The Virginia Mason Medical Center is based in Seattle, Washington. Since the Virginia Mason leadership’s first visit to Japan in 2002 to seek insights from Japanese manufacturing, the hospital has evolved into a leader in the application of lean principles to health care.
The development and implementation of the Virginia Mason Production System is a standout case study that holds lessons for any leader looking to adapt the principles of the Toyota Production System to a non-automotive environment. Virginia Mason’s journey has been the subject of a number of books on the topic of lean management in health care, including the excellent Transforming Health Care by Charles Kenney (the book we have gifted most often to our clients at Shinka Management).
Whilst the application of Total Quality Management and adoption of Kaizen culture has a longer history in Japan, with evidence of Quality Circle and related improvement-focused activities in Japanese hospitals dating back to the 1970′s (Tateishi, 1994), the Virgina Mason Medical Center deserves attention for its success in learning from the Toyota Production System and implementing an organization-wide management system that influences Virginia Mason’s entire approach to patient care.
There are few environments and workforces that present more complexity to the task of organizational transformation than a hospital, and yet by all accounts Virginia Mason is achieving impressive success on this journey. Since a crisis period with financial losses in both 1998 and 1999, Virginia Mason has since achieved positive margins every year since implementing the Virginia Mason Production System. Together with the significant improvements achieved in efficiency across the organization, safety, quality and patient satisfaction metrics have also seen impressive improvement. The Virginia Mason Medical Center has subsequently been recognized as a Leapfrog Top Hospital every year since the award has existed.
Virginia Mason’s achievements to date adds another chapter in the story of the development of lean, with the various exchanges of ideas between the US, Europe and Japan over the last several decades. Following W. Edwards Deming’s influence on post-war Japanese manufacturing quality, and Taiichi Ohno’s leadership in developing the Toyota Production System and its subsequent export to the West, we are now seeing the Japanese health care industry turning its attention to the progress being made abroad in organizations such as Virginia Mason.
The following interview with Chairman and CEO Dr Gary Kaplan and Transformation and Executive Sensei Dr Henry Otero, was conducted at a lean health care conference held in Kyushu, Japan, to share learnings between Virginia Mason and the Japanese health care industry.
In sharing their experiences on Virgina Mason’s lean health care transformation journey, Dr Kaplan and Dr Otero provide insights that holds lessons for any of us seeking to lead effective transformation and culture change within our own organizations.
Paul Smith, PhD
Director, Shinka Management
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Dr Henry Otero and Dr Gary Kaplan, Kyushu, Japan
Dr Gary Kaplan is a practicing internal medicine physician, and has served as the Chairman and CEO of Virginia Mason Medical Center since 2000. Dr Kaplan has led the adaption of the Toyota Production System to transform health care delivery within Virginia Mason, and has been the recipient of numerous awards and recognition for this work, including the John M. Eisenberg Patient Safety and Quality Award issued by the National Quality Forum and the Joint Commission.
Dr Henry Otero, is a medical oncologist, and is a Transformation and Executive Sensei at the Virginia Mason Institute. Dr. Otero has led many process improvement events at Virginia Mason, with a focus on improving physician and executive engagement and creating ambulatory flow.
Paul Smith: What is the Virginia Mason Production System and what does it seek to achieve?
Dr Henry Otero: It’s a management system by which we direct all our activities and align the goals of the organization and the work we do every day.
It’s also a robust organizational system which guides us in understanding who we are as an organization, what goals we are trying to achieve and how those goals align with the work that we are doing throughout the organization, with a view of achieving world-class management.
One mistake is to believe that we only need to learn the tools and methods to become a lean organization. The other is to believe that leaders don’t have to lead or understand the methods deeply. The leaders must be the most committed to understanding and utilizing the methods in order to be role models for the rest of the organization.
There’s a big difference between lean as a project improvement method whereby we just use it to solve problems with tools and ideas, versus a management system which aligns the work we do every day and helps us to accomplish the goals we want to accomplish within our organization.
Smith: Why did Virginia Mason look to a Japanese management methodology to be its guiding light?
