Do Toyota's "Lean" Management Methods Work for Healthcare?  New Study Says Yes

The Takeaway

1. Health economist K. John McConnel at Oregon Health and Science University led a study recently published in JAMA-Internal Medicine that found it is not only possible to apply Toyota-type quality improvement methods to health care, it leads to better outcomes.

2.  The study looked at 597 hospital cardiac units in the US that operated catheterization laboratories.

3.  Nurse managers were interviewed about 18 key performance practices in their organizations. They were asked to rate their units as poor, average or higher performers on each indicator. The researchers then gave each response a number from 1 to 5, with 5 being considered a "best practice."

4. Performance scores were divided into categories representing management goals: standardizing care/Lean operations, tracking key performance indicators, setting targets, and incentivizing employees.

5. Units with higher ratings had lower 30-day mortality ratings but they did not have lower 30-day readmission rates.

6. Because of its large sample size and the ability to rate different organizations in a consistent way, this study  showed that Lean Management Methods can be used effectively in health care settings, not just in manufacturing.

The One Minute Summary

Back in the 1990s, Toyota's quality improvement program was being widely hailed by management gurus as the way to regain America's competitive advantage.  It features worker/management teams, incentivized goals, and a focus on process and communication. Today, process-oriented quality improvement methods  have become routine in American business but their adoption by health care organizations has been difficult to measure and evaluate. Now economists have come to the rescue.  They have created a management practices evaluation tool that can compare quality improvement efforts at different organizations in a standardized way. The tool has been validated and shown to work in the health care setting. This particular study used the measurement tool to compare how different organizations were putting quality control practices to work in their cardiac catheterization units in 2010. They found a correlation between those that were rated as using the best management practices and lower 30-day risk adjusted mortality rates.

This study provides a good example of the way the social sciences and medical sciences can work together. Economists have learned how to measure and compare management practices.  Their work provides a significant tool that health care planners can use to evaluate their own management practices. It should be applicable to all types of health delivery settings.

There is a lot of focus on reducing 30-day hospital readmission rates at the moment and, interestingly, this study did not find a correlation between the use of best management practices and lowered readmission rates. That finding does not look especially compelling given that there is no evidence that the hospitals being studied were actively engaged in targeted efforts to prevent readmissions.  Had they done so, the results of this study may well have been more encouraging on that front.


Read the study: Management Practices and the Quality of Care in Cardiac Units
K. John McConnell, PhD; Richard C. Lindrooth, PhD; Douglas R. Wholey, PhD; Thomas M. Maddox, MD; Nick Bloom, PhD

Useful Interactive Maps

If you are looking for teaching tools or just trying to find up-to-date information on health statistics and trends  these interactive maps provide a wealth of data. They are all online and free.

The Dartmouth Institute for Health Care Policy and Clinical Practice has produced an excellent map using Medicare data.  The Dartmouth Atlas allows users to create reports based on hospital referral regions (HHRs), hospital service regions (HSAs), primary care areas (PCAs), states, zipcodes, and even individual institutions. This is the go-to resource if you need information on utilization rates, medical discharges, or any of two dozen other topics and indicators.  In addition to seeing it mapped, the site also allows you to bring up your data in the form of a table, bar graph, linear graph or age and sex distribution.  One of the most useful features is that once you have found the data you need, you can download it to PowerPoint, or Excel, or you can create a PDF.

The Commonwealth Fund has created the Health System Data Center. It features a US map that measures a broad set of health indicators.  It ranks regions by three different "scorecards," showing either the state system, child health care or local area  rankings.  Each scorecard can be broken down into a number of factors such as childhood obesity rates or the percent of children who received needed mental health care in the last year. This tool is useful for comparing health performance between one region and another. States can also be ranked individually. One limitation, with this map however, is that information is not available past 2009.  This site also makes it easy to send your results to a PowerPoint slide or a PDF.

If you want to find out where quality improvement research is taking place, you will be interested in this map. Professor Ross Baker of the University of Toronto and Naomi Fulup of University College London led the team that researched and created it for The Health Foundation  in the UK.  Click on an icon at any  point on this global scale map and you will be taken to that instistitution's website. The "scan" of health improvement science organizations found mostly academic centers and healthcare institutions gives a general snapshot of where improvement research is being conducted.

SIBs Being Tested to Reduce ER Visits, Costs

Source: nhs.uk

The Takeaway

1. Social Impact Bonds, also called "pay for success bonds," are an innovative funding method for community-wide health improvement and cost reduction.

2. The California Endowment is investing 1.5 million dollars on a pilot project in Fresno, CA to test whether in-home interventions can reduce ER visits and hospitalizations due to childhood asthma.

3. Applied to health care, the new funding method is being dubbed an HIB (Health Innovative Bond).

4. If they prove to have measurable impact and scalability, HIBs will offer a new way to pay for preventive care.

The One-Minute Summary

Social Impact Bonds (SIBs) are currently being used in Australia the United Kingdom, and New York City to fund broad-based social improvement projects that, in this age of narrow funding streams, might otherwise be difficult to finance. The idea is that local governments partner with private investors to issue bonds for a local project. The bondholders then contract with non-governmental service agencies to carry out the project. Investors get paid only when certain benchmarks are achieved. This gives the investors an incentive to monitor progress, and presumably, keep things on track. The local government pays the bond and taxpayers benefit by only paying for projects that have shown positive results. New York's Mayor Michael Bloomberg recently signed off on a pilot project to use an SIB to reduce recidivism rates at the Rikers Island men's facility (a jail).  Now, this "pay for success" model is being applied to healthcare reform.

Rebecca Fairfax Clay described the first use of an HIB (Health Impact Bond) in an article for Environmental Health Perspectives. The California Endowment is putting up the initial money and Collective Health, a social enterprise organization is overseeing the project. The aim is to save money by reducing ER visits and hospital admissions for asthma sufferers in Fresno, CA. Asthma rates are particularly severe in this area; twenty percent of children in the county have been diagnosed with the disease. In the pilot phase of the study 200 children will receive preventive care in the form of home visits from community health workers. The program not only allows health workers to monitor medication compliance, it also pays for interventions such as removing carpets and cleaning up dust and mold.  Backers expect to see a 33 percent reduction in ER visits and a 50 percent reduction in hospitalizations.  The resultant savings are expected to be more than enough to offset the costs. Based on initial estimates, insurers will save 5,000 dollars for every child in the program.

Read the Article: Health Impact Bonds: Will Investors Pay for Intervention?

by Rebecca Fairfax Clay