It's great to see CEOs blogging and sharing transparently on the web, sharing their views, stories, and opinions. Paul Levy was a real innovator in this regard (and still blogs about “Not Running a Hospital“). Â You can find a few other hospital CEO blogs in my general list of Lean healthcare blogs.
I started reading the blog of Gary Passama, CEO of NorthBay Healthcare in northern California last August when I had the chance to come do two days of introductory Lean training through the Lean Enterprise Institute.
I really appreciate Gary's interest in Lean as an alternative strategy that's far more constructive than the traditional waves of layoffs and cost-cutting that never seem to reduce cost in the long term.
Passama allowed me to quote him in this article I wrote for Becker's about Lean as an alternative to layoffs, based on his blog post.
One CEO who is questioning the use of layoffs as a cost-reduction method is Gary J. Passama, the CEO at NorthBay Healthcare in Fairfield, Calif. In a  blog post, Passama wrote that NorthBay has “unfortunately had to deal with various cost crises by laying off staff” during his tenure, adding that senior leaders sometimes “really have no choice” about layoffs.
Mr. Passama now questions if their past layoffs really reduced costs in the long term. He wrote, “After a year or so, the employee count is back up and the savings evaporate,” adding, “There has to be a better, longer lasting and less traumatic way to deal with such fiscal situations.” Like many healthcare CEOs over the past ten years, Mr. Passama has learned that there are, indeed, other choices, and Lean management is one of them.
Here is his post from last year on Kaizen. In part:
Lean is a journey, not a destination. Â It requires a long-term time horizon and long-term commitment. There is much education and communication required.
To the question why should NorthBay embark on the Lean journey, I say “kaizen”! It's a good idea.
They are thinking long-term — the good news, so far, is that Passama and NorthBay are still working hard at this.
Passama wrote another post recently after I had a chat with him and their CMO, who is also a very strong Lean proponent internally. In part:
This is our first full year of learning how to begin applying the Lean process to existent projects at NorthBay. We have had several successes. We reduced the time between a prospective employee's application for a position and when an offer for employment is made. We learned our hiring process caused dissatisfaction by managers and prospective employees, as well as additional expense because temporary employees were being used to fill open positions. Our goal is to reduce the total process time to two weeks.
A second project involved reducing the time between a suspicious mammogram and a biopsy. We aim for seven days. This cuts the number of times a patient returns for a breast cancer workup and reduces those sleepless nights for a patient. Having experienced this situation twice in my own family I know how important it is to improve this process.
Looking back now I realize it has only been 16 months since we began talking about Lean. We have come a long way, but have much more to travel. Even so, we are much further on a Lean journey than most other healthcare organizations.
I appreciate his sharing… I also found this post of his to be very interesting, about the financial impact of the Affordable Care Act on the “Cadillac” health insurance they offer to their employees.
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Check out my latest book, The Mistakes That Make Us: Cultivating a Culture of Learning and Innovation:
[…] Can hospitals, here as we’re going into 2017, generate significant cost savings by sending staff home early and other traditional cost-cutting measures? Are layoffs really helping? Some CEOs have learned that layoffs can be counterproductive. […]
Best wishes to Gary in his retirement!
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