Saturday, December 7, 2013

Article 42. Health Care The Cheesecake Factory and Lean Teams

Comment by Lawrence Rosier Principal Management Consultant
This is a long article even for the New Yorker but the essence is that the author Atul Gawande discovered by comparing the quality of a leading restaurant chain with the Health Care industry one could get a better insight as to how to improve Health Care.  But what Atul Gawande missed is that he had never heard of Enterprise Lean Teams the tool that can fixes systems to get the highest quality, efficiency and effectiveness.  What the author needed was a method when applied would yield the same results as his long article.

Restaurant chains have managed to combine quality control, cost control, and innovation. Can health care? 
by August 13, 2012 Except from the New Yorker

Medicine has long resisted the productivity revolutions that transformed other industries. But the new chains aim to change this.



It was Saturday night, and I was at the local Cheesecake Factory with my two teen-age daughters and three of their friends. You may know the chain: a hundred and sixty restaurants with a catalogue-like menu that, when I did a count, listed three hundred and eight dinner items (including the forty-nine on the “Skinnylicious” menu), plus a hundred and twenty-four choices of beverage. It’s a linen-napkin-and-tablecloth sort of place, but with something for everyone. There’s wine and wasabi-crusted ahi tuna, but there’s also buffalo wings and Bud Light. The kids ordered mostly comfort food—pot stickers, mini crab cakes, teriyaki chicken, Hawaiian pizza, pasta carbonara. I got a beet salad with goat cheese, white-bean hummus and warm flatbread, and the miso salmon.

The place is huge, but it’s invariably packed, and you can see why. The typical entrée is under fifteen dollars. The décor is fancy, in an accessible, Disney-cruise-ship sort of way: faux Egyptian columns, earth-tone murals, vaulted ceilings. The waiters are efficient and friendly. They wear all white (crisp white oxford shirt, pants, apron, sneakers) and try to make you feel as if it were a special night out. As for the food—can I say this without losing forever my chance of getting a reservation at Per Se?—it was delicious.

The chain serves more than eighty million people per year. I pictured semi-frozen bags of beet salad shipped from Mexico, buckets of precooked pasta and production-line hummus, fish from a box. And yet nothing smacked of mass production. My beets were crisp and fresh, the hummus creamy, the salmon like butter in my mouth. No doubt everything we ordered was sweeter, fattier, and bigger than it had to be. But the Cheesecake Factory knows its customers. The whole table was happy (with the possible exception of Ethan, aged sixteen, who picked the onions out of his Hawaiian pizza).

I wondered how they pulled it off. I asked one of the Cheesecake Factory line cooks how much of the food was premade. He told me that everything’s pretty much made from scratch—except the cheesecake, which actually is from a cheesecake factory, in Calabasas, California.

I’d come from the hospital that day. In medicine, too, we are trying to deliver a range of services to millions of people at a reasonable cost and with a consistent level of quality. Unlike the Cheesecake Factory, we haven’t figured out how. Our costs are soaring, the service is typically mediocre, and the quality is unreliable. Every clinician has his or her own way of doing things, and the rates of failure and complication (not to mention the costs) for a given service routinely vary by a factor of two or three, even within the same hospital.

It’s easy to mock places like the Cheesecake Factory—restaurants that have brought chain production to complicated sit-down meals. But the “casual dining sector,” as it is known, plays a central role in the ecosystem of eating, providing three-course, fork-and-knife restaurant meals that most people across the country couldn’t previously find or afford. The ideas start out in élite, upscale restaurants in major cities. You could think of them as research restaurants, akin to research hospitals. Some of their enthusiasms—miso salmon, Chianti-braised short ribs, flourless chocolate espresso cake—spread to other high-end restaurants. Then the casual-dining chains reëngineer them for affordable delivery to millions. Does health care need something like this?

Big chains thrive because they provide goods and services of greater variety, better quality, and lower cost than would otherwise be available. Size is the key. It gives them buying power, lets them centralize common functions, and allows them to adopt and diffuse innovations faster than they could if they were a bunch of small, independent operations. Such advantages have made Walmart the most successful retailer on earth. Pizza Hut alone runs one in eight pizza restaurants in the country. The Cheesecake Factory’s major competitor, Darden, owns Olive Garden, LongHorn Steakhouse, Red Lobster, and the Capital Grille; it has more than two thousand restaurants across the country and employs more than a hundred and eighty thousand people. We can bristle at the idea of chains and mass production, with their homogeneity, predictability, and constant genuflection to the value-for-money god. Then you spend a bad night in a “quaint” “one of a kind” bed-and-breakfast that turns out to have a manic, halitoxic innkeeper who can’t keep the hot water running, and it’s right back to the Hyatt.

Medicine, though, had held out against the trend. Physicians were always predominantly self-employed, working alone or in small private-practice groups. American hospitals tended to be community-based. But that’s changing. Hospitals and clinics have been forming into large conglomerates. And physicians—facing escalating demands to lower costs, adopt expensive information technology, and account for performance—have been flocking to join them. According to the Bureau of Labor Statistics, only a quarter of doctors are self-employed—an extraordinary turnabout from a decade ago, when a majority were independent. They’ve decided to become employees, and health systems have become chains.

I’m no exception. I am an employee of an academic, nonprofit health system called Partners Health Care, which owns the Brigham and Women’s Hospital and the Massachusetts General Hospital, along with seven other hospitals, and is affiliated with dozens of clinics around eastern Massachusetts. Partners has sixty thousand employees, including six thousand doctors. Our competitors include CareGroup, a system of five regional hospitals, and a new for-profit chain called the Steward Health Care System.

Big chains thrive because they provide goods and services of greater variety, better quality, and lower cost than would otherwise be available. Size is the key. It gives them buying power, lets them centralize common functions, and allows them to adopt and diffuse innovations faster than they could if they were a bunch of small, independent operations. Such advantages have made Walmart the most successful retailer on earth. Pizza Hut alone runs one in eight pizza restaurants in the country. The Cheesecake Factory’s major competitor, Darden, owns Olive Garden, LongHorn Steakhouse, Red Lobster, and the Capital Grille; it has more than two thousand restaurants across the country and employs more than a hundred and eighty thousand people. We can bristle at the idea of chains and mass production, with their homogeneity, predictability, and constant genuflection to the value-for-money god. Then you spend a bad night in a “quaint” “one of a kind” bed-and-breakfast that turns out to have a manic, halitoxic innkeeper who can’t keep the hot water running, and it’s right back to the Hyatt.

Medicine, though, had held out against the trend. Physicians were always predominantly self-employed, working alone or in small private-practice groups. American hospitals tended to be community-based. But that’s changing. Hospitals and clinics have been forming into large conglomerates. And physicians—facing escalating demands to lower costs, adopt expensive information technology, and account for performance—have been flocking to join them. According to the Bureau of Labor Statistics, only a quarter of doctors are self-employed—an extraordinary turnabout from a decade ago, when a majority were independent. They’ve decided to become employees, and health systems have become chains.

I’m no exception. I am an employee of an academic, nonprofit health system called Partners Health Care, which owns the Brigham and Women’s Hospital and the Massachusetts General Hospital, along with seven other hospitals, and is affiliated with dozens of clinics around eastern Massachusetts. Partners has sixty thousand employees, including six thousand doctors. Our competitors include CareGroup, a system of five regional hospitals, and a new for-profit chain called the Steward Health Care System.

Steward was launched in late 2010, when Cerberus—the multibillion-dollar private-investment firm—bought a group of six failing Catholic hospitals in the Boston area for nine hundred million dollars. Many people were shocked that the Catholic Church would allow a corporate takeover of its charity hospitals. But the hospitals, some of which were more than a century old, had been losing money and patients, and Cerberus is one of those firms which specialize in turning around distressed businesses.
Cerberus has owned controlling stakes in Chrysler and GMAC Financing and currently has stakes in Albertsons grocery stories, one of Austria’s largest retail bank chains, and the Freedom Group, which it built into one of the biggest gun-and-ammunition manufacturers in the world. When it looked at the Catholic hospitals, it saw another opportunity to create profit through size and efficiency. In the past year, Steward bought four more Massachusetts hospitals and made an offer to buy six financially troubled hospitals in south Florida. It’s trying to create what some have called the Southwest Airlines of health care—a network of high-quality hospitals that would appeal to a more cost-conscious public.

Steward’s aggressive growth has made local doctors like me nervous. But many health systems, for-profit and not-for-profit, share its goal: large-scale, production-line medicine. The way medical care is organized is changing—because the way we pay for it is changing.

Historically, doctors have been paid for services, not results. In the eighteenth century B.C., Hammurabi’s code instructed that a surgeon be paid ten shekels of silver every time he performed a procedure for a patrician—opening an abscess or treating a cataract with his bronze lancet. It also instructed that if the patient should die or lose an eye, the surgeon’s hands be cut off. Apparently, the Mesopotamian surgeons’ lobby got this results clause dropped. Since then, we’ve generally been paid for what we do, whatever happens. The consequence is the system we have, with plenty of individual transactions—procedures, tests, specialist consultations—and uncertain attention to how the patient ultimately fares.

Health-care reforms—public and private—have sought to reshape that system. This year, my employer’s new contracts with Medicare, BlueCross BlueShield, and others link financial reward to clinical performance. The more the hospital exceeds its cost-reduction and quality-improvement targets, the more money it can keep. If it misses the targets, it will lose tens of millions of dollars. This is a radical shift. Until now, hospitals and medical groups have mainly had a landlord-tenant relationship with doctors. They offered us space and facilities, but what we tenants did behind closed doors was our business. Now it’s their business, too.

The theory the country is about to test is that chains will make us better and more efficient. The question is how. To most of us who work in health care, throwing a bunch of administrators and accountants into the mix seems unlikely to help. Good medicine can’t be reduced to a recipe.

Then again neither can good food: every dish involves attention to detail and individual adjustments that require human judgment. Yet, some chains manage to achieve good, consistent results thousands of times a day across the entire country. I decided to get inside one and find out how they did it.

