Virginia Mason Case

1 - What is Gary Kaplan trying to achieve at Virginia Mason?

Gary Kaplan was trying to achieve a profound change at Virginia Mason. He was focused on bringing the principals that were the basis to the creation of Virginia Mason in the beginning of the 20th century (provide the finest patient care by working collaboratively as a team). But, he has to achieve that in today's world basis, facing financial issues and competition forced by other healthcare institutes. In addition to these external problems, he faced a great internal problem: the employee's morale was in a declining route.

The main goal is differentiate against key competitors, through improvements in quality service (reduction of defects), work environment and Productivity (decreasing cost).

So, he had to sketch a plan to accomplish his goals and TPS seemed to be the best choice.

2 - What does the Toyota Production System fit into his Strategy?

Gary Kaplan discovers that Virginia Mason and Toyota objectives were aligned. Both companies were focused on customer satisfaction, quality and safety of their product/service.

It became obvious for him that this philosophy was the best choice to solve Virginia Mason problems.

Traditionally, VMMS tried to reduce costs by reducing academic spends and by reducing budgets of some business lines. With this kind of approach Virginia Mason goals are threatened, so TPS gives another way to reduce costs by reducing waste.

By definition, TPS identifies seven types of waste: waste of over production, over processing, movement, waiting time, material, space and defects. However the main focus is all about flow: information flow, physical flow, production flow, through standardized processes and continuous improvement.

In order to identify the sources of waste Kaplan used a very powerful tool: Value-stream mapping. With this tool Kaplan made his first diagnose: he collected valuable data that described the status of his medical center. With this approach it became possible to identify the value added tasks and eliminate all the other ones.

Without this first analysis, it would be impossible to identify the problems and to measure the gains obtained in the future.

Just like in Toyota, workshops and brainstorming were the key asset to the success. These meetings (involving all stakeholders) are very important to identify the major problems and to define the new standards of work.

The most important thing was to get people to believe in the process. To do so, Kaplan and Rona tried to engender full commitment from VMMC workforce, applying a no lay-off policy. With the efficiencies obtained it is possible to redeploy resources, providing education and training people for their new position. Kaplan was aware that these changes depended on all workers.

Using lean principles, staff, providers and patients have continuously improved or redesigned processes to eliminate waste, requiring fewer staff members and less rework, and resulting in better quality. Consequently, as employees retire or leave for other reasons, improved productivity allows for them not to be replaced.

The No-Layoff Policy is critical to the success of implementing lean management. People will more fully commit and engage in improvement work if they are not worried about improving themselves out of a job. Attrition, typically steady in health care, will enable most organizations to reassign staff to other necessary work. A culture shift is important here as well: Staff, especially in health care, do not typically view themselves as working for the organization, but for their individual department and/or care team. In lean thinking, the patient/customer