Dr Gary Kaplan: We don’t think of it as a Japanese system but as a system that was started and perfected in Japan; in some ways it goes back to Deming and others. A lot of people ask us why we go to Japan to learn – if we want to learn the very best surgical technique, we go to the place that does it the best to learn. That’s how we think about management.
I think the bigger question was why did we, health care professionals, go to manufacturing? Because that was a big departure. Historically in medicine, we’ve always thought that we had all the answers, and that those answers were somewhere in the health care industry. But, when we were looking for a management method, we didn’t find it. Nobody in the U.S. had one in health care.
Smith: And when you did have a look at manufacturing…
Dr Kaplan: We saw Boeing. We heard what Boeing had been doing. We met somebody who had been working at Boeing, John Black. He had been leading the Toyota Production System development at Boeing. So, we went to Boeing to learn from them. Before we ever came to Japan, we went to a company called Wiremold, and met with Art Byrne. The whole executive team visited Wiremold in December of 2001. It was amazing. Unlike Henry or myself, most of the executives had never been in a factory. So, we were beginning to think that maybe the answers were outside of the health care industry. That was a big departure for us.
Smith: When did you decide to take your executive team over to Japan? What was the purpose of doing that?
Dr Kaplan: Well, the people at Boeing said that if you were really serious, you need to go to the source, you need a deep immersion experience. We came home totally different – we were thinking differently – that’s why we continue to take people to Japan almost every year.
Smith: What was the difference? Was it knowledge or attitude, or was it belief, a change of thinking about what’s possible?
Dr Otero: We have lots of answers to that. One answer is that it was learning in a different culture, looking at something that you were not familiar with seeing; Toyota’s history, Toyota’s production, working on a line in Hitachi; and then each night was a debrief, a very long debrief of what we saw, what did it mean to what we were doing at Virginia Mason, and what is the relevance to health care? And those discussions were the best when people started to talk about what their real hopes were for themselves and when we started to realize that things could be different. There was a way to do it differently. You didn’t have to be stuck in the way it was currently being done. You could aspire to do something different. You could see in front of you, what you are aspiring to. That was very motivational to people. For some people, it was that switch – they just caught on fire. That was the most important trip I have taken in my life. It fundamentally changed the way I think about health care and what my motivations were.
Dr Kaplan: I think the best aspect of that is to take people out of their comfort zone. Being in our comfort zone keeps us from processing information. We always fall back on what we know to be true and our foundations. Here, we are out of our comfort zone. We levelled the hierarchy. When you have a surgeon dependant on a nurse or medical assistant to help them understand what’s going on in the assembly line it flattens the hierarchy that exists in health care.
As Henry says, a big part of the trip is being away from home and in the deep conversations we have with each other, many of which are structured fundamentally – I lead those – and many of them are also impromptu conversations including confronting our own weaknesses or things at home that aren’t going well that we are hesitant to talk about. These trips have been powerful enough that we continue to do them.
Smith: Fast forward to today and looking back over the journey and some of the outcomes, what is it that you feel most strongly about in terms of what’s been achieved?
Dr Otero: As I look across the organization, it is people’s focus on the patient and how they approach problems. Their questions about what benefits the patients. What you keep seeing and hearing at Virginia Mason is people asking what’s best for the patient, and this guides us to which ideas we are going to implement and in what direction. I think this is the culture piece that I don’t see or hear anywhere else.
A lot of people say that they are patient-centered, but you have to hear it from the leaders. Can they give up their own self-guided interests to those of the patient? When you see that happen, you know you are in a special place, as that doesn’t happen very often.
Dr Kaplan: Yes, I would agree and it’ is the hardest thing to change and the most important. The management system is really important, the tools and creating flow, providing hope, but it’s the cultural change and the willingness that is key. I think we challenge some really deeply held assumptions about our culture and it sounds like such a no brainer, so obvious. But it’s really, very profound when you think about changing the culture in medicine. Some people say, well if the patient is first, if the patient is at the top, does that mean that the doctor is at the bottom? And there are a lot of conversations about things like that. Some people had to leave the organization because they couldn’t go there.