Dave Luz is the regional manager for the eight Cheesecake Factories in the Boston area. He oversees operations that bring in eighty million dollars in yearly revenue, about as much as a medium-sized hospital. Luz (rhymes with “fuzz”) is forty-seven, and had started out in his twenties waiting tables at a Cheesecake Factory restaurant in Los Angeles. He was writing screenplays, but couldn’t make a living at it. When he and his wife hit thirty and had their second child, they came back east to Boston to be closer to family. He decided to stick with the Cheesecake Factory. Luz rose steadily, and made a nice living. “I wanted to have some business skills,” he said—he started a film-production company on the side—“and there was no other place I knew where you could go in, know nothing, and learn top to bottom how to run a business.”

To show me how a Cheesecake Factory works, he took me into the kitchen of his busiest restaurant, at Prudential Center, a shopping and convention hub. The kitchen design is the same in every restaurant, he explained. It’s laid out like a manufacturing facility, in which raw materials in the back of the plant come together as a finished product that rolls out the front. Along the back wall are the walk-in refrigerators and prep stations, where half a dozen people stood chopping and stirring and mixing. The next zone is where the cooking gets done—two parallel lines of countertop, forty-some feet long and just three shoe-lengths apart, with fifteen people pivoting in place between the stovetops and grills on the hot side and the neatly laid-out bins of fixings (sauces, garnishes, seasonings, and the like) on the cold side. The prep staff stock the pullout drawers beneath the counters with slabs of marinated meat and fish, serving-size baggies of pasta and crabmeat, steaming bowls of brown rice and mashed potatoes. Basically, the prep crew handles the parts, and the cooks do the assembly.

Computer monitors positioned head-high every few feet flashed the orders for a given station. Luz showed me the touch-screen tabs for the recipe for each order and a photo showing the proper presentation. The recipe has the ingredients on the left part of the screen and the steps on the right. A timer counts down to a target time for completion. The background turns from green to yellow as the order nears the target time and to red when it has exceeded it.

I watched Mauricio Gaviria at the broiler station as the lunch crowd began coming in. Mauricio was twenty-nine years old and had worked there eight years. He’d got his start doing simple prep—chopping vegetables—and worked his way up to fry cook, the pasta station, and now the sauté and broiler stations. He bounced in place waiting for the pace to pick up. An order for a “hibachi” steak popped up. He tapped the screen to open the order: medium-rare, no special requests. A ten-minute timer began. He tonged a fat hanger steak soaking in teriyaki sauce onto the broiler and started a nest of sliced onions cooking beside it. While the meat was grilling, other orders arrived: a Kobe burger, a blue-cheese B.L.T. burger, three “old-fashioned” burgers, five veggie burgers, a “farmhouse” burger, and two Thai chicken wraps. Tap, tap, tap. He got each of them grilling.
I brought up the hibachi-steak recipe on the screen. There were instructions to season the steak, sauté the onions, grill some mushrooms, slice the meat, place it on the bed of onions, pile the mushrooms on top, garnish with parsley and sesame seeds, heap a stack of asparagus tempura next to it, shape a tower of mashed potatoes alongside, drop a pat of wasabi butter on top, and serve.
Two things struck me. First, the instructions were precise about the ingredients and the objectives (the steak slices were to be a quarter of an inch thick, the presentation just so), but not about how to get there. The cook has to decide how much to salt and baste, how to sequence the onions and mushrooms and meat so they’re done at the same time, how to swivel from grill to countertop and back, sprinkling a pinch of salt here, flipping a burger there, sending word to the fry cook for the asparagus tempura, all the while keeping an eye on the steak. In producing complicated food, there might be recipes, but there was also a substantial amount of what’s called “tacit knowledge”—knowledge that has not been reduced to instructions.
Second, Mauricio never looked at the instructions anyway. By the time I’d finished reading the steak recipe, he was done with the dish and had plated half a dozen others. “Do you use this recipe screen?” I asked.

“No. I have the recipes right here,” he said, pointing to his baseball-capped head.

He put the steak dish under warming lights, and tapped the screen to signal the servers for pickup. But before the dish was taken away, the kitchen manager stopped to look, and the system started to become clearer. He pulled a clean fork out and poked at the steak. Then he called to Mauricio and the two other cooks manning the grill station.

“Gentlemen,” he said, “this steak is perfect.” It was juicy and pink in the center, he said. “The grill marks are excellent.” The sesame seeds and garnish were ample without being excessive. “But the tower is too tight.” I could see what he meant. The mashed potatoes looked a bit like something a kid at the beach might have molded with a bucket. You don’t want the food to look manufactured, he explained. Mauricio fluffed up the potatoes with a fork.

I watched the kitchen manager for a while. At every Cheesecake Factory restaurant, a kitchen manager is stationed at the counter where the food comes off the line, and he rates the food on a scale of one to ten. A nine is near-perfect. An eight requires one or two corrections before going out to a guest. A seven needs three. A six is unacceptable and has to be redone. This inspection process seemed a tricky task. No one likes to be second-guessed. The kitchen manager prodded gently, being careful to praise as often as he corrected. (“Beautiful. Beautiful!” “The pattern of this pesto glaze is just right.”) But he didn’t hesitate to correct.
“We’re getting sloppy with the plating,” he told the pasta station. He was unhappy with how the fry cooks were slicing the avocado spring rolls. “Gentlemen, a half-inch border on this next time.” He tried to be a coach more than a policeman. “Is this three-quarters of an ounce of Parm-Romano?”

And that seemed to be the spirit in which the line cooks took him and the other managers. The managers had all risen through the ranks. This earned them a certain amount of respect. They in turn seemed respectful of the cooks’ skills and experience. Still, the oversight is tight, and this seemed crucial to the success of the enterprise.

The managers monitored the pace, too—scanning the screens for a station stacking up red flags, indicating orders past the target time, and deciding whether to give the cooks at the station a nudge or an extra pair of hands. They watched for waste—wasted food, wasted time, wasted effort. The formula was Business 101: Use the right amount of goods and labor to deliver what customers want and no more. Anything more is waste, and waste is lost profit.

I spoke to David Gordon, the company’s chief operating officer. He told me that the Cheesecake Factory has worked out a staff-to-customer ratio that keeps everyone busy but not so busy that there’s no slack in the system in the event of a sudden surge of customers. More difficult is the problem of wasted food. Although the company buys in bulk from regional suppliers, groceries are the biggest expense after labor, and the most unpredictable. Everything—the chicken, the beef, the lettuce, the eggs, and all the rest—has a shelf life. If a restaurant were to stock too much, it could end up throwing away hundreds of thousands of dollars’ worth of food. If a restaurant stocks too little, it will have to tell customers that their favorite dish is not available, and they may never come back. Groceries, Gordon said, can kill a restaurant.
The company’s target last year was at least 97.5-per-cent efficiency: the managers aimed at throwing away no more than 2.5 per cent of the groceries they bought, without running out. This seemed to me an absurd target. Achieving it would require knowing in advance almost exactly how many customers would be coming in and what they were going to want, then insuring that the cooks didn’t spill or toss or waste anything. Yet this is precisely what the organization has learned to do. The chain-restaurant industry has produced a field of computer analytics known as “guest forecasting.”

“We have forecasting models based on historical data—the trend of the past six weeks and also the trend of the previous year,” Gordon told me. “The predictability of the business has become astounding.” The company has even learned how to make adjustments for the weather or for scheduled events like playoff games that keep people at home.

A computer program known as Net Chef showed Luz that for this one restaurant food costs accounted for 28.73 per cent of expenses the previous week. It also showed exactly how many chicken breasts were ordered that week ($1,614 worth), the volume sold, the volume on hand, and how much of last week’s order had been wasted (three dollars’ worth). Chain production requires control, and they’d figured out how to achieve it on a mass scale.

As a doctor, I found such control alien—possibly from a hostile planet. We don’t have patient forecasting in my office, push-button waste monitoring, or such stringent, hour-by-hour oversight of the work we do, and we don’t want to. I asked Luz if he had ever thought about the contrast when he went to see a doctor. We were standing amid the bustle of the kitchen, and the look on his face shifted before he answered.

“I have,” he said. His mother was seventy-eight. She had early Alzheimer’s disease, and required a caretaker at home. Getting her adequate medical care was, he said, a constant battle.
Recently, she’d had a fall, apparently after fainting, and was taken to a local emergency room. The doctors ordered a series of tests and scans, and kept her overnight. They never figured out what the problem was. Luz understood that sometimes explanations prove elusive. But the clinicians didn’t seem to be following any coördinated plan of action. The emergency doctor told the family one plan, the admitting internist described another, and the consulting specialist a third. Thousands of dollars had been spent on tests, but nobody ever told Luz the results.

A nurse came at ten the next morning and said that his mother was being discharged. But his mother’s nurse was on break, and the discharge paperwork with her instructions and prescriptions hadn’t been done. So they waited. Then the next person they needed was at lunch. It was as if the clinicians were the customers, and the patients’ job was to serve them. “We didn’t get to go until 6 P.M., with a tired, disabled lady and a long drive home.” Even then she still had to be changed out of her hospital gown and dressed. Luz pressed the call button to ask for help. No answer. He went out to the ward desk.

The aide was on break, the secretary said. “Don’t you dress her yourself at home?” He explained that he didn’t, and made a fuss.
An aide was sent. She was short with him and rough in changing his mother’s clothes. “She was manhandling her,” Luz said. “I felt like, ‘Stop. I’m not one to complain. I respect what you do enormously. But if there were a video camera in here, you’d be on the evening news.’ I sent her out. I had to do everything myself. I’m stuffing my mom’s boob in her bra. It was unbelievable.”

His mother was given instructions to check with her doctor for the results of cultures taken during her stay, for a possible urinary-tract infection. But when Luz tried to follow up, he couldn’t get through to her doctor for days. “Doctors are busy,” he said. “I get it. But come on.” An office assistant finally told him that the results wouldn’t be ready for another week and that she was to see a neurologist. No explanations. No chance to ask questions.

The neurologist, after giving her a two-minute exam, suggested tests that had already been done and wrote a prescription that he admitted was of doubtful benefit. Luz’s family seemed to encounter this kind of disorganization, imprecision, and waste wherever his mother went for help.

