John Toussaint: The executive guide to system transformation

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  • Posted:Wednesday 25 May 2016

John Toussaint, Chief Executive Officer of ThedaCare Center for Healthcare Value (United States), discusses leadership approaches for lowering the cost of health care delivery and building a culture of continuous quality improvement.

This presentation was filmed our our sixth annual leadership and management summit on 25 May 2016.


So in the US we have ACOs, we have about 500 of them, these are actually integrated systems now that include hospitals, primary care, GPs, especially doctors, all in one and that group gets paid by the federal government to care for populations of patients. Thedacare ACO in 2013 was the highest quality performer. This performance has continued through 2014 now, the lowest cost and highest quality performer in the ACO programme in the US.

There are 20,000 Medicare beneficiaries in this programme, so we’re really looking at population health of 20,000 people. The platform is still fee for service so there’s shared savings related to the platform we’re able to accomplish shared savings every year. In the first year of this programme the Thedacare organisation actually reduced the total cost of care by 4.6% for 20,000 people. So you can imagine in the US since we’re the most costly country in the world, if we could actually start reducing the total cost of care for our patients over 65 by 4½% a year we could start to get on top of our cost problem.

So if you’re the lowest cost highest quality ACO how did you actually accomplish that? And it was accomplished by this nationally recognised management system using principles and practices from guess what, industry. And what it shows is that we were able to reduce the growth and per capita health spending, year over year, and at the same time able to improve quality to the benchmark in the US.

The framework of what we’re talking about here with this method actually is this house and I want to talk through this with you. So what we start with with the executive teams of these hospitals is to say, “What really matters to your patients? Because I know you have to report a lot of metrics frankly to the government so do we but most of those things are useless from the standpoint of patients. So let’s talk about what really matters to patients”. And at the children’s hospital of Eastern Ontario what really matters to patients is how long the kids wait for things. Now they’ve established an incredible goal of reducing the number of days kids wait for service by 50,000 days. That is something that every single staff member in that hospital can get their arms around. Everybody knows that waiting is a problem. So guess what we’re going to do, we’re going to take this method that we’re learning and we’re going to re-design our care processes to get that wait time down.

Here’s Western Sussex True North metrics, hospital standardised mortality rate because, you know what, if I come to your hospital the one thing I don’t want you to do is kill me. So isn’t that the one thing we should focus on? Are we actually making mistakes that are killing patients? So how can I impact hospital standardised mortality ratio at Western Sussex? Well guess what, we should maybe work on ventilator associated pneumonias in the ICU. On the medicine ward maybe what we should do is try to keep people from falling out of bed and hitting their head and dying.

So one of the things we do with the senior executive teams is we ask them how many strategic initiatives do you have going on at any given time in your hospital? My teacher many years ago said, “You can have three to five things” and we went from 150 things at our hospital to four things, it took us 15 months to get there. This is part of the over-burden of your staff by the way, because guess what, you’re not doing the work, the staff’s doing the work. One of the things that we’ve learned in this method is that we have to start with the underlying principles of the method, because what happens usually is that we start with the tools because the tools are really cool. We’ve got spaghetti diagrams, and tag time and kaizen and wow it’s really cool stuff. But the reality is if we start with the tools we never sustain anything. So we need to start with the principles of the methodology. And so we’re going to see tools and artefacts and behaviour on top of the iceberg but what really underpins all of that stuff that we see as we go out and look at organisations that are really improving quickly?

And so what we’re recommending to folks is we start with these principles which then actually get us to the behaviours that are required to build the systems that are necessary to deliver the results. So there’s a sequence here that most organisations are missing. And we start with these principles, what are these principles? Well creating value for the patient. That’s the number one principle. That means we’re going to focus on improving the quality and lowering the cost of our health care delivery to the patient. Front and centre, that’s it. Constancy and purpose. Not 57 True North metrics, five. Not 222 strategic initiatives. Three to five. And we’re going to think about the components as a system. So these are the principles, this is what we start with, this is why we do what we do. That’s the idea. And the aligned principles are what the executive leadership needs to stay focused on.

The enabled principles are the cultural transformation activities that are going to be the underpinning of the overall improved performance. So we’re going to lead with humility, you know that that means? It means that me as CEO I don’t have all the answers. In fact the people at the frontline have the answers. So how do we push the decision making down to them? Because the way it works right now is most people that have a problem they sent it to the manager and say, “Here’s a problem go fix it for me”. Well what if we had a system in which the people that actually identified the problem on the frontline solved the problem? Wow that would be unique. Now we have to have the principle of respect every individual as part of our principle based approach here or we won't have that happen. And what we mean by respect is that we respect everyone who is doing the work on the frontline to identify and solve problems. The problem doesn’t have to been solved by us.

These are the improved principles so this is what most people focus on. We’re going to do kaizen, we’re going to do PDSA, but the reality is the enable and align principles are really the underpinning of the cultural change.

Here’s the align principles and here is the different roles and responsibilities for everyone. So at the leadership level the leaders are not solving problems, they’re developing a vision, they’re setting targets, they’re communicating what those targets are. The middle management is organising and allocating resources, so that the frontline can identify meaningful goals and improve care.

Same thing on the enable. The idea is that the leaders are energising and motivating and embracing both success and failure. The middle management is empowering the authority, that means giving up authority to the frontline who are going to find opportunities to improve care.

And finally on the improve piece, the leaders are looking for, asking questions, supporting new models of care delivery. They’re not building new models of care delivery, that happens on the frontline. I was trained at the greatest university in the world, as we all were, by the greatest professor in the world, as we all were, to be all knowing, in charge, autocratic, buck stops here, impatient and blaming.

Now we get into this new world where if we’re actually going to build a different culture one that has people identifying and solving problems every day, I have to be mentor, facilitator, teacher, coach, learner, the question is now what do we do next? And that’s up to you. But we know that we’ve got a method here that is way better than anything else we’ve been doing in the last 50 years in this business. So I think there’s a burning platform to move forward.

I appreciate your attention and I think we’re going to have some questions.


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