Lean Management in Healthcare: Patrick Anderson’s Vision in Chugachmiut

LeanBlog Podcast Episode #53 is a conversation with Patrick M. Anderson, the Executive Director of Chugachmiut, the Tribal consortium created to promote self-determination to the seven Native communities of the Chugach Region. I met Patrick at a Lean conference, where he shared his experiences with applying Lean principles to healthcare delivery in Alaska. I am happy to bring their story to you here in the first part of a two-part Podcast discussion. Listen to Part 2.

You can also read more about Lean concepts at Chugachmiut on their website. In this episode, we discuss the transformative power of lean principles in the healthcare sector with a remarkable case from Anchorage, Alaska. Chugachmiut, an organization dedicated to providing essential medical care to remote native tribal regions, has integrated lean methodologies to enhance healthcare delivery across seven villages in south-central Alaska. Learn how Chugachmiut's unique model, involving community health aides and a combination of traditional and modern strategies, has overcome challenges posed by geographical isolation and harsh weather conditions. Discover the impact of these lean initiatives on operational efficiency and patient care.

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

• About the Chugachmiut organization and tribes
• Inspired by Nypro's “High Velocity” system
• Kaizen events for healthcare clinic
• Getting rid of individual annual performance evaluations
• WSJ piece on eliminating reviews

Questions:

• What are the key lessons Patrick Anderson learned from implementing Lean at Chugachmiut?
• How does Chugachmiut's approach to healthcare differ from more conventional models?
• Why did Chugachmiut decide to eliminate individual performance evaluations, and what were the outcomes?
• How does the combination of Lean and Dr. Deming's principles contribute to Chugachmiut's success?
• What role does leadership play in the successful implementation of Lean methodologies?
• How does Chugachmiut ensure that cultural and behavioral factors are considered in patient care?
• What advice would Patrick Anderson give to other healthcare organizations looking to adopt Lean principles?

Automated Transcript:

Announcer:
Welcome to the Lean Blog podcast. Visit our website at www.leanblog.org. Now here's your host, Mark Graban.

Mark Graban:
Hi, this is Mark Graban, and this is episode 53 of the Lean Blog podcast for November 19, 2008. Our guest today is Patrick Anderson, the Executive Director of Chugachmiut, an organization in Alaska that serves native tribal regions with a number of services, including primary healthcare. I met Patrick at a Productivity Inc. Conference and was really impressed with what Chugachmiut was doing with the combination of both Lean and Dr. Deming's principles to improve their management system. They've been working with Lean for a number of years, and I hope that you'll enjoy hearing about their story. This is just part one of what will be a two-part discussion, so I hope you'll check back for this and other future podcasts.

Well, again, our guest today is Patrick Anderson. Thank you for joining us on the Lean Blog podcast.

Patrick Anderson:
It's wonderful to be able to share our story with you.

Mark Graban:
Thank you for taking the time to do so. I was wondering if you could start off by telling us about the Chugachmiut organization and who it is that you serve.

Patrick Anderson:
I certainly can. We're headquartered in Anchorage, and as I look out my window, it's a typical October day–daylight out, but it gets dark fairly quickly, usually around 3:30 or 4 o'clock. The temperature is down somewhere around 23, 24, or 25 degrees, and there's not much snow on the ground, surprisingly.

Chugachmiut is headquartered in Anchorage, but we serve a region of about 10 million acres in size that covers seven villages throughout south-central Alaska. Two villages are actually in Prince William Sound. As you may know, that was the site of the Exxon Valdez oil spill back in 1989. On the other side, near the Copper River, is our village of Eyak, which is a part of our community of Cordova. And of course, Valdez and Seward are on the surrounding coastline of Prince William Sound. We also have two villages in Lower Cook Inlet, at the bottom of the Kenai Peninsula, Port Graham, and Nanwalek. We operate clinics in five of those communities and support two of the other communities with funding.

Mark Graban:
Within the organization, what kind of healthcare services do you provide?

Patrick Anderson:
We don't provide the whole range of services. The Indian Health Service, in trying to figure out how to provide health services for very small Alaska Native communities, came up with the idea of the community health aide. There are about 230 small villages that are predominantly Alaska Native in the state. Some of them are very small. Our smallest community has about 55 year-round residents and may grow a little bit in the summertime, but they're also about 25 to 30 minutes away by twin-engine airplane from Anchorage. And there are some days where you can't get into that village by any means because of potentially hurricane-force winds for up to ten days.