“It is unbelievable to me that they would not manage this better,” Luz said. I asked him what he would do if he were the manager of a neurology unit or a cardiology clinic. “I don’t know anything about medicine,” he said. But when I pressed he thought for a moment, and said, “This is pretty obvious. I’m sure you already do it. But I’d study what the best people are doing, figure out how to standardize it, and then bring it to everyone to execute.”
This is not at all the normal way of doing things in medicine. (“You’re scaring me,” he said, when I told him.) But it’s exactly what the new health-care chains are now hoping to do on a mass scale. They want to create Cheesecake Factories for health care. The question is whether the medical counterparts to Mauricio at the broiler station—the clinicians in the operating rooms, in the medical offices, in the intensive-care units—will go along with the plan. Fixing a nice piece of steak is hardly of the same complexity as diagnosing the cause of an elderly patient’s loss of consciousness. Doctors and patients have not had a positive experience with outsiders second-guessing decisions. How will they feel about managers trying to tell them what the “best practices” are?

In March, my mother underwent a total knee replacement, like at least six hundred thousand Americans each year. She’d had a partial knee replacement a decade ago, when arthritis had worn away part of the cartilage, and for a while this served her beautifully. The surgeon warned, however, that the results would be temporary, and about five years ago the pain returned.
She’s originally from Ahmadabad, India, and has spent three decades as a pediatrician, attending to the children of my small Ohio home town. She’s chatty. She can’t go through a grocery checkout line or get pulled over for speeding without learning people’s names and a little bit about them. But she didn’t talk about her mounting pain. I noticed, however, that she had developed a pronounced limp and had become unable to walk even moderate distances. When I asked her about it, she admitted that just getting out of bed in the morning was an ordeal. Her doctor showed me her X-rays. Her partial prosthesis had worn through the bone on the lower surface of her knee. It was time for a total knee replacement.

This past winter, she finally stopped putting it off, and asked me to find her a surgeon. I wanted her to be treated well, in both the technical and the human sense. I wanted a place where everyone and everything—from the clinic secretary to the physical therapists—worked together seamlessly.

My mother planned to come to Boston, where I live, for the surgery so she could stay with me during her recovery. (My father died last year.) Boston has three hospitals in the top rank of orthopedic surgery. But even a doctor doesn’t have much to go on when it comes to making a choice. A place may have a great reputation, but it’s hard to know about actual quality of care. Unlike some countries, the United States doesn’t have a monitoring system that tracks joint-replacement statistics. Even within an institution, I found, surgeons take strikingly different approaches. They use different makes of artificial joints, different kinds of anesthesia, different regimens for post-surgical pain control and physical therapy.

In the absence of information, I went with my own hospital, the Brigham and Women’s Hospital. Our big-name orthopedic surgeons treat Olympians and professional athletes. Nine of them do knee replacements. Of most interest to me, however, was a surgeon who was not one of the famous names. He has no national recognition. But he has led what is now a decade-long experiment in standardizing joint-replacement surgery.
John Wright is a New Zealander in his late fifties. He’s a tower crane of a man, six feet four inches tall, and so bald he barely seems to have eyebrows. He’s informal in attire—I don’t think I’ve ever seen him in a tie, and he is as apt to do rounds in his zip-up anorak as in his white coat—but he exudes competence.
“Customization should be five per cent, not ninety-five per cent, of what we do,” he told me. A few years ago, he gathered a group of people from every specialty involved—surgery, anesthesia, nursing, physical therapy—to formulate a single default way of doing knee replacements. They examined every detail, arguing their way through their past experiences and whatever evidence they could find. Essentially, they did what Luz considered the obvious thing to do: they studied what the best people were doing, figured out how to standardize it, and then tried to get everyone to follow suit.

They came up with a plan for anesthesia based on research studies—including giving certain pain medications before the patient entered the operating room and using spinal anesthesia plus an injection of local anesthetic to block the main nerve to the knee. They settled on a postoperative regimen, too. The day after a knee replacement, most orthopedic surgeons have their patients use a continuous passive-motion machine, which flexes and extends the knee as they lie in bed. Large-scale studies, though, have suggested that the machines don’t do much good. Sure enough, when the members of Wright’s group examined their own patients, they found that the ones without the machine got out of bed sooner after surgery, used less pain medication, and had more range of motion at discharge. So Wright instructed the hospital to get rid of the machines, and to use the money this saved (ninety thousand dollars a year) to pay for more physical therapy, something that is proven to help patient mobility. Therapy, starting the day after surgery, would increase from once to twice a day, including weekends.

Even more startling, Wright had persuaded the surgeons to accept changes in the operation itself; there was now, for instance, a limit as to which prostheses they could use. Each of our nine knee-replacement surgeons had his preferred type and brand. Knee surgeons are as particular about their implants as professional tennis players are about their racquets. But the hardware is easily the biggest cost of the operation—the average retail price is around eight thousand dollars, and some cost twice that, with no solid evidence of real differences in results.
Knee implants were largely perfected a quarter century ago. By the nineteen-nineties, studies showed that, for some ninety-five per cent of patients, the implants worked magnificently a decade after surgery. Evidence from the Australian registry has shown that not a single new knee or hip prosthesis had a lower failure rate than that of the established prostheses. Indeed, thirty per cent of the new models were likelier to fail. Like others on staff, Wright has advised companies on implant design. He believes that innovation will lead to better implants. In the meantime, however, he has sought to limit the staff to the three lowest-cost knee implants.

These have been hard changes for many people to accept. Wright has tried to figure out how to persuade clinicians to follow the standardized plan. To prevent revolt, he learned, he had to let them deviate at times from the default option. Surgeons could still order a passive-motion machine or a preferred prosthesis. “But I didn’t make it easy,” Wright said. The surgeons had to enter the treatment orders in the computer themselves. To change or add an implant, a surgeon had to show that the performance was superior or the price at least as low.

I asked one of his orthopedic colleagues, a surgeon named John Ready, what he thought about Wright’s efforts. Ready was philosophical. He recognized that the changes were improvements, and liked most of them. But he wasn’t happy when Wright told him that his knee-implant manufacturer wasn’t matching the others’ prices and would have to be dropped.
“It’s not ideal to lose my prosthesis,” Ready said. “I could make the switch. The differences between manufacturers are minor. But there’d be a learning curve.” Each implant has its quirks—how you seat it, what tools you use. “It’s probably a ten-case learning curve for me.” Wright suggested that he explain the situation to the manufacturer’s sales rep. “I’m my rep’s livelihood,” Ready said. “He probably makes five hundred dollars a case from me.” Ready spoke to his rep. The price was dropped.
Wright has become the hospital’s kitchen manager—not always a pleasant role. He told me that about half of the surgeons appreciate what he’s doing. The other half tolerate it at best. One or two have been outright hostile. But he has persevered, because he’s gratified by the results. The surgeons now use a single manufacturer for seventy-five per cent of their implants, giving the hospital bargaining power that has helped slash its knee-implant costs by half. And the start-to-finish standardization has led to vastly better outcomes. The distance patients can walk two days after surgery has increased from fifty-three to eighty-five feet. Nine out of ten could stand, walk, and climb at least a few stairs independently by the time of discharge. The amount of narcotic pain medications they required fell by a third. They could also leave the hospital nearly a full day earlier on average (which saved some two thousand dollars per patient).
My mother was one of the beneficiaries. She had insisted to Dr. Wright that she would need a week in the hospital after the operation and three weeks in a rehabilitation center. That was what she’d required for her previous knee operation, and this one was more extensive.

“We’ll see,” he told her.
The morning after her operation, he came in and told her that he wanted her getting out of bed, standing up, and doing a specific set of exercises he showed her. “He’s pushy, if you want to say it that way,” she told me. The physical therapists and nurses were, too. They were a team, and that was no small matter. I counted sixty-three different people involved in her care. Nineteen were doctors, including the surgeon and chief resident who assisted him, the anesthesiologists, the radiologists who reviewed her imaging scans, and the junior residents who examined her twice a day and adjusted her fluids and medications. Twenty-three were nurses, including her operating-room nurses, her recovery-room nurse, and the many ward nurses on their eight-to-twelve-hour shifts. There were also at least five physical therapists; sixteen patient-care assistants, helping check her vital signs, bathe her, and get her to the bathroom; plus X-ray and EKG technologists, transport workers, nurse practitioners, and physician assistants. I didn’t even count the bioengineers who serviced the equipment used, the pharmacists who dispensed her medications, or the kitchen staff preparing her food while taking into account her dietary limitations. They all had to coördinate their contributions, and they did.

Three days after her operation, she was getting in and out of bed on her own. She was on virtually no narcotic medication. She was starting to climb stairs. Her knee pain was actually less than before her operation. She left the hospital for the rehabilitation center that afternoon.

The biggest complaint that people have about health care is that no one ever takes responsibility for the total experience of care, for the costs, and for the results. My mother experienced what happens in medicine when someone takes charge. Of course, John Wright isn’t alone in trying to design and implement this kind of systematic care, in joint surgery and beyond. The Virginia Mason Medical Center, in Seattle, has done it for knee surgery and cancer care; the Geisinger Health Center, in Pennsylvania, has done it for cardiac surgery and primary care; the University of Michigan Health System standardized how its doctors give blood transfusions to patients, reducing the need for transfusions by thirty-one per cent and expenses by two hundred thousand dollars a month. Yet, unless such programs are ramped up on a nationwide scale, they aren’t going to do much to improve health care for most people or reduce the explosive growth of health-care costs.

In medicine, good ideas still take an appallingly long time to trickle down. Recently, the American Academy of Neurology and the American Headache Society released new guidelines for migraine-headache-treatment. They recommended treating severe migraine sufferers—who have more than six attacks a month—with preventive medications and listed several drugs that markedly reduce the occurrence of attacks. The authors noted, however, that previous guidelines going back more than a decade had recommended such remedies, and doctors were still not providing them to more than two-thirds of patients. One study examined how long it took several major discoveries, such as the finding that the use of beta-blockers after a heart attack improves survival, to reach even half of Americans. The answer was, on average, more than fifteen years.

Scaling good ideas has been one of our deepest problems in medicine. Regulation has had its place, but it has proved no more likely to produce great medicine than food inspectors are to produce great food. During the era of managed care, insurance-company reviewers did hardly any better. We’ve been stuck. But do we have to be?

Every six months, the Cheesecake Factory puts out a new menu. This means that everyone who works in its restaurants expects to learn something new twice a year. The March, 2012, Cheesecake Factory menu included thirteen new items. The teaching process is now finely honed: from start to finish, rollout takes just seven weeks.