Smith: Was that because of a shift from a doctor-centric model to a patient-centric model? Is that part of what the shift was?
Dr Kaplan: Uh-huh.
Dr Otero: Yes, I would say we were like most organizations. We designed process around the physician and that was the way it was.
Dr Kaplan: And, we were proud of it too.
Dr Otero: Yes, we recruited people based on that. The shift away from that to patient first was challenging. The rhetoric of “patient first” is easy. You know what “patient first” is but then, looking at patients’ experience, per se, and asking each other, “Are we really patient first? What does it mean to put the patient first?” I think that was really the challenging part.
Dr Kaplan: We are still learning about that but, do we really understand what it means? In the old days, because we were also patients, we thought we knew, but we didn’t. Then we did surveys and figured out what patients wanted. We focused on what we heard from patients. Until we really engaged them as equal partners in the design of care, we really didn’t know what they wanted.
How do we do this? We have patients on our improvement teams. We engage in co-design. For example, we may have a team of six health care people and a team of six patients designing new processes in care.
Smith: You mentioned that the cultural change is something you look back on with pride. What do you look for in people that are able to promote that culture internally? What do you look for in leaders of the Virginia Mason Production System?
Dr Otero: I think the attribute of a leader that is most challenged by the Virginia Mason Production System is growing from a great problem solver, which is generally what people get into leadership positions for in that they can solve problems for their people, to reframing yourself as a coach and mentor and a great problem framer, and being able to know how to encourage, coach, pull and engage people in solving. They solve the problems and you frame the problems, and give them the resources, and ask the right questions. You become a great questioner as opposed to a solver. And that’s a very hard journey, I would say, for leaders, to transition from problem solver to problem framer.
Smith: Does that involve them needing to bite their tongue when they see a solution in their mind as sub-optimal?
Dr Otero: Sometimes you will be in an improvement event and you and even your whole team know the answer. You just want to blurt it out to this team that seems like it is struggling with coming up with an idea, or they come up with an idea and you just know that it’s not as good as the idea you have. Yet, it’s not the idea, it’s the process of improvement that you’re trying to get to. This is the hard thing as a leader. You are not trying to get the answer. You are trying to engage the worker in the process so that they can continue to come up with many answers over the span of time that they are working for you.
The more important thing is to let them go through the process, generally PDSAs (Plan-Do-Study-Act), and almost invariably they find an answer that is better than the one you had in your mind and that’s the humbling part of it. At the end of it, letting the process go, you will find people will come to an answer that’s even better than the one you had.
Smith: I think it’s a great point. Often people forget that the process of kaizen is not necessarily about finding an immediate answer to a problem. It’s more about developing your people to be problem solvers over the long term.
Dr Kaplan: Yes, building capabilities amongst team members so that they can imbed problem solving into their daily life and daily work, and not all traditional health care leaders are able to lead that. They are used to hierarchical decision making, (leaders) swooping in and solving the problem. You also have to have a high tolerance of ambiguity and the ability to use humble inquiry when asking questions. Asking questions because you genuinely don’t know the answers, and you want to know. That’s a big levelling opportunity that we have as leaders that I don’t think we take advantage of enough.
Smith: Some of the biggest mistakes you made on the journey?
Dr Otero: I think one of the things is that we could have been quicker in is moving to the aspects of daily management. The elements of being able to sustain change and engage workers ties into the elements of daily management. That might be something we could have moved to earlier. On the other hand, we may not have known if people were ready and understood enough about it.
Smith: What were you doing in place of that?
Dr Otero: I think it was more top-down leadership driven as opposed to having that structure at that level of the group. How do we engage our teams every day and make the work that they have to do visual? Our daily management structures were more focused around making the work visual for things like production management.
Dr Kaplan: We were focused more on training I think in the early years. We should have moved more quickly to daily management. I also think we needed, and still need, more rigor around 30-60-90 day follow up, going deeper.
I think we have learned a lot about scoping. In early years, we might have scoped things too big, too small. I think we are getting better at that. A lot of people accused me of having too much patience for people, and not moving people along fast enough. I wanted to bring everybody along, but not everybody could come.
