Sep 28, 2010
A few years ago, I read about a manufacturing company helping a hospital begin to look at lean. I asked an acquaintance at the company whether he thought that reaching out to healthcare by manufacturing lean experts would reduce the burdensome costs that employers bear for healthcare coverage. He said no, not until the insurance companies did something about their wasteful processes.
Now we have good evidence that insurers are getting in the game. The Michigan Lean Consortium had a chance this month to learn about how Blue Cross Blue Shield of Michigan (BCBSM) is conducting its continuous improvement program. BCBSM seems to have been smart about taking in some of the extraordinary improvement leaders who were shaken from Detroit's manufacturing industry. Phil Berry, after a career of continuous improvement leadership at Textron, joined BCBSM last year as Senior Director of Lean Continuous Improvement. He's building an able team of leaders, coaches, and learners who are taking processes apart and putting them back together.
The central staff group of BSBCM CI experts has now trained 230 change agents, usually group leaders and managers of operational groups. BCBSM is different from other insurers in that many of its employees are unionized. This means that they can't work on any activity that may result in decreased employment, although there are many other projects they can participate in. While we didn't hear from union representatives, we were told that conversations with union leaders started early in the process and that the union was on board, within the constraints of its duties to union members.
BCBSM offered buyouts a while ago and more people than expected took advantage of them, actually leaving open positions for which people could be hired. Despite being shorthanded, some departments working on lean focused on eliminating the need for the work itself. That motivated team members to eliminate overload caused by short staffing through improvements, and took away the fear that people would be faced with layoffs.
Now that teams were motivated by the need to reduce work to fit the resources available, they were ready to attack processes, with the support of their change agents and backed by the CI experts. The team that services the State of Michigan account is one example. Delays in responding to customers result in "aged cases," which contribute to the possibility of financial penalties for not meeting performance guarantees. Short one person due to the buyouts, the team was struggling to keep up. They attacked waste and bottlenecks, reduced reporting, improved workflow and consolidated responsibilities, which all added up to reduced turnaround time and saving $75,000.
The emphasis at BCBSM, however, is not on event-based improvements, but on culture change. I'm often bothered about what "culture change" means exactly, but we heard consistently what this meant. Training objectives were geared to a beginning stage of lean, but there is a longer term plan. The idea is to introduce principles, tools, and a common language, and a forum for practice. This evokes the definition of kaizen ("rapid improvements" at BCBSM) that I like best - a way to train the mind to constantly think how to improve. Teams do want to produce actual savings and improvement, and that's what helps get attention from traditional thinkers, but they are also building engagement and changing minds.
One practice used by all teams was a daily huddle in front of a team-created huddle board. Not only does this deal with daily issues, but it also works to sustain the team's forward motion. Cindy Lewis told us they are visual, 15-minute, tightly managed, crisp, well-prepared, and positive. Recently the CI team went through and evaluated teams' huddles and identified issues and training needs, feeding the findings back through managers.
BCBSM is also beginning to reach out to the providers -- the physicians who heal us and get payments from the insurer. They are no happier about coding confusion, rejected claims, and high costs than we are. They are beginning to hold joint projects to help on both sides.
The CI leaders recognize the importance of high-level buy-in, and the reality that it is hard to get. While the initiative has received strong support from on high, it will soon be time to start more training and education for VPs, presidents, and C-level executives in functions other than operations. We know that it is harder to bring them on board, but BCBSM seems to have a plan for that. Seeing how well-planned their strategy has been so far, and how carefully it is being deployed, I have a good feeling about that stage of development.
Posted by Karen Wilhelm