The ideas for a new dish, or for tweaking an old one, can come from anywhere. One of the Boston prep cooks told me about an idea he once had that ended up in a recipe. David Overton, the founder and C.E.O. of the Cheesecake Factory, spends much of his time sampling a range of cuisines and comes up with many dishes himself. All the ideas, however, go through half a dozen chefs in the company’s test kitchen, in Calabasas. They figure out how to make each recipe reproducible, appealing, and affordable. Then they teach the new recipe to the company’s regional managers and kitchen managers.

Dave Luz, the Boston regional manager, went to California for training this past January with his chief kitchen manager, Tom Schmidt, a chef with fifteen years’ experience. They attended lectures, watched videos, participated in workshops. It sounded like a surgical conference. Where I might be taught a new surgical technique, they were taught the steps involved in preparing a “Santorini farro salad.” But there was a crucial difference. The Cheesecake instructors also trained the attendees how to teach what they were learning. In medicine, we hardly ever think about how to implement what we’ve learned. We learn what we want to, when we want to.

On the first training day, the kitchen managers worked their way through thirteen stations, preparing each new dish, and their performances were evaluated. The following day, they had to teach their regional managers how to prepare each dish—Schmidt taught Luz—and this time the instructors assessed how well the kitchen managers had taught.

The managers returned home to replicate the training session for the general manager and the chief kitchen manager of every restaurant in their region. The training at the Boston Prudential Center restaurant took place on two mornings, before the lunch rush. The first day, the managers taught the kitchen staff the new menu items. There was a lot of poring over the recipes and videos and fussing over the details. The second day, the cooks made the new dishes for the servers. This gave the cooks some practice preparing the food at speed, while allowing the servers to learn the new menu items. The dishes would go live in two weeks. I asked a couple of the line cooks how long it took them to learn to make the new food.

“I know it already,” one said.
“I make it two times, and that’s all I need,” the other said.
Come on, I said. How long before they had it down pat?
“One day,” they insisted. “It’s easy.”

I asked Schmidt how much time he thought the cooks required to master the recipes. They thought a day, I told him. He grinned. “More like a month,” he said.

Even a month would be enviable in medicine, where innovations commonly spread at a glacial pace. The new health-care chains, though, are betting that they can change that, in much the same way that other chains have.

 Rmin Ernst is responsible for intensive-care-unit operations in Steward’s ten hospitals. The I.C.U.s he oversees serve some eight thousand patients a year. In another era, an I.C.U. manager would have been a facilities expert. He would have spent his time making sure that the equipment, electronics, pharmacy resources, and nurse staffing were up to snuff. He would have regarded the I.C.U. as the doctors’ workshop, and he would have wanted to give them the best possible conditions to do their work as they saw fit.

Ernst, though, is a doctor—a new kind of doctor, whose goal is to help disseminate good ideas. He doesn’t see the I.C.U. as a doctors’ workshop. He sees it as the temporary home of the sickest, most fragile people in the country. Nowhere in health care do we expend more resources. Although fewer than one in four thousand Americans are in intensive care at any given time, they account for four per cent of national health-care costs. Ernst believes that his job is to make sure that everyone is collaborating to provide the most effective and least wasteful care possible.

He looked like a regular doctor to me. Ernst is fifty years old, a native German who received his medical degree at the University of Heidelberg before training in pulmonary and critical-care medicine in the United States. He wears a white hospital coat and talks about drips and ventilator settings, like any other critical-care specialist. But he doesn’t deal with patients: he deals with the people who deal with patients.

Ernst says he’s not telling clinicians what to do. Instead, he’s trying to get clinicians to agree on precise standards of care, and then make sure that they follow through on them. (The word “consensus” comes up a lot.) What I didn’t understand was how he could enforce such standards in ten hospitals across three thousand square miles.

Late one Friday evening, I joined an intensive-care-unit team on night duty. But this team was nowhere near a hospital. We were in a drab one-story building behind a meat-trucking facility outside of Boston, in a back section that Ernst called his I.C.U. command center. It was outfitted with millions of dollars’ worth of technology. Banks of computer screens carried a live feed of cardiac-monitor readings, radiology-imaging scans, and laboratory results from I.C.U. patients throughout Steward’s hospitals. Software monitored the stream and produced yellow and red alerts when it detected patterns that raised concerns. Doctors and nurses manned consoles where they could toggle on high-definition video cameras that allowed them to zoom into any I.C.U. room and talk directly to the staff on the scene or to the patients themselves.

The command center was just a few months old. The team had gone live in only four of the ten hospitals. But in the next several months Ernst’s “tele-I.C.U.” team will have the ability to monitor the care for every patient in every I.C.U. bed in the Steward health-care system.

A doctor, two nurses, and an administrative assistant were on duty in the command center each night I visited. Christina Monti was one of the nurses. A pixie-like thirty-year-old with nine years’ experience as a cardiac intensive-care nurse, she was covering Holy Family Hospital, on the New Hampshire border, and St. Elizabeth’s Medical Center, in Boston’s Brighton neighborhood. When I sat down with her, she was making her rounds, virtually.
First, she checked on the patients she had marked as most critical. She reviewed their most recent laboratory results, clinical notes, and medication changes in the electronic record. Then she made a “visit,” flicking on the two-way camera and audio system. If the patients were able to interact, she would say hello to them in their beds. She asked the staff members whether she could do anything for them. The tele-I.C.U. team provided the staff with extra eyes and ears when needed. If a crashing patient diverts the staff’s attention, the members of the remote team can keep an eye on the other patients. They can handle computer paperwork if a nurse falls behind; they can look up needed clinical information. The hospital staff have an OnStar-like button in every room that they can push to summon the tele-I.C.U. team.
Monti also ran through a series of checks for each patient. She had a reference list of the standards that Ernst had negotiated with the people running the I.C.U.s, and she looked to see if they were being followed. The standards covered basics, from hand hygiene to measures for stomach-ulcer prevention. In every room with a patient on a respirator, for instance, Monti made sure the nurse had propped the head of the bed up at least thirty degrees, which makes pneumonia less likely. She made sure the breathing tube in the patient’s mouth was secure, to reduce the risk of the tube’s falling out or becoming disconnected. She zoomed in on the medication pumps to check that the drips were dosed properly. She was not looking for bad nurses or bad doctors. She was looking for the kinds of misses that even excellent nurses and doctors can make under pressure.

The concept of the remote I.C.U. started with an effort to let specialists in critical-care medicine, who are in short supply, cover not just one but several community hospitals. Two hundred and fifty hospitals from Alaska to Virginia have installed a version of the tele-I.C.U. It produced significant improvements in outcomes and costs—and, some discovered, a means of driving better practices even in hospitals that had specialists on hand.
After five minutes of observation, however, I realized that the remote I.C.U. team wasn’t exactly in command; it was in negotiation. I observed Monti perform a video check on a middle-aged man who had just come out of heart surgery. A soft chime let the people in the room know she was dropping in. The man was unconscious, supported by a respirator and intravenous drips. At his bedside was a nurse hanging a bag of fluid. She seemed to stiffen at the chime’s sound.

“Hi,” Monti said to her. “I’m Chris. Just making my evening rounds. How are you?” The bedside nurse gave the screen only a sidelong glance.

Ernst wasn’t oblivious of the issue. He had taken pains to introduce the command center’s team, spending weeks visiting the units and bringing doctors and nurses out to tour the tele-I.C.U. before a camera was ever turned on. But there was no escaping the fact that these were strangers peering over the staff’s shoulders. The bedside nurse’s chilliness wasn’t hard to understand.

In a single hour, however, Monti had caught a number of problems. She noticed, for example, that a patient’s breathing tube had come loose. Another patient wasn’t getting recommended medication to prevent potentially fatal blood clots. Red alerts flashed on the screen—a patient with an abnormal potassium level that could cause heart-rhythm problems, another with a sudden leap in heart rate.

Monti made sure that the team wasn’t already on the case and that the alerts weren’t false alarms. Checking the computer, she figured out that a doctor had already ordered a potassium infusion for the woman with the low level. Flipping on a camera, she saw that the patient with the high heart rate was just experiencing the stress of being helped out of bed for the first time after surgery. But the unsecured breathing tube and the forgotten blood-clot medication proved to be oversights. Monti raised the concerns with the bedside staff.

Sometimes they resist. “You have got to be careful from patient to patient,” Gerard Hayes, the tele-I.C.U. doctor on duty, explained. “Pushing hard on one has ramifications for how it goes with a lot of patients. You don’t want to sour whole teams on the tele-I.C.U.” Across the country, several hospitals have decommissioned their systems. Clinicians have been known to place a gown over the camera, or even rip the camera out of the wall. Remote monitoring will never be the same as being at the bedside. One nurse called the command center to ask the team not to turn on the video system in her patient’s room: he was delirious and confused, and the sudden appearance of someone talking to him from the television would freak him out.

Still, you could see signs of change. I watched Hayes make his virtual rounds through the I.C.U. at St. Anne’s Hospital, in Fall River, near the Rhode Island border. He didn’t yet know all the members of the hospital staff—this was only his second night in the command center, and when he sees patients in person it’s at a hospital sixty miles north. So, in his dealings with the on-site clinicians, he was feeling his way.

Checking on one patient, he found a few problems. Mr. Karlage, as I’ll call him, was in his mid-fifties, an alcoholic smoker with cirrhosis of the liver, severe emphysema, terrible nutrition, and now a pneumonia that had put him into respiratory failure. The I.C.U. team injected him with antibiotics and sedatives, put a breathing tube down his throat, and forced pure oxygen into his lungs. Over a few hours, he stabilized, and the I.C.U. doctor was able to turn his attention to other patients.

But stabilizing a sick patient is like putting out a house fire. There can be smoldering embers just waiting to reignite. Hayes spotted a few. The ventilator remained set to push breaths at near-maximum pressure, and, given the patient’s severe emphysema, this risked causing a blowout. The oxygen concentration was still cranked up to a hundred per cent, which, over time, can damage the lungs. The team had also started several broad-spectrum antibiotics all at once, and this regimen had to be dialled back if they were to avoid breeding resistant bacteria.