Each community has practitioners who are trained according to a specific methodology. In essence, they practice medicine, but they don't practice medicine in the conventional sense. What they do is follow a manual they're trained with to conduct patient assessments, and then they get into electronic communication with a healthcare provider, either a mid-level practitioner, a physician's assistant, an advanced nurse practitioner, or a physician for the more difficult cases.

Chugachmiut's four villages are served by community health aides. They're trained in emergency health procedures and certain medical procedures and can be authorized by a physician to provide those services without calling in. But most often, they serve as the eyes and ears of the physician, and their diagnoses and treatment prescriptions are provided by the mid-level practitioners or the MD. We provide primary care, and we have a physician and two mid-level practitioners in Seward that provide some of that support. For more difficult cases, we rely on the Alaska Native Medical Center, the hospital in Anchorage, which is our primary care hospital, and the Southcentral Foundation's primary care center, which is where many of our health aides call doctors.

So, we are a primary acute care system, but we do have to take patients out of our villages to actually visit with doctors.

Mark Graban:
How did you come to start using Lean principles in the delivery of healthcare? Can you tell our listeners how that originated?

Patrick Anderson:
I certainly can, and it's a bit of a serendipitous journey. I spent a number of years teaching at the University of Alaska Southeast, located in Juneau, Alaska. Two of the courses that I taught, even though I'm a law science faculty member, were an introduction to business course and an international business course. During that period, I became quite familiar with the principles that Dr. W. Edwards Deming formulated and, in fact, had an opportunity to visit a high school in Sitka that had implemented a curriculum based on some of Dr. Deming's principles.

When I left the university in 1991, I filed some of that information away as I practiced law for a period of time. When I came to Chugachmiut, I was all of a sudden managing an organization with about $10.5 million in funding and about 60 employees. I have to confess, based on my past business experience, it was not a well-run organization. I had served for about 15 years as a board member for Sealaska Corporation, which is a Native corporation for Southeast Alaska that I'm a shareholder of. In that service, I sat on the board of a partnership that Sealaska had with a company called Nipro Precision Plastics.

In May of the first full year I was serving as Executive Director of Chugachmiut, I was attending a board meeting of Nipro and Sealaska's plastics plants in Clinton, Massachusetts. The president of that company, Brian Jones, happened to come in and have lunch with three of us for about 30 minutes. He was explaining Nipro's high-velocity system and how it enabled Nipro to compete in a post-NAFTA environment when a lot of plastics molding was going offshore. Well, it turned out that the high-velocity system was based on the Toyota Production System. As Brian was explaining it to us, and as I had seen in the plastics plants that Nipro managed for us, there were huge gains–monumental gains in productivity. These weren't just incremental, small gains; they were huge, and it enabled our plants to survive.

That made me curious, which I followed up with a trip to the Shingo Prize in Lexington, Kentucky, that year. Fascinating. Absolutely fascinating. That's how we became aware of the Toyota Production System and Lean methodologies.

Mark Graban:
And what was the timeline on that?

Patrick Anderson:
That was in May of 2004. I met a couple of Lean administration consultants. We don't have any manufacturing, and I really wasn't aware of the Lean healthcare movement, although I subsequently did become much more aware of it. But I came back to Anchorage very excited. We scheduled a consultant to come in and do one training, and I had my staff do some distance-delivery education. We began our path of trying to understand what Lean methodologies were all about and scheduled our first Kaizen event for one of our clinics in Port Graham.

Although it was a typical maiden effort at a Kaizen, it gave us a huge amount of insight into the management of a village-based clinic. The insights we gained were, number one, that most of the time, employees don't communicate with management. As a consequence, there are huge problems, typically with providing tools to the employees that allow them to do their work. Most employees don't want to rock the boat; they're fearful of management meddling in the comfortable circumstances they've usually set up in their workplace. We really didn't get much traction until we engaged a Lean sensei, Dr. Tom Jackson, to come up and teach us in a number of Kaizen events. We budgeted for these, and I'm happy to say my board agreed to budget a substantial amount to conduct at least six week-long Kaizen events during the next fiscal year, which started October 1, 2004, and ended September 30, 2005. That's when our learning really accelerated, and my role as a leader began to change gradually. That change is continuing to this day. It's amazing how, if you truly embrace the Lean methodologies, the role of leadership transforms into something completely different from what you ever imagined it to be.

Mark Graban:
Looking back, what are a couple of examples of that change in management approach? Either things that you do differently or encourage other leaders in the organization to do differently.

