In the lead up to the Lean Healthcare Summit 2017: Empowering Healthcare Professionals Through Continuous Improvement taking place in Johannesburg on 7th September, key note speaker and CEO at Catalysis (formerly ThedaCare Center for Healthcare Value), Dr John Toussaint, talks about the move towards value-based care and the defining traits of an effective healthcare leader.
Tell us about Catalysis.
Catalysis is a not-for-profit institute that focuses exclusively on educational programmes and resources designed to transform healthcare value. We serve many healthcare organisations and leaders in North America, Europe, Africa and Brazil via our peer-to-peer learning networks, education programmes, books, articles and one-on-one in-person and remote coaching.
Tell us about the nuances that distinguish healthcare leaders from leaders in other industries.
I think that good leadership is good leadership no matter what industry you’re in. In April the CEO of the Zuckerberg San Francisco General Hospital, Dr Susan Ehrlich, and I published an article on leadership in the New England Journal of Medicine online journal, Catalyst, in which we focused on five key behavioural traits that are critical to build a culture of continuous improvement. What we found is those five traits are important across pretty much every industry. The five traits are: willingness to reflect on one’s own behaviour on a regular basis and understand what’s working and not working; the second is humility; the third is curiosity; the fourth is perseverance; and the fifth is that of self-discipline, so having a process to make sure that the learning that you are doing is consistently being demonstrated.
In late 2015 there was an interesting article in the Journal of Management, titled: Do Humble CEOs Matter? An Examination of CEO Humility and Firm Outcomes, which studied 105 different software companies and found that CEOs that were humble delivered three times better results both on outcomes and process measures. Also Jim Collins wrote an article in 2005 where he identified humility and self-discipline as the two most important traits. So the reality is that there are important leadership traits for great organisational performance and it doesn’t really seem to matter what the industry is.
You’ve been involved in developing leadership in healthcare for almost a decade now. Tell us about some of your greatest success stories in helping healthcare leaders develop their full potential.
We have some really great examples of success throughout North America and there are some also starting to emerge out of Europe as well. One of the stories that I like to tell is about Don Shilton, the CEO at St. Mary’s General Hospital in Ontario, Canada, who started working with us about six years ago. After visiting the Thedacare hospitals and clinics (where I was CEO for eight and a half years before founding Catalysis) and seeing some of the things that we had done, he got very excited and wanted to apply our practices in his own organisation. Since then he has been working to make his hospital the safest hospital in Canada and last year his hospital had the lowest preventable mortality rate. So he now runs the safest hospital in Canada, which is pretty exciting and great testimony of what he could achieve by applying the leadership principles and the systems that we’ve been working on and developing.
We have a lot of other examples of huge turnarounds and performance on both cost and quality, such as the University of Massachusetts Health System. When Eric Dickson took over as CEO four years ago the institution had a $60 million loss that year. But by following our programme, he turned that around to a $60 million gain as well as dramatically improving quality performance in just two years. Zuckerberg San Francisco General is also doing the same thing in terms of access for patients – they have dramatically improved throughput for a number of their services in surgery and in outpatient care. So the examples go on and on; it’s pretty exciting to see the principles of lean thinking being applied in multiple settings.
According to Catalysis, the three critical elements required to achieve sustainable change are: patient-centred care delivery; payment and incentives based on value and outcomes; and transparency of performance (quality and cost) throughout the healthcare system. Why do you focus on these three points specifically?
I’ve been to 189 different health systems in 17 countries in the last few years and what I’ve found is that nobody has figured out these three things. Our hypothesis is that if we can get these three core elements fundamental to health reform then we’ll see significant improvement.
Here in the US we’ve developed a reporting mechanism in the state of Wisconsin in which all health systems report clinical quality outcomes. Their cost outcomes are reported by the Wisconsin Health Information Organization – which I helped to found – that uses insurance claims data to look at total costs. And what we found is that when we started to report this data publicly, both on clinical and cost performance, things improved dramatically and empowered the people who are accessing care to know where they should go to get it.
I have also worked nationally on transparency of healthcare performance measures with the Centers for Medicare & Medicaid Services. They recently released star ratings, where each hospital is rated from one to five based on clinical outcomes measures. Again, the idea being that patients need to have access to this information to make good decisions about where they go to get their care.
The payment system is another important component of reform. I think most people agree that Fee for Service (FFS) payment is detrimental to delivering better health outcomes. Globally there’s been a push towards a more value-based payment formula where the healthcare providers get paid for delivering higher quality, lower cost care. This is starting to come to fruition here in the US, as well as in Ontario and the Netherlands, so I think the concept of delivering better value care is starting to gain momentum and we believe that it’s really critical in creating the right incentives for healthcare providers to deliver better care to patients.
And then finally the work on patient-centred care delivery is really using lean thinking to create processes that are designed around patients rather than around doctors and hospitals.
Here in South Africa value-based care is starting to emerge but is still a new concept for many. Tell us how value-based care will make a difference and how reimbursement changes for doctors and other healthcare professionals.