Hayes had to notify the unit doctor. An earlier interaction, however, had not been promising. During a video check on a patient, Hayes had introduced himself and mentioned an issue he’d noticed. The unit doctor stared at him with folded arms, mouth shut tight. Hayes was a former Navy flight surgeon with twenty years’ experience as an I.C.U. doctor and looked to have at least a decade on the St. Anne’s doctor. But the doctor was no greenhorn, either, and gave him the brushoff: “The morning team can deal with that.” Now Hayes needed to call him about Mr. Karlage. He decided to do it by phone.

“Sounds like you’re having a busy night,” Hayes began when he reached the doctor. “Mr. Karlage is really turning around, huh?” Hayes praised the doctor’s work. Then he brought up his three issues, explaining what he thought could be done and why. He spoke like a consultant brought in to help. This went over better. The doctor seemed to accept Hayes’s suggestions.

Unlike a mere consultant, however, Hayes took a few extra steps to make sure his suggestions were carried out. He spoke to the nurse and the respiratory therapist by video and explained the changes needed. To carry out the plan, they needed written orders from the unit doctor. Hayes told them to call him back if they didn’t get the orders soon.

Half an hour later, Hayes called Mr. Karlage’s nurse again. She hadn’t received the orders. For all the millions of dollars of technology spent on the I.C.U. command center, this is where the plug meets the socket. The fundamental question in medicine is: Who is in charge? With the opening of the command center, Steward was trying to change the answer—it gave the remote doctors the authority to issue orders as well. The idea was that they could help when a unit doctor got too busy and fell behind, and that’s what Hayes chose to believe had happened. He entered the orders into the computer. In a conflict, however, the on-site physician has the final say. So Hayes texted the St. Anne’s doctor, informing him of the changes and asking if he’d let him know if he disagreed.

Hayes received no reply. No “thanks” or “got it” or “O.K.” After midnight, though, the unit doctor pressed the video call button and his face flashed onto Hayes’s screen. Hayes braced for a confrontation. Instead, the doctor said, “So I’ve got this other patient and I wanted to get your opinion.”

Hayes suppressed a smile. “Sure,” he said.
When he signed off, he seemed ready to high-five someone. “He called us,” he marvelled. The command center was gaining credibility.

Armin Ernst has big plans for the command center—a rollout of full-scale treatment protocols for patients with severe sepsis, acute respiratory-distress syndrome, and other conditions; strategies to reduce unnecessary costs; perhaps even computer forecasting of patient volume someday. Steward is already extending the command-center concept to in-patient psychiatry. Emergency rooms and surgery may be next. Other health systems are pursuing similar models. The command-center concept provides the possibility of, well, command.

Today, some ninety “super-regional” health-care systems have formed across the country—large, growing chains of clinics, hospitals, and home-care agencies. Most are not-for-profit. Financial analysts expect the successful ones to drive independent medical centers out of existence in much of the country—either by buying them up or by drawing away their patients with better quality and cost control. Some small clinics and stand-alone hospitals will undoubtedly remain successful, perhaps catering to the luxury end of health care the way gourmet restaurants do for food. But analysts expect that most of us will gravitate to the big systems, just as we have moved away from small pharmacies to CVS and Walmart.
Already, there have been startling changes. Cleveland Clinic, for example, opened nine regional hospitals in northeast Ohio, as well as health centers in southern Florida, Toronto, and Las Vegas, and is now going international, with a three-hundred-and-sixty-four-bed hospital in Abu Dhabi scheduled to open next year. It reached an agreement with Lowe’s, the home-improvement chain, guaranteeing a fixed price for cardiac surgery for the company’s employees and dependents. The prospect of getting better care for a lower price persuaded Lowe’s to cover all out-of-pocket costs for its insured workers to go to Cleveland, including co-payments, airfare, transportation, and lodging. Three other companies, including Kohl’s department stores, have made similar deals, and a dozen more, including Boeing, are in negotiations. Big Medicine is on the way.
Reinventing medical care could produce hundreds of innovations. Some may be as simple as giving patients greater e-mail and online support from their clinicians, which would enable timelier advice and reduce the need for emergency-room visits. Others might involve smartphone apps for coaching the chronically ill in the management of their disease, new methods for getting advice from specialists, sophisticated systems for tracking outcomes and costs, and instant delivery to medical teams of up-to-date care protocols. Innovations could take a system that requires sixty-three clinicians for a knee replacement and knock the number down by half or more. But most significant will be the changes that finally put people like John Wright and Armin Ernst in charge of making care coherent, coördinated, and affordable. Essentially, we’re moving from a Jeffersonian ideal of small guilds and independent craftsmen to a Hamiltonian recognition of the advantages that size and centralized control can bring.
Yet it seems strange to pin our hopes on chains. We have no guarantee that Big Medicine will serve the social good. Whatever the industry, an increase in size and control creates the conditions for monopoly, which could do the opposite of what we want: suppress innovation and drive up costs over time. In the past, certainly, health-care systems that pursued size and market power were better at raising prices than at lowering them.
A new generation of medical leaders and institutions professes to have a different aim. But a lesson of the past century is that government can influence the behavior of big corporations, by requiring transparency about their performance and costs, and by enacting rules and limitations to protect the ordinary citizen. The federal government has broken up monopolies like Standard Oil and A.T. & T.; in some parts of the country, similar concerns could develop in health care.

Mixed feelings about the transformation are unavoidable. There’s not just the worry about what Big Medicine will do; there’s also the worry about how society and government will respond. For the changes to live up to our hopes—lower costs and better care for everyone—liberals will have to accept the growth of Big Medicine, and conservatives will have to accept the growth of strong public oversight.

The vast savings of Big Medicine could be widely shared—or reserved for a few. The clinicians who are trying to reinvent medicine aren’t doing it to make hedge-fund managers and bondholders richer; they want to see that everyone benefits from the savings their work generates—and that won’t be automatic.
Our new models come from industries that have learned to increase the capabilities and efficiency of the human beings who work for them. Yet the same industries have also tended to devalue those employees. The frontline worker, whether he is making cars, solar panels, or wasabi-crusted ahi tuna, now generates unprecedented value but receives little of the wealth he is creating. Can we avoid this as we revolutionize health care?
Those of us who work in the health-care chains will have to contend with new protocols and technology rollouts every six months, supervisors and project managers, and detailed metrics on our performance. Patients won’t just look for the best specialist anymore; they’ll look for the best system. Nurses and doctors will have to get used to delivering care in which our own convenience counts for less and the patients’ experience counts for more. We’ll also have to figure out how to reward people for taking the time and expense to teach the next generations of clinicians. All this will be an enormous upheaval, but it’s long overdue, and many people recognize that. When I asked Christina Monti, the Steward tele-I.C.U. nurse, why she wanted to work in a remote facility tangling with staffers who mostly regarded her with indifference or hostility, she told me, “Because I wanted to be part of the change.”

And we are seeing glimpses of this change. In my mother’s rehabilitation center, miles away from where her surgery was done, the physical therapists adhered to the exercise protocols that Dr. Wright’s knee factory had developed. He didn’t have a video command center, so he came out every other day to check on all the patients and make sure that the staff was following the program. My mother was sure she’d need a month in rehab, but she left in just a week, incurring a fraction of the costs she would have otherwise. She walked out the door using a cane. On her first day at home with me, she climbed two flights of stairs and walked around the block for exercise.

The critical question is how soon that sort of quality and cost control will be available to patients everywhere across the country. We’ve let health-care systems provide us with the equivalent of greasy-spoon fare at four-star prices, and the results have been ruinous. The Cheesecake Factory model represents our best prospect for change. Some will see danger in this. Many will see hope. And that’s probably the way it should be. 

Article 41. The Power of a Collaborative Team Mindset

After Hurricane Katrina, it was collaborative leadership that returned order to New Orleans and improved rescue and recovery efforts.
by | April 7, 2010
Except from Governing Magazine
 

On Monday morning, August 29, 2005, Hurricane Katrina hit the Gulf Coast. It was the costliest and one of the five deadliest hurricanes in U.S. history. Billions of people around the world watched in disbelief as the world's superpower seemed astonishingly unable to save the inhabitants of a major city. Government at all levels failed the people of New Orleans despite the valiant efforts of thousands of people.

Most of the anger was focused on FEMA, the federal government's emergency management agency, and its director Michael Brown. In the months after being fired due to FEMA's poor performance, Brown argued that he had managed FEMA well but couldn't control agencies outside of his authority. In fact, Brown's statement reflects a mindset totally inappropriate to his task. Brown was thinking hierarchically; he saw his job as managing his agency. But as Donald F. Kettl argues in The Next Government of the United States, Brown's primary job during the disaster was to think horizontally and develop partnerships. No single agency could deal with this disaster; it required a coalition.

On September 9, Thad Allen replaced Michael Brown to lead the search, rescue and recovery efforts. His no-nonsense demeanor restored a sense of confidence. Over the next three weeks, approximately 60,000 people were rescued from New Orleans -- 33,500 of them by the Coast Guard. A sense of order returned to the city, rescue and recovery efforts improved and political players started to cooperate. Allen received considerable credit for this improvement. How did he do it?

He began by inviting a number of his most trusted colleagues to work with him in New Orleans. Then, when Louisiana Gov. Kathleen Blanco issued a blistering statement criticizing the federal government for failing to retrieve bodies from New Orleans waters, Allen called her. He asked, "Governor, have I done something to give you the impression that I'm interested in anything but helping the people of Louisiana?" That call softened her criticism and bought some time.

Within 24 hours of arriving, Allen and Army Lt. Gen. Russel Honore`(commander of the Katrina Joint Task Force) established a planning group. They reported daily to New Orleans Mayor Ray Nagin and Gov. Blanco on their goals for the next day. Allen told those reporting to him that they were to treat everyone in New Orleans "as though they were members of your own family."
Allen then acted on one of his favorite sayings, "Transparency of information breeds self-correcting behavior." He opened the recovery process to the media, inviting them to become a partner in telling the public what was being done to help the residents.
Allen also relied on an approach refined by the Coast Guard over the years: focus on "strategic intent." Rather than develop detailed plans, he and his partners agreed on a general direction and major priorities, determined who was responsible for what and emphasized constant communications and flexibility.

