenges — they may be employed, they may not be employed. I just think that that's an investment of critical time, resource, and knowledge that you need, and the buy-in, because if you don't have that, the work that you do goes to naught anyway, often, because the physicians don't understand why you're actually making those changes. It's their work, no different than any other staff. I think we've tried to pick really important work — by way of example, meaningful use, which everybody needs to do, every hospital needs to put in place. We took some really difficult issues — things like problem lists and medication reconciliation and documentation — and rolled that into our meaningful-use work, which was all designed using our Lean processes and tools, and physicians on-board driving all of that. You just start seeing the really good results, and they all understand why they're having to do that. You start doing it the same way. It's not the clinical care they're providing. It's the documentation of everything, which is just a burden for all the doctors anyway, and how we can make that better and easier. Again, when they see the results of all of that, it's like, “Let's do more of this because that makes it easier for us.”

Mark: That sounds like a perfect example of providing benefits to the physicians.

Rachelle: Right.

Mark: Reducing burden and waste and problems they're having to deal with. Like you said, of course they would want to do more of that if it's helpful to them. I think, unfortunately, a lot of organizations are trying to force or pressure people into things, and so that question isn't really so much about engagement as it is — I think people say, unfortunately, they're really asking, “How do we force people to do what we want?” That's not what Lean is about, right?

Rachelle: You don't. [laughs] Exactly. I think that's exactly the point. You don't force anybody into doing it. It's by experience. Frankly, one of our early learnings was, every time we had people on teams and they were new, it was just like it opened up an entirely different vista for them about what was possible and how to think about problem-solving. What we could target, then, was, “How do I get some naysayers like that on the team?” Really, without exception. For example, one physician who I was talking to, who was kind of growly about the whole thing, and he said, “Oh yeah, we're going to clean closets, and we're going to move this over here and that over there, and that's going to make a big difference.” He was kind of being sarcastic, and I said to him, “I would just ask you, for me, if you would just please be on one team. Just try it, because I can't explain to you, in a way that is going to make sense to you, how powerful this is. If you would just agree to try it out.” He said, “For you, I will do it.” He was on a team. I didn't actually know that he had gotten assigned to a team. He agreed, and he was on it, and the team went forward and did all of their work that had to do with the clinic. I got a card from him a week or so after that that said, “Thank you so much for that opportunity. I had no idea. I have an entirely different way of thinking right now. I can't be more proud to be a part of Winona Health. This was such an experience.” Which was an amazing experience for me to get a card like that, number one. Number two, he started showing up every day at the focus-board meetings, which are like huddle boards, with the staff, and started removing the barriers for them.

Mark: That's great.

Rachelle: It was just by virtue of being on a team and actually seeing how those discussions happen. He had whatever perspective he had before that, but he understood it entirely different. It is the experience. You can't force people. We could say, “You must do this.” It doesn't get use the results that we want. It's by engaging them in a different way and having them actually have the experience of being there and saying, “Do you understand the problems as we see it?” I really do believe that most people will gravitate towards that and say, “This is a better way.”

Mark: Right. I want to transition, talking a little bit more about your role as a CEO in this process, think Lean transformation, if you will. You talk about engaging people and leading. You're encouraging that physician to get involved and give it a try. First question is, as a CEO, there are so many pressures on your time and issues that you have to address. How do you prioritize things? How does Lean fit into your day or your typical week as a CEO in terms of the amount of time you're spending on it or does it just become incorporated in what you're doing?

Rachelle: It's how we work. I think one of the really hard things for lots of organizations is thinking that Lean is somehow a separate or parallel way to do things. They keep them separated that way. Here, quite frankly, my job…Everything I do has to drive Lean. It isn't a separate thing that I do. I'm the champion of it, I'm the driver of it. I'm the one who says, “It's not going away.” I'm the one who says, “Where's your E3 on this?” All of those kinds of things. Until organizations really understand, it's how we manage. It's how we think. It's a different culture. It's a different way of doing business. I've had some of my senior management, for example, staff say “I kept trying to do both, and I couldn't keep up. I just had to give it up, and I just had to jump in and decide this way. It just made all the difference.” You just start seeing the break through approaches that they have, the coaching, the mentoring roles that they take on. They have to give up control around a lot of things. There's a lot of change that happens for management staff, I think, in particular. Then, as you see, the other staff come up and really bloom, and taking ownership and really being empowered to do things. When you really see that happen, it's a pretty powerful thing. It is not for everybody. There are people that cannot be, or don't want to work in this environment and will not be successful. We have had those kinds of changes here, in management and then, with staff, but the decision we have as an organization, is this is how we're operating. I changed the strategic planning process. We don't do budgeting any more. We do forecasting, quarterly forecasting. We take away those kinds of tools that are the old traditional things, implement the new ones. Our system and processes can then drive the work the way we need it done. It is all the time, 100 percent of what I do, and how I do it. I guess that's just probably, for me, when I think about what we really mean, and if you really want to have the power of truly Lean work, I think you have to do it full on.