We respond to the financial incentives that are in front of us, so I think the key is using the financial incentive that’s going to lead to better health outcomes. I, along with my colleagues, believe that if we were paid for a population of patients, and we got that payment upfront in a per member per month type of payment mechanism, that would free us to think about how we could take the waste out of care delivery so people get higher quality, lower cost care. Right now, at least in North America for the most part, we are paid when patients are in the hospital beds. And that’s got to stop because hospitals are expensive places to deliver care and there’s much less expensive ways to get that care delivered. In fact, the best way is to simply not to need the care at all by preventing the problem before it happens.
I wrote a paper in the Journal of American Medical Association (JAMA) in 2013 that demonstrated that even if we thought about delivery from the standpoint of the total population we are caring for, and we redesigned the care processes around the patient, that we could actually reduce the total cost of care for 20,000 beneficiaries by about $15 million in one year. We do that by reducing the number of admissions to the hospital by 500 – 500 people that would have been admitted if we didn’t redesign the way that their care was delivered. And I think that’s crucial to value-based care – incentives to keep people out of hospital and it’s a correct financial incentive that’s going to do that.
Is there a possibility that practitioners will be paid less under the model?
I don’t think so, in my assessment of what we pay today for healthcare services, and frankly this is true all over the world, I’d say at least half of what we do is wasteful and unnecessary. If we remove the waste there would be plenty of money to pay people. But the reality is that we do a lot of things that are totally unnecessary, and if we are incentivised to not do things that are totally unnecessary, I think there would be plenty of money in the system.
Catalysis is currently involved in a healthcare leadership programme with three public hospitals in Gauteng. I understand you use remote coaching as a mechanism to carry out the programme. Can you tell us more about that work?
The CEOs that we are working with are committed to improvement and that in itself is incredibly powerful. They’re committed to learning, to changing their own behaviour and changing the way their organisations work. So if we go back to those five key behavioural traits that I talked about earlier, the first one is willingness – the willingness to change, the willingness to look at things differently and to learn new things, then I would say that my experience with them at this point is that they’re really willing to learn and make changes happen. Fortunately the Chairman of the Lean Institute Africa (LIA), Prof Norman Faull, can go in and see how they are doing on the ground. This model is an experiment in which we’re trying to determine whether or not a lot of this change can be delivered virtually, together with partners on the ground. But it starts with leaders that are willing to commit to doing the work to change. And so far I’ve been impressed that these leaders are serious about building an improvement culture in their hospitals.
We’re slowly moving towards universal health coverage in South Africa. Can you talk to us about what the healthcare leader’s role is in this period of transition and uncertainty?
I look at change in two ways: one is the change that happens that you have no control over, like when the government says you are going do X, Y, Z then that is what you do because in that case you simply need to comply. But within that there are also a lot of things that you can do that you do have control over, and one of those things is to build a hospital that has a culture of continuous improvement. Leaders should focus on what behavioural changes are going to be required on their part to build a culture where everybody becomes a problem solver every day. This way they can identify defects and remove them, just like Don Shilton’s nurses and doctors did in Ontario to make their hospital the safest in the country.
We should focus on what we can control, and we can control our own behaviour. We can control the willingness to learn, how to act, and how to behave differently to unleash the creativity of everyone in the organisation. You can’t predict the future; I don’t know what the next government’s going to do to healthcare, so what we focus on are the things that we know we can have some impact on. Ultimately our job is to improve patient care and improve the quality of the patient experience, and my advice to everyone in the industry is to focus on that and comply with whatever the government is trying to make you do. More often than not if you focus on improving the patient experience things turn out OK.
Let’s talk about the Lean Institute Healthcare Summit that’s coming up. What you will be sharing with the audience?
We have a number of learnings on what it takes to transform the organisation, so I’m going to talk about what we’ve learned in terms of what are those core elements of the transformation process that are working around the world. And then the second thing is really going to be focusing on these leadership traits, what’s important from the standpoint of developing excellence in everything you do in your organisation. I’m going to focus on the key traits that it takes to do that and with some examples from leaders that have been able to make the change so that people walk away with a roadmap to follow.
I think that the people that would benefit the most from the Lean Healthcare Summit are those that are interested in looking at patient-centred design and thinking about healthcare delivery from a value-based perspective rather than a FFS-based perspective. There are two elements that I see changing all over the world: the first is that we as healthcare providers becoming more focused on patient-centred design and secondly, governments and insurers are starting to look at value-based payments as the way that we’re going to get paid in the future. So if people are interested in those two topics they should definitely come to the event.
The Lean Healthcare Summit 2017: Empowering Healthcare Professionals Through Continuous Improvement will be taking place on 7th September 2017 at The Forum, Johannesburg. The one-day event will inspire the South African healthcare community by demonstrating the benefits of using lean management in healthcare, and motivate those already adopting lean management. More information about the event can be found here.