As a result of these approaches, Allen's team was able to leverage about 130 boats from other organizations. They got local responders to share knowledge of the city with those who came from elsewhere. They allowed themselves to work more closely with the government and nonprofits on the rescue and cleanup.
As painful as Katrina was (and still is), its lessons are powerful for anyone interested in collaboration. The table below captures the key differences between Brown's and Allen's approaches. My point isn't to portray one as a superhuman hero and the other as totally responsible for inept government responses to Katrina. No single person was responsible for either the failures or the successes. The reason for contrasting Brown's and Allen's leadership styles is simply this: their performance during Katrina reflects some key differences between a bureaucratic-hierarchical style, and a collaborative approach.

Two Different Mindsets


Michael Brown Thad Allen
Focus Manage his agency Lead a network
Key assumptions Can only use formal authority to accomplish goals Can use relationships, influence, the media and peer pressure to achieve goals

Need senior leader support to succeed Need strong partnerships pulling in same general direction to succeed

Go by the book Be flexible, use requirements of the situation to set your course
Communications Control the message tightly "Shine a light" on the operations, show the public our work
Political power You gain power through access to senior leaders You gain power by listening, speaking truth to power, making good on promises and delivering results
To be sure, there are many times when a hierarchical leadership style is appropriate. But large, complex challenges require a collaborative mindset. In New Orleans, Thad Allen gave us a clinic on how a collaborative mindset works.
Note: This column is excerpted from Russ Linden's new book, Leading Across Boundaries: Creating Collaborative Agencies in a Networked World.
 

 

 
 

Friday, December 6, 2013

Article 40. Election Reform Yields Savings in Missouri

The number of counties in Missouri was determined in the 19 century by the distance that a resident had to go to the county seat and return in a single day by horse and buggy. The number of polling places in the county also had to be a convenient drive by horse and buggy. Now after more than a century and since the invention of the automobile any talk of cutting back the number of polling places is thought to be a treasonable offense. It is time to recognize that the cost of an election is directly related to the number of polling places.

An election in rural Phelps County Missouri normally requires a great deal of coordination and training of more than one hundred Election Judges with about 23 polling locations. There is also some difficulty for securing handicapped accessible polling places. The larger of election costs are associated with the purchase, maintenance, certification and transporting of expensive handicapped touch screen and regular scanning voting machines. Election costs soared with federal handicap voter mandates requiring computer touch screen voting machines as well as handicap access to the polls. Elderly election judges were unable to supervise the use of the touch screen voting machines and computer specialists (paid the same as elections Judges) are needed at each polling location adding to the cost. Apparently no thought was entertained for reducing the number of polls at the time of the government handicap poll requirements were made. Now the touch screen computers will soon need to be replaced (most computers usable life is not more than five years) Phelps County will need to purchase about 25 of them. The urgency for Election Reform comes from the fact that Phelps County as well as most other Missouri counties who have invested in the touch screen voting machines can not afford to meet this unfunded mandate without an increase in property taxes.

A change in Missouri’s election laws from voting on a single day to allow a choice for Early Voting could significantly reduce the cost of an election by decreasing the number of poll locations and the number of voting machines. In a time when state and local governments are struggling with reduced revenues Early Voting can reduce election costs significantly. Early voting is done in Texas and in Florida for different periods of time from a few days to as much as 17 days in Texas. I would suggest the adoption of a standard for Early Voting of one to five voting days prior to a Tuesday National election, including a presidential election. Voting on local elections with a smaller number of voters could be accommodated in one day, the regular Tuesday election. The point is to be flexible in serving voters according to expected voter turnout.

The number of polls required could be based on any number of criteria: school districts, natural barriers such as rivers, zip codes, or population centers such as incorporated towns. In some Missouri Cities for example Kansas City the school district is too large encompassing the entire city. Zip codes are not an exact location as some believe but overlap with each other even county lines. The logical choice for poll locations at least for rural Missouri is incorporated towns. Phelps county has five incorporated towns which would allow the number of polls to be 5 instead of the current 23. This is good for municipal as well as school elections.

With Early Voting an election is supervised by the County Clerk using existing office personnel and monitored by political party designated officials who validate election equipment as well as voters just as in a normal election. The difference being that the election is held at the County Court House in Rolla and in four other incorporated towns using one handicapped (touch screen) and one regular scanning voting machine at the five poll locations. There should be at least one back-up machine in case of equipment failure for a total six or seven handicapped (touch screen) and scanning machines. The saving comes from reducing poll locations from 23 to 5 and extending the voting period as in Early Voting with 5 polling areas each requiring Election Judges and with the reduction in both types of voting machines from about 50 to 14. Phelps County will benefit from the sale of the 18 touch screen computers as well as the sale of the 18 surplus scanning voting machines. The election reform will reduce Phelps County election costs by 50% to 70% while still meeting Federal mandates for handicap voters.

In Missouri Early Voting will require Legislative action authorizing the use of Early Voting and in some cases voter approval to make the change an alternative election procedure.  Voters in Missouri will get a chance to vote on this issue in the Spring of 2012.

A second improvement authorizes local governments to use ballot printing equipment (backed-up in case of printer failure), to “pre-print” and to “print on demand” ballots during an Early Voting election. This reduces the significant cost of unused ballots which currently must be pre-printed in advance in large numbers in case there is a greater voter turnout than predicted.

Update Dec 6, 2013
The state legislature has voted to allow the polls to stay open for more than one day but counties have been reluctant to reduce the number of polling places even for up to a 50% reduction in election costs.

Thursday, December 5, 2013

Article 39. Approach Outline for the Total Reform of the US Federal Government

A White Paper by Lawrence Rosier Principal Management Consultant  February 18, 2013

I read somewhere that if your going to eat an elephant you have to break it down into bite size pieces and that is exactly what the intention of this white paper is about.  This is an outline intended to build a frame work where others may hang their ideas.

The intent is to implement high level Government Reform Commissions to have oversight of the implementation of the reforms.  Each of the president’s cabinet departments should have a Reform Commission.  But to fully understand the responsibilities of each Reform Commission I recommend a pilot implementation be made in the Department of Defense.  This will allow lessons learned to make the remaining Departmental implementations operate more smoothly.

The Key Role of the Government Accounting Office
The GAO will Chair each Cabinet Departmental Reform Commission; this is necessary to provide the objectivity required for the implementation of the reforms.  Department personnel will be members of the Reform Commission.  Some Departmental officials may be on the commission in a rotating basis to focus  on key areas of the implementation.

The GAO will supply Budget Analysis personnel for the implementation of the author’s General Reform Model.  The GAO will be responsible for the storage of all data generated by low level Functional Lean Teams and collected by the Budget Analysts.  The data stored will be the basis for bottoms-up budget with the actual cost of every government function including the actual staffing required.

The Executive Office of Management & Budget and other government officials in need of budget data will have access to the budget data for budgeting purposes but the GAO will be responsible for maintaining and updating the data.

Congressional Oversight
Congress shall be updated on the progress of the Reform Implementations as required.
Department of Defense Pilot Implementation
The GAO will Chair the DOD Reform Commission at the Joints Chiefs of Staff level.  High level DOD personnel will be members of the Commission.   I recommend that the first area of implementation be in the US Army because of their emphasis on Lean Six Sigma.  Representatives of the US Army associated with the Lean Six Sigma should be members of the DOD Reform Commission.  Rotating membership should be provided for US Army organizations as key implementations are made in their areas.

Wednesday, December 4, 2013

Article 38. County Consolidation in Missouri

County Government Reform by consolidating the 19th century Counties into 21nd century Districts using the authors Consolidation Model.  Counties are among the most inefficient government organizations due to the difficult problem of balancing employee work loads caused by elections.

Question from an Ohio State Legislator
How do you approach the reduction of the number of local governments? 
Do you have something on how to reduce local governments?  We have 16 townships and 88 counties, is all of that necessary, just thinking about it.  I know some legislators here have already begun to talk about it.  

There are several reasons why this is a good idea among them are:
1. A significant cost savings results from the elimination of duplicated services.
2. Services to the elderly can be provided more economically and effectively.
3. Combining nearby counties and or cities increases the the appearance of a larger population attracting business and industry to the area.

Recommendations for Consolidating Counties
I recommend that my consolidation model be followed. Start by examining how the State Department of Transportation is organized into Districts.  These Districts are organized to provide the best service for the State's roads. Then consider that the same Districts more or less can provide health services. This gives you are starting example for the number of required Districts.  These new Districts will replace the current counties reducing their number from the 88 counties in Ohio to around 30 or 35 Districts.

Because most Counties will be reluctant to give up their County Seat and their Court House I recommend the the districts be called Health Care Districts and Department of Transportation Districts for the time being.  Each District should contain at least three Counties with the District offices residing in the most prominent town with a hospital. Each District should have a walk-in clinic for public health service and can be either public or private.  I would ignore the combining of local county and city governments until the Health and DOT District concept is accepted by the public.  This may take a couple of years.

Details of the Consolidation Model
I recommend that pilot Demonstration be made of the Consolidation Model of the first District.  This will allow lessons learned to be developed in the consolidation of the first district.  It also allows for the development of software applications that can be duplicated in the remaining Districts.
Step 1. Determine which of the Counties will be the new District   seat. This is done by a District wide vote
Step 2. Implement Enterprise Lean in each of the pilot Counties
Step 3. Have Budget Analysts collect the Lean Team data for each County in a separate Spread Sheet.
Step 4. After all the Functional data have been collected in each of the pilot counties.  The duplicated functions will be compared to determine the most efficient Lean method for doing the function and added to the new District database.  This will also become the Bottoms-up functional Budget for the District.
Step 5. The bureaucratic organization will be changed to a Team Management organization and layoffs for the District's redundant personnel will follow.
Step 6. The data developed in the pilot will be replicated for all of the remaining Districts.  It is not necessary to implement Enterprise Lean in all of the remaining Districts because the Lean Data has already been determined in the pilot however I still recommend that it be implemented for the benefits to employees and the need for continuous improvement to the district's functions.

I also recommend that County Road service be provided as a part of the State DOT District.

Consolidation in Metro Cities
Where County lines bisect metropolitan cities I recommend that Metropolitan District be created from the Counties. Some of the metro District's services will be the responsibility of the district but other services such as schools, fire and police should be the responsibility of the local city government.