Mark: That's a really great point. I need to find somebody to do a whole separate podcast on this idea of getting rid of the budgeting process, or beyond the budgeting approach that Theta Care and others use. I'm sure when you said that half the people listening probably went, “What? Get rid of budgeting?” Maybe we can, if I can't find another volunteer to talk about that, we could spend 20 minutes on that topic alone. Let me just as a final thought and final question, Winona Health has been part of the Healthcare Value Network for a couple years now. I was wondering if you could share some thoughts on what you're getting out of that process. I believe you hosted a site visit. I know you've gone to other organizations. You've had people come and visit you. Can you talk a little bit about the learning that takes place through that?

Rachelle: One of the hardest things actually, as an organization starting new into this, is finding like minded people and organizations. People that really want to move the direction and understand the vernacular around this. Who understand the challenges around this. All of those kinds of things. What was really great about the Health Value Network was, there they are. By joining that and then linking into our cohort, the other ones that are out there, the tools, the messages, the examples that are out there. Being able to go to other Gembas and see firsthand how other organizations are approaching these things, but they're doing it using the Lean thought processes and approaches and so forth has been invaluable, really, for us. Because I can go to both state and national meetings of other healthcare organizations and there's more of a tendency to ring our hands about everything that's happening, but we don't have the solutions. We try to do things. I think even approaches that come out…I think about the governmental approaches, there's no Lean thinking about that. It's just, “Here, we're going to do this” but there's no design in that and no approach to it. That's the sort of the old and the new in trying to do it. For me, trying to break new ground and being a different type of organization that would be viable and successful in the new world of healthcare, I need to have us help us feed you if you have like-minded organizations. That's the biggest part of it. Of course, and we have our directors here and other management staff that connect up. We go into the website. We pull tools out. We can call other organizations. We get calls sometimes for things that we've got or we've done. We all have to adapt them to our respective organizations, and there's as big openness there for sharing. This isn't about competitiveness and things like that. It's about not having to reinvent the wheel, and furthering our respective missions, because we all do really important work in caring for our community. Having access to some of those things and not having to start from scratch, is enormous. It's a huge benefit to us.

Mark: Talk a little bit about the process of having others come in and visit, because it's a lot of work to put together a visit. It interrupts people's days and week to have outsiders come in. What is that like having others that are working on Lean come through and take a look at some of the things that you're doing?

Rachelle: I think it's a really valuable process for the organization that's being visited, partly because in all of the prep work, I think you're taking some time actually because you're going to tell your story. You're really taking some time to celebrate and revisit what has been some pretty significant success. Then, I think as they actually go out into the Gemba, and are talking and have staff presenting things, it's a real validation for them, too. Others are coming and trying to learn what we're doing and asking questions. Then, our staff asking a lot of questions. There's a huge knowledge transfer type of thing that was going on. While it's work to put together, I think there's a real pay off both from your own staff and just how they feel about it, and being able to tell their story and share things out there. Then, I think, actually just seeing things operate and asking questions. It's one thing, if you're looking at some documents or something. It's another thing when you see in real life, real time, full color. Here's how it's operating. Here's how it looks, and stuff. It triggers lots of ideas for people. For us, it was as much of a learning experience having people come here, as it was for them, to come to see what we did. When you lay out your plan again at the beginning of what you're going to do, it's not as much work. I didn't think it was as much work, maybe what many anticipate of hosting a group. I think people are pretty respectful of what it takes, and going around a facility, and all that kind of stuff. I would encourage anybody to do that.

Mark: Great. Rachelle, thanks so much for being part of the podcast and sharing some of your perspectives and experiences. It's been a real pleasure talking with you.

Rachelle: It was my pleasure, too. Thank you.

If you have feedback on the podcast, or any questions for me or my guests, you can email me at leanpodcast@gmail.com or you can call and leave a voicemail by calling the “Lean Line” at (817) 993-0630 or contact me via Skype id “mgraban”. Please give your location and your first name. Any comments (email or voicemail) might be used in follow ups to the podcast.

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