Patrick Anderson:
Here's one illustration that I believe captures the change, and it only happened recently. This is the first year that we have knowingly and accurately engaged in the process of Hoshin Kanri (strategy deployment) throughout the organization. In the process, as we were taught, we have an A3 that I'm obligated to prepare. In my A3, I state what I believe the problem I want to be addressed is. The problem statement is pretty familiar to Lean practitioners. Then, I give some guidance to my executive staff by stating a target statement–what I want to see in terms of achievement. We're taught that the target statement needs to be numerical, that we want an X percent improvement in a certain part of our business. We want to reduce the amount of time it takes us to do a particular process by X percent.

I carried that out

by beginning to define some of the solutions that I thought would address the target statement. As I sat down in the first round of catchball with my five-member executive team, we were about 30 minutes into the conversation when one of my division directors spoke up and said, “Patrick, you aren't supposed to be telling us the solutions. You are supposed to be setting the target, and then we will work on the solutions based on our catchball with our staff and looking at our resources. You really should leave the research and devising the solution to us.” I had to say, Mark, that it made a lot of sense. I hired these people or kept them on when I got here because of their intelligence. If anything, when I set the target, my role should then be to utilize my research skills, developed as a faculty member and as an attorney, to mentor them in how to come up with the problem solutions. That's the big transformation. I am no longer holding hands. I'm setting goals, I'm setting targets, I'm coaching, I'm mentoring. I am able to fulfill my role as a strategic leader for the organization. In other words, I'm not so preoccupied with day-to-day management. I am able to try and extend my view, my vision, my reach 10, 15, 20 years down the road and try to help guide the organization into a structure that will meet those goals 10, 20, 30 years down the road. Then, the leadership role of interacting with patients, clients, customers, stakeholders, board members, and partners becomes a more significant part of my role. So it has been a huge transformation. I'm building a team of five leaders who I hope can extend into strategic leadership, into governance leadership, and into interactive leadership with the people we serve.

Mark Graban:
The story you told me is a great example of what we talk about in Lean leadership. I'm curious if you were able to dust off some of what you had learned or practiced before with Dr. Deming's philosophy. We have a lot of listeners who, like myself, have a similar background and appreciate the complementary nature of the Deming approach and Lean. Do you have any examples of that you could share?

Patrick Anderson:
Oh, absolutely. Chugachmiut no longer does individual employee performance evaluations, and my board agreed to remove that from our personnel policy. That's specifically because, as I've explained to my staff, we want to work in terms of systems and processes, not in terms of individual interactions with those systems and processes, except through the whole concept of standard work.

What we've tried to implement–and are still in the process of implementing–is an organization-wide value map that focuses around the client, around the patient, and around the customer and their journey through us, and then looking at all of the supportive functions that we have. The term that I keep hearing most often is “elimination of functional silos.” We try to show every employee that they are integral to every service we provide, to every customer, client, or patient we serve.

For example, we have a language and culture program, and people may say, “How does that fit into healthcare?” Well, it fits into healthcare because we've been able to adopt a holistic approach to healthcare where we don't just react to the condition that the patient brings to our healthcare providers. We're beginning to understand that looking at the behavioral health of the patient is critical to how they deal with their physical health, and language and culture services are a component of that.

Dr. Deming talked about the team. He talked about how you don't individually exhort people to do better. Instead, you improve the systems, define the role of each person within those systems, and how they interact with all their coworkers to provide the best possible and highest quality service they can. We know that if we can convince our employees that they're a part of a process, and that the process needs to be improved and they need to be a part of that improvement, we get much better results.

We've implemented this through a couple of things I learned in my first six months as Executive Director at Chugachmiut. The first was that there is no blame in a Lean organization, and our leaders are not supposed to use the concept of shame to encourage behavioral change. We immediately began talking about Chugachmiut being a “no blame, no shame” environment. Then we realized that even though we're “no blame and no shame,” we have to understand the facts. We can't be judgmental about the facts. We can't accept the first little snippet of fact that comes in and say, “Oh, this must have happened.” We really need to be scientific about it.

So, what all of a sudden comes up as we begin to go into a “no blame, no shame,” fact-based, and non-judgmental environment is process improvement, development of standard work, and then the whole concept of training our people. If they don't know, I mean, already I've discussed a lot of concepts that our employees need to know and understand, but even more so, they need to begin adapting to these concepts through behavioral changes in their own life and in their reaction and responsibilities in the workplace.