Four Year State Reform Plan
After the state has implemented my General Reform Model and the other Reform Models the County Consolidation Reforms should follow as apart of a Four Year State Reform Plan.  This approach becomes more obvious when the Central Cloud State IT Model has been implemented.  This will provide Cloud IT services for all of the State's county and city obsolete IT computers.

Example of consolidation of Missouri Counties:

                           Current Missouri Counties
                     Proposed Missouri Districts

Article 37. Why Enterprise Lean has failed to get the Highest efficiency in Iowa and Minnesota

Both Iowa and Minnesota’s Enterprise Lean implementations have been touted as being enormously successful for years.  But when you look closer you will find that they have misapplied Toyota’s TPS (Toyota’s Production System) aka Enterprise Lean system.  The problem is that when Iowa and Minnesota adapted the Enterprise Lean system to their governments they failed to understand the differences between a Japanese manufacturing environment and an American State Government environment.  Toyota is a well managed company with less than 5% over staffing a factor not even considered in Toyota’s TPS.  But Iowa and Minnesota had an inherent 20% to 30% over staffing before the implementation of Enterprise Lean a fact misunderstood or ignored by the States' Administrative offices which manages Enterprise Lean.  Both Iowa and Minnesota have a stated policy that they do not reduce staff when lean studies clearly show a reduced staffing requirement.  If staffing is not reduced then they must find some new project for the extra staff to do to take advantage of the increased efficiency.  After a number of Lean improvements have been made and there are no other jobs to move personnel to, the entire Lean program becomes a sham and a waste of taxpayer dollars.  Yes they have improved systems such as document flows that improve customer service but they could have done this and saved taxpayer dollars.

Recommendations by Lawrence Rosier
For Iowa and Minnesota I recommend the current Lean organization be moved to a proposed State Reform Commission as an independent part of the State Auditors Office. This is necessary to prevent the state's bureaucracies from controlling the Enterprise Lean implementation and preventing the implementation of the reforms I recommend.
 
For other states wanting to adapt Enterprise Lean I recommend an indirect approach which legislatures can use to stem the growth of state government and make it efficient and effective.  My indirect approach uses the Enterprise Lean data from Lean Teams to reform the State Government.

My recommended indirect reform approach Following my General Reform Model
1. Establish a proposed Reform Commission in the state auditors office.
2. Implement Enterprise Lean throughout the State Government with Lean Teams.
3. Budget Analysts will Collect, accumulate and verify the data developed by the Lean Teams in Spreadsheets.
4. A Principal Consultant will implement Reforms by: Right-Sizing (makes sure all employees have a full time job), bottoms-up budgeting, changing the bureaucracy to Team Management and followed by other State Reform Models.  
Reference:
1. Minnesota's Enterprise Lean: http://www.lean.state.mn.us/
2. State of Iowa Office of Lean Enterprise: http://lean.iowa.gov/
3. Washington State: "Lean Transformation Report 2012 and Beyond": http://www.results.wa.gov/whatWeDo/applyLean/documents/2012LeanReport.pdf

Article 36. False Assumptions by government Leaders


The following list of false assumptions are not universal some government Leaders are better managers than others. 

1. Every problem requires a funding solution.
This simply is not true some problems can be resolved without spending any funds.  However most major problems should be researched to find the most “bang for the bucks”.  If the legislature were to use a Lean team this is where you would find the most innovative solutions. 

2. Across-the-board spending cuts treat all Agencies alike.

This couldn’t be further from the truth. Agencies that manage their budgets well will experience difficulty but badly managed over staffed organizations will not feel the pain. Public safety issues arise by cutting police and fire protection. The consistent practice of across-the-board-cuts promotes over-staffing in all agencies and is a real drag on budgets.

3. All agencies need an Organization Chart describing the jobs that the agency does. 
Ostensibly this is done so that those outside the agency can find the proper person to approach for a solution. The problem is that the person in the org box may have a job which occupies less than a full time employee.  I recommend that bureaucracies be organized as teams with functional groupings not departments more on this later.

4. Difficult problems brought before law makers are sometimes resolved by funding the formation a new agency and passing the problem to it.  
The result is many agencies have out lived their usefulness yet continue to be a drag on state and federal budgets.

5. When a new agency is formed a bureaucratic organization chart is the first thing made.
                                                      Then each block on the chart is filled. Each block in turn creates its own org chart etc. This is a top-down created agency an ever expanding bureaucratic maze before any work is actually done.  I recommend the bottom-up approach used to grow private businesses. Start with the formation of a top level Steering Management Team (preferably with Lean training) with each of its members leading a self-managed Functional Team of employees who are actually doing the work of the agency. The agency is grown efficiently from the bottom-up only expanding when there is a need to get something done

6. Budget cuts automatically result in reduced services. There may be some truth to this if the budget does not reflect the true cost of the service.                                                                       The fact is that nearly all state budgets are Top-Down budgets that reflect little of the real costs associated with a service only by Work Measurement resulting in a Bottoms-Up budget can the real costs be known. Once the real costs are known budget leaders will know exactly where to make cuts and still keep wanted government services.

7. An agency can be made to be more efficient if productivity is measured.                                                                                       The absolute worst thing you can do is to try to measure public services without standards especially those that have variations in their processes.  What you can do is to find the best way to do a function using Lean then use Work Measurement to determine the correct staffing.  Establish self managed Functional Teams empower them to innovate and make continuous improvement to their jobs.   Then get out of their way.  Don’t waste their time by trying to micromanage their jobs. 

8. With extreme pressure to balance the budget the legislature should only concentrate on finding all the savings that can be found.                                                                                              Wrong, this is usually not going to be enough to balance the State Government’s budget short falls. Major government reforms using Enterprise Lean should be implemented with due haste. This means the implementation of Lean Teams throughout government agencies leading to Work Measurement with subsequent staffing and a Bottoms-Up budget. This will determine where cuts can safely be made to continue needed government services.

9. To increase the efficiency of an agency first fix their IT problems.                                                                                     Dead wrong. The correct approach is implement Enterprise Lean Teams to study the overall problem determine how best to provide these services organize for the best solution and only then consider automation. The false assumption  in starting with an IT solution is that the organization is assumed to be already operating the best way it can.

10. Contracting government services to private vendors is the best policy.                                                                                    This is not always the best policy. IT contracting of public services in several states has failed in: Indiana, Texas and Virginia. The false assumption here is that private contractors know best how to do the job when the reality is that agency personnel are closer to knowing the real problems than a private contractor. The agency needs to remain in control of these services and only subcontract for IT services which it cannot provide. But again the agency should always use Enterprise Lean to determine the best way to do the job before automating it. 

11. The application of manufacturing methods to government processes improves productivity.                                                 Yes, but only where they apply. Most manufacturing production lines are a set of non-varying processes that produce a product. Most government and office services have varying processes where Enterprise Lean can be applied but not without supporting history data. 

The Most Costly False Assumption Made by Government Leaders
The single most costly false assumption made by government leaders is that Bureaucratic Government Operates Efficiently. Nearly all government leaders seldom give the efficiency of bureaucratic government a second thought or at least they think that nothing can be done about the problem. The fact is that all Bureaucratic organizations are inherently inefficient in management in two areas: being overstaffed by as much as 20% or more and by the bureaucratic failure to prevent waste, fraud and corruption.

This assumption is made every time we find related that there is only two ways to reduce budgets either “cut programs or raise taxes”.  This completely leaves out the third alternative of making government more efficient.  This is deeply engrained in our culture nearly all Politicians and Reporters regularly make this mistake of a two choice alternative cutting programs or raising taxes.  We hear this all the time repeated on TV.

This false assumption that bureaucracies operate efficiently comes from an even greater lack of understanding of the concept of efficiency and what it means for governments to operate efficiently.

Politicians make this assumption when they defend giant bureaucratic organizations such as Medicaid and Medicare from the recent budget cutting efforts. Some feel that there is enough public support for the services of these organizations that the opposition can’t win. Others are well aware that services provided cannot be sustained in the future and want to reign in the costs of these programs before doomsday. This kind of confrontational behavior is based on the single false assumption that bureaucratic government operates efficiently and therefore there are only two alternatives cut Medicare or raise taxes. Government Leaders who know about the inefficiency of Bureaucracies seam to be in agreement that nothing can be done about the problem. 

Congress should focus its attention on reforming government bureaucratic organizations using Enterprise Lean to get the highest efficiency possible. The method I propose Right-Sizes the Bureaucratic organization and changes it to a Team Managed organization. This is a major change in the way that these organizations are managed practically eliminating the current fraud and corruption with the help of today’s new computer systems. The benefits of this method is that democrats and the public get to keep the services provided and Republicans get the budget cuts they want and Medicaid and Medicare survive, at least for now and everybody wins except the bureaucrats.

It is clear that the third option of increasing the productivity of government is not well understood. In fact it is not understood at all by most state legislatures and congressmen who continue to pursue cutting programs or raising taxes as the only two options. One of the reasons for not buying into over staffing is that when I say nearly all bureaucracies are over-staffed by 20% or more they simply don’t believe it.  The reason is that nearly all politicians are regularly confronted by examples of over-worked government employees while some government employees have almost nothing to do.   

The Biggest Widespread False Belief About Government
The biggest widespread false belief about government is that “what it does” is somehow different from  “what normal business does”.   For every function found in government you can find something similar in business even voting.  But yet government appears to be fundamentally different from business.  This is because the political trappings of bureaucracy has created this mystique.  This belief is widespread in our culture.  I recall the famous quip by an astronaut who had just finished his day of training “That’s good enough for government work”.
  
If you can accept that this as true -there really is no difference between what government does and what business does -then you can begin to understand the mystique of bureaucracy.   Bureaucracy has brainwashed us all into thinking that if there is no profit motive then there is no reason to be concerned about the bottom line.  This has left us with the sad fact that it is nearly impossible to fire a government employee.  And as for laying off a government employee if there is no work to do it is totally out of the question.  This is one of the basic reasons that Bureaucracies are over staffed.

Article 35. Twenty Five Case Studies Using Lean in Government

Twenty five Case Studies using Lean in GovernmentRef. For the full case studies see the following link:  Lean Government Center  http://leangovcenter.com/govweb.htm by Harry W. Kenworthy Principal & Manager QPIC.
  