Smith: What would be your advice for a hospital considering starting on this journey? Where do they start?
Dr Kaplan: The C-Suite.
Dr Otero: Yes, it has to start at the top. And, there are a lot of ways to learn. One way is to read the book, Transforming Health Care and I think this helps give a little better sense of the potential impact. And, I think a visit to an organization that is doing lean and lean health care is a really great way to get people exposed and understanding what they are getting themselves into and to see if they have the culture and the motivation, and if the leadership have the willpower to go on the journey.
There is nothing worse than to start a journey and not know what you are getting into and then say that lean doesn’t work. Better to do the background work of investigating some organizations that have been successful, especially if you are in the health care industry. Visit one or two of those organizations to see how the leaders behave differently, how they are embedding it throughout the organization, how does it translate to the front line.
Then have an honest discussion with your own leadership team; asking, “Can we go on this journey, do we have the motivation, do we have the interests and alignment?” It’s not an easy journey, but it’s a very rewarding journey, probably the most rewarding journey you can go on. You have to go up against a lot of cultural norms.
That’s where I think people should get started. Then, if there is interest, look at who could they work with to get training and to find a sensei that can help guide both their executive teams and also help them with training within their organization in lean management and lean practices.
Smith: Do you find more resistance or more challenges to this type of thinking in the public sector as opposed to the private sector?
Dr Otero: There are pros and cons but I think it’s very applicable to both. We work with many organizations in the public sector and they have been some of our most successful clients at adopting it across national health care systems. They have different resources and constraints compared to the private sector, but we find that they can be successful if the leadership is interested and committed, and truly whether they are private or public doesn’t make that much of a difference as long as they have a leadership and government that are interested in going in that direction.
Smith: Dr Otero, on the topic of leadership, what are some of the attributes that you see in people like Dr Kaplan as the leader of the organization and the leader of the culture that they do well that enables this to succeed.
Dr Otero: A visionary leader. Someone who leads with vision, and finds the passion behind the work we do. Someone who uses things like economics as urgency but not as mission, focuses and continues to bring you back to the mission of your organization – what you value, and tie that into the improvement activities and the management methods.
Through connecting the dots a leader creates a vision for the organization that you buy into and knows how to create that as a shared vision within the organization. That’s a real leadership skill that leaders who are very successful, like Dr Kaplan, adopt; it’s called “adaptive leadership.” It’s a skill that Ronald Heifetz identified in the Harvard Business Review regarding being able to allow people to solve problems and recognize that sometimes we shouldn’t shield our people from problems but should expose them to problems, let them struggle sometimes so that they can come up with the solutions, not the leader coming up with the solutions. So, they have great adaptive leadership skills to engage people and they have the ability to be vulnerable, the ability to listen to the voices from many different areas when they are making decisions.
Smith: Finally, what’s next for the Virginia Mason Production System and for Virginia Mason?
Dr Otero: I think we are on a journey, we are babies on the journey. We are infants. So, we still see this as something that will develop beyond our lifetime and beyond the leaders that are here today. We continue to work at how we can better integrate our processes across many different silos that we still have and to really focus on the care of our patients. I would say in our work, there is no finish line. It’s a journey and there is a lot of room still to go where health care is regarded. We are humbled by where we have come from and we are humbled by the amount of work that still has to be done to create a terrific patient experience, which is our main motivation.
Smith: Thank you very much.
Paul Smith with Dr Henry Otero and Dr Gary Kaplan of Virginia Mason Medical Center
Paul Smith is a Director of Shinka Management, a lean training and consulting firm with clients in 48 countries. Paul completed his engineering studies with a masters and PhD from Kyoto University, and has been mentored in lean management by some of Japan’s most notable lean practitioners including former Toyota factory managers.
Paul runs lean training courses with Shinka Management and is a regular leader of the Shinka Management Lean Japan Tour.
Transforming Health Care
Virginia Mason Medical Center
Charles Kenney, 2011
TQM Activity Within Hospitals
Haruo Tateishi, 1994
Images of Virginia Mason Medical Center and staff used with permission of Virginia Mason Medical Center and Virginia Mason Institute.