So, I found Dr. Deming's principles applicable throughout. I'm not coming in and telling individuals, “You can do better; you know you can do better.” We're showing them how to do things better, training them, and showing them that their performance is dependent on other people's performance. It's in their best interest to make sure that all of their coworkers perform defect-free work, and when the handoffs of work occur, there are no defects, and we have the shortest possible process.

We no longer, for example, have a 144-day new recruitment and hiring process. We average about 32-33 days. So, a lot of Dr. Deming's principles fit right in with everything we're doing.

Mark Graban:
That's great. I'm curious, in particular, to follow up on the idea you talked about–getting rid of individual annual performance reviews–because that's something I blogged about not long ago. A professor from UCLA wrote a column in the Wall Street Journal making a very strong case for getting rid of annual performance reviews. He argued that they are harmful to organizations and society. He made a case that was reminiscent of Dr. Deming. But it still seems so rare to find an organization that has taken that leap. I'm curious, was that a harder sell to the board, or was it a harder sell with the employees? How did people react to the idea?

Patrick Anderson:
I didn't see much of a reaction. One of the problems with being the leader in any organization that is non-Lean is that most employees don't talk to you about their opinions, problems, concerns, or issues. They don't reveal to you the complaints that come from the patients or customers that you serve. So, I didn't hear much. When we implemented that change, it was before I had established my network of sources. Today, I can quickly tell you when there is an issue or a problem in the organization because I have a number of people who understand the Lean concepts and will reveal problems and issues to me. We're not quite at the same level with our patients and clients yet, but I'm confident we're going to get there.

When I proposed it to the board, it didn't take long for them to accept my recommendation. I outlined a number of good arguments. I used some of the more obvious arguments–the first being that if the day after the employee's performance review there is an error in the part of the process that the employee you just reviewed is involved in, you may not discuss that error with the employee for another twelve months. I explained to the board that the process we'd like to have in place is, first of all, making sure that when we analyze the process, we gain all of the quality improvements that we can, shorten the process, and establish a training system and a training-to-standard work system. That way, first of all, I don't think that mistake will be made. Dr. Deming cited that 94% of errors and defects occurring in a system come from process problems as opposed to employee problems. I adopted that approach, explained it to the board, and they approved it.

I didn't have too many difficulties from existing employees. I made it clear that what we wanted to do was to be fact-based, non-judgmental, non-blaming, and non-shaming. When we come to you with a defect that occurred in the process, it's not for the purpose of slapping your hands; it's for the purpose of determining your level of knowledge, using that knowledge to analyze that section of the process, improve it, and then figuring out how we can build quality in right at that point. And we want to do it today as soon as the defect happens. We don't want to wait for another month or two–or twelve months–before we fix that.

Most employees bought into that, at least the ones I had regular interaction with. The other part they really enjoyed–and that my managers enjoyed–is that we no longer had to have that one sit-down. I'm not sure how other leaders feel, but you figure if you're going to have a performance evaluation, you should have some performance problems that you document in order to show that you're paying attention to your employee, and then have some sort of corrective plan for those few little problems that you feel obligated to identify. Of course, that makes everyone feel uncomfortable. “What do you mean I didn't get an ‘A' in everything?” “Well, I thought you had these particular issues.” “Well, why didn't you talk to me about them when they were happening? Then I could have done something.” Everyone walks away unhappy.

When you eliminate performance evaluations, it just encourages your employees to hide the very process defects that you want to encourage them to reveal so you can fix them. I found so many reasons for

getting rid of performance evaluations. The same is true if you have an exemplary employee. You don't want to wait twelve months to tell them they're doing a great job. You want to build it into your system so that not only do you come by and… well, let me take that back–you don't want to identify the defects. You want your staff to, but you want to be able to go up and compliment that staff and just say, “You know, you're doing wonderful work.” We're asking our employees now to document process improvements. When you see those, you'd like to be able to go down and say, “Mary, I think you did a wonderful job in identifying this process defect and reacting to it.” It just builds a different way for employees to react and respond to problems, as opposed to wanting to hide them from you so that they don't get into their performance review, or to bury them, or to try to fix them on their own without anyone knowing about it. If they feel free to surface those issues, you're going to fix them a lot faster, and they're not going to have those problems in the future.

Mark Graban:
I think those are great lessons for anyone listening, not only from healthcare but from any organization that's trying to embrace Lean.

Announcer:
Thanks for listening. This has been the Lean Blog podcast. For Lean news and commentary updated daily, visit www.leanblog.org. If you have any questions or comments about this podcast, email mark@markgraban.org.

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