Recommendations by the Author Lawrence Rosier
These Case Studies are what I call high level Lean studies and are done mostly by professional Lean Consultants on individual projects. Lean Six Sigma is currently the preferred tool for fixing high level systems.

My complementary approach recommends that this individual high level project approach be done first using Lean Six Sigma followed by the implementation of Enterprise Lean for fixing the subsystems that feed the high level systems.  I also use the data from the Enterprise Lean studies for implementing major reforms to the organization using my General Reform Model.

The Enterprise Lean implementation involves all employees of a department or Agency being trained in the lean Lean tools.   I recommend Lean Six Sigma training for internal Management Employees to do internal document flow studies using the Value Stream Mapping tool for cross departmental studies.

Why implement Enterprise Lean?
The projects listed here only make individual high level systems more efficient but ignores all of the subsystems found in an Agency or a Department.  It is true that it makes the organization more efficient but it does less than half the job.  Enterprise Lean is used in the low level functional areas by Lean trained employees. Besides the savings from the Lean studies employees are empowered to innovate and make continuous improves in their jobs.
 
Use of Enterprise Lean Data for Reforms

Following my General Reform Approach I have adapted the Enterprise Lean Team data to be used in getting the highest efficiency and effectiveness possible in government systems. The Data is used in reforms for Right-Sizing (makes sure all employees have a full time job), staffing and the development of a Bottoms-up Budget.  This is followed by the elimination of the bureaucratic organization changing it to a Team Managed organization with additional savings.

Twenty five Case Studies using Lean in Government
Note that the following Lean case studies were mostly made by the invitation of a government bureaucracy and it is not known if any staffing reductions were actually made.

Case 1: MRAP Production Improvement
Greatly Increased Production of Mine Resistant Ambush Protected (MRAP) Vehicles. US Military 2006.

Case 2: Navy F404 Repair
Navy F404 Engine Repair Improvement for F/A-18 Hornet Aircraft

Case 3: Navy Process
Navy Process Improvement for Acquisition of Commercial Off-the-Shelf (COTS) Information Technology Items

Case 4: F-16 Pylons
Air Force Improved Repair of F-16 Wing Pylons at Ogden Air Logistics Center

Case 5: Improved Repair Process
Air Force Improved Repair of F-16 Radar Antennas at Ogden Air Logistics Center

Case 6: Corpus_Christi_HH-60
Improved Maintenance, Repair and Overhaul of HH-60 Pave Hawk Helicopters

Case 7: Army Process Improvement
Army Process Improvement for Preparing Cost Analysis Requirements Documents

Case 8: NASA Process Improvements
National Aeronautics and Space Administration (NASA) Administrative and Technical Process Improvements

Case 9: IRS Performance
Problem
Quality of performance within the Internal Revenue Service (IRS) was sufficiently poor in the 1990s that in 1998, Congress passed the Restructuring and Reform Act of 1998 (RRA 98). Problem areas identified for correction included personnel accountability and internal measurement accuracy.

Case 10: Pension Benefit Guaranty Corporation
Pension Benefit Guaranty Corporation (PBGC) Improved Process for Obtaining Return of Overpayments

Case 11: EPA Corrective Action
Environmental Protection Agency (EPA) Improvement of Corrective Action Tracking Process

Case 12: EPA Process Improvement
Environmental Protection Agency (EPA) Process Improvement for National Pollutant Discharge Elimination System

Case 13: Iowa Improved Environmental Permit Issuance
Iowa Improved Environmental Permit Issuance to Remove Barriers Effecting Economic Development and Growth
Problem
In 2003, Iowa’s Coalition for Innovation and Growth was working to improve state processes considered to be barriers to a business’s ability to develop and/or grow in Iowa. Several processes identified were related to issuing various environmental-related permits by the Iowa Department of Natural Resources (DNR).

Case 14: Minnesota Pollution Control Agency
Minnesota Improved Performance of Pollution Control Agency
Problem
In 2003, Minnesota’s Pollution Control Agency (PCA) was experiencing an increasing number of complaints from industry, and had received an audit by the state legislature, regarding inefficiencies in its permitting processes. Due to these inefficiencies, permit backlogs were high. In order to improve this situation, the agency turned to the Enterprise Lean (LSS) method.

Case 15: Michigan Improved Air Permitting
Michigan Improved Air Permit to Install Application Review Process
Problem.  In early 2004, the Michigan Department of Environmental Quality (DEQ) was experiencing pressure from its regulated community, citizens and state government to have its Air Permit to Install (Air PTI) application review process completed in less than six months. Industry within the state considered Michigan’s air permitting program to be cumbersome, slow and unresponsive to its needs. General Motors (GM), supported by other members of the regulated community, met with Michigan DEQ to discuss options for improvement and recommended a Value Stream Mapping (VSM) Workshop be held.

Case 16: Making Permits Work
Delaware Improved Performance of Department of Natural Resources and Environmental Control in Air Construction Permitting Processes
Problem
In 2005, the Delaware Department of Natural Resources and Environmental Control (DNREC) wanted to increase efficiency in its air construction permitting processes. The department had heard about the success Michigan had already achieved in doing the same thing. As a result, Delaware decided to use Michigan’s successful effort as its model.

Case 17: Idaho’s Enterprise Lean Success
Idaho Department of Environmental Quality, Improved Air Quality Permitting Process
Problem
In Idaho, whenever any business has the potential to emit pollutants into the air, that business is required to obtain an air pollution control permit. Permits are needed when either a new business begins operations or an existing business make changes to its facilities. As with most states, Idaho wanted to ensure that economic development was not hampered by a lengthy permitting process that would be a roadblock to acquiring new businesses or enabling expansion of existing businesses. The Department of Environmental Quality (DEQ) was also confronted with the reality that no additional funds or staff would be available in the foreseeable future to improve air quality permitting despite the fact that an increasing number of applications was expected. It was necessary, therefore, to make improvements with existing resources only. Further, improvements were sorely needed. The time required to complete the process was taking more than 300 days, and there was a substantial backlog of applications (50) awaiting approval.

Case 18: Oregon’s Improved Operation
Oregon Department of Environmental Quality, Reduced Time and Cost to Test Environmental Samples
Problem
Water, soil and other environmental samples must be tested within a reasonably short period of time after they are collected—some as short as 48 hours—before the sample is no longer viable. The Oregon Department of Environmental Quality (DEQ) competes with private laboratories for this testing business. Therefore, Oregon DEQ experiences considerable pressure to keep turnaround times short and its costs competitive within this marketplace.

Case 19: County Uses Enterprise Lean
Erie County, Iowa: Cost Savings and Improved Services through Use of Enterprise Lean
Problem
Erie County, Iowa is located in the western part of the state and contains the city of Buffalo. The county borders on the shore of Lake Erie and is home to approximately 1,000,000 residents. In 2007, Erie County was operating under the auspices of an independent control board due to its unsteady fiscal situation.

Case 20: Building the Future Faster
San Diego County, Improved Process for Issuing Building Permits
Problem
When real estate developers needed to deal with San Diego County in order to obtain building permits, they were required to make nine separate visits, on average, to various county departments and agencies, and to navigate a mix of different fee structures, requirements and priorities. For example, one department focused on upholding building codes, another cared about environmental oversight and a third cared about how the proposed new structure would fit into the county’s master development plan. There simply was no single point of contact to provide applicants with the information and direction they needed to effectively, and successfully, accomplish the building permit process in a reasonable length of time. Indicative of the disjointed nature of the process, applicants walked a total of nearly 9/10 of a mile between various agency service counters to complete the process.
That situation began to change in November 2007 with the election of Christopher C. Collins as County Executive. He ran for this office as a businessman with the campaign slogan: “Elect a Chief Executive, not a Chief Politician.” He won with 64% of the vote.

Case 21: Handling Unplanned Changes
Mitigating Costs Associated with the H1N1 Influenza Virus within a County Correctional System
Problem
The 2009 H1N1 pandemic flu caused a series of issues for the jail and court system within a certain county government (not specifically named).

Case 22: Reforming City Government
Fort Wayne, Indiana: Cost Savings and Improved City Services through Use of Enterprise Lean
Problem
The city of Fort Wayne, Indiana (population, 250,000) is credited as being the first city within the country to implement Enterprise Lean (LSS) on a city government-wide basis. This was done in February 2000 under the leadership of its then mayor, Graham Richard. Mr. Richard was very familiar with the successes in using LSS that had been achieved by such notable private corporations as General Electric, Raytheon and ITT Industries. He believed that if costs could be reduced, productivity increased, and the quality of products improved in these companies; then the same benefits probably could be achieved in government entities as well.

Case 23: Irving’s Healthy Budget
Irving, Texas; Improved City Services Including Purchasing Healthcare for Employees
Problem
Irving, Texas is a city of approximately 200,000 residents located in the Dallas/Fort Worth Metroplex. It operates on a yearly budget of $350 million and has 2,180 employees. In 2006/2007, the city wanted to find breakthrough improvements in the services it provided to residents, visitors and businesses. To achieve these goals, the city decided to employ Enterprise Lean (LSS) methodology. Irving was the first city in Texas to implement LSS citywide.

Case 24: From the Ground Up
Mesa, Arizona, Improved Process for Issuing Building Safety Permits
Problem
The population of the city of Mesa, Arizona grew 37% from 1990 to 2000 and is expected to grow 30% over each of the next several decades. In order to attract more commercial development during this economic growth period, city government leaders wanted to cut the time it took builders to obtain a building safety permit from the city. At the time, it was taking three months, on average, from the initial application to permit issuance. Also, there was a two-month backlog. Finally, it was discovered there was a 73% first-time error rate for calculating fees based on what appeared to be an overcomplicated formula.

Case 25: Nationwide Savings
Various Examples of Improved Government Services at all Levels Using Enterprise Lean
Problem
Not every example of government use of Enterprise Lean (LSS) is widely publicized. In fact, for many applications, only limited information is available. However, all governments regardless of whether they are city, county, state or federal experience the same common problems: constrained financial resources, bureaucratic red tape, long lead times and increasing backlogs of work. The various government entities that have turned to LSS to solve these problems have experienced impressive and very satisfying results both in terms of the immediate issue at hand and regarding better motivated, more satisfied workforces
with higher morale.