Lean Veterinary Scoreboards

In my last post, I discussed the difference between Management By Means (MBM) versus Management by Results (MBR). MBR means only focusing on the end result of the metric or KPI (and hoping the means of getting there are efficient and value-adding processes) or focusing on the processes that lead to that result, understanding that if all of the processes are behaving as designed and under control, the end result is a reasonable assumption. Too often with MBR, dollars is the only metric.

So, I wondered, could it be possible (theoretically speaking only!) to successfully manage a practice without actually measuring any money related metrics? And, what would that look like?

In other words, without tracking gross income, average client invoice, payroll expense as a percent of gross; any money metric?

What non-financial Key Performance Indicators (KPIs) could be used to assure the monetary goals are met? The trick is to be able to identify all (or many) of the processes that are components of the money goals and to assign a metric to adequately monitor those processes.

For example, Average Client Transaction is composed of gross income divided by the number of client visits. However, these two components are the result of other systems, such as fees, reminder efficacy, ease of appointments, number of incoming calls that result in a busy signal, hours of operation, client satisfaction, medical record audits (% of services performed that get invoiced) , etc.

Here is a list of some of the non-monetary metrics I came up with in order to manage a veterinary practice:

Quality 

• Door to Doc time 
• The time from the moment the client enters the practice to the time they see the doctor; a measure of flow and, therefore, value to the client.
• Number of unscheduled follow-ups
• The number patients needed to be seen a second ( or more) time in order to get resolution of the pet's condition. Notice this is not scheduled follow-ups for additional treatment, tests or monitoring.
• % visits scheduled for recall
• % recalls made
• Response to 1st reminder
• Response to 2nd reminder
• Response to 3rd reminder
• % pets current on RV (rabies vacs)
• # client surveys returned
• # of client referrals
• % staff completely cross trained
• % dogs current on HW (heartworm) prevention
• % pets current on flea prevention
• % blood sample hemolysed
• # of blood samples requiring redrawing
• % of medical rounds performed on time

Morale

• # idea (kaizen) cards submitted
• # idea (kaizen) cards/ staff
• # idea (kaizen) cards completed
• % idea (kaizen) cards completed

Safety

• # staff injuries / time period
• # pet injuries / time period
• # of adverse anesthesia events

Costs

• # of drugs or supplies found to be out of stock
• % blood sample hemolysed
• # of blood samples requiring redrawing

Some of these probably have sub-systems or sub-processes that might require monitoring and, thus, metrics of their own.

I am not proposing that no financial KPIs be watched. Veterinary practice is a business, after all. Some financial metrics are important and necessary. (However, they shouldn't all be financially focused, either.) Maybe we have not thought about the role that systems, processes, quality, waste, and flow plays in the money numbers; the Lean mindset. Maybe we should not worry as much about the end results and concentrate more on how we get there.

What metrics you decide to monitor is up to you and your staff. Remember, Lean is about making your practice the best "your" practice it can be, not a carbon copy of the practice down the road or on the other side of the country or, even, what a management guru says it should be in order to conform to some cookie cutter model. Your True North and your team (and some experimentation) will decide what metrics are important.

There would be high level, focus area metrics for leadership to monitor, sub-system metrics that managers would monitor and, still another layer (sub-sub-system) that frontline staff would create. These metrics are all aligned and make up your management scoreboards. Incidentally, this is an example of visual management.

Scoreboards

Note that these layers generally flow down from our True North statement (they're top down, but there's input from lower levels along the way). Leadership metrics arise from our practice's focus areas. They check the destiny or course of the ship. Are we heading in the right direction?

The middle and lower level metrics, created by the people responsible for that work (with some input from their leaders), check the systems and processes that make up the focus area (leadership) metrics. Are we getting to our destination with quality, safety, effectiveness and without waste?

This flow is, in essence, what Lean strategy deployment (hoshin kanri) is all about; getting the ideals of the practice down to the floor (gemba) and aligned throughout the practice. It is everyone pulling the same rope, from the same end, in the same direction and at the same time.

The routine of management and frontline staff huddling together in a safe, honest and trusting environment every morning to discuss the scoreboards is Lean Daily Management; a topic of later posting.

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5S

5S is part of the Lean approach to of “visual management,” as a way to show problems and irregularities, so they can be fixed quickly. As such, it is also an aspect of flow, standardized work and the elimination of waste. 5S deals with workplace organization, i.e. exam rooms, pharmacy, lab, surgery, or even the organization of email and information, etc. The workplace is organized to make work easier, clutter is removed, areas are cleaned, and the locations for supplies and movable equipment are labeled. A place for everything and everything in its place (once we figure out the right place!), and in the right amount. It requires the answering of two questions: (1) Do we have all that we need at the gemba, and (2) Do we need all that we have at the Gemba?

The five Ss stand for:

Sort (Seiri)
Go through the work area looking for any old, expired, irrelevant or broken items, and remove them. Throw them away or, at least, get them out of the way (if they are items that are used infrequently or non urgently). Do you really need to keep rabies certificates from 1987? Does anyone even know what a hemocytometer is, let alone still use it? Besides, the latex tubes disintegrated a decade ago!

Straighten (Seiton)
For everything else that remains, organize it. In the exam rooms, for instance, you try to make each exam room similar to the others so that there is continuity from one exam room to the other. Items used more frequently should be placed closer at hand to save time for staff and veterinarians, which can reduce delays for patients and increase office capacity and throughput.

Shine (Seiso)
Clean up the area and have a process for ongoing cleaning and sanitizing (as a form of standardized work). This minimizes contamination and infectious disease. The regular shine process is also the time to check equipment and perform timely maintenance. This keeps the hospital in a state that is a source of pride, with improved quality and safety

Systemize (Seiketsu)
Once the first 3Ss are done, we need to help make this an ongoing system, rather than a onetime activity. Ask if each of the drawers in cabinets, in each of the exam rooms, contain the same supplies and are they arranged in the same way? Systematizing helps prevent confusion and wasted time looking for items. This step provides the method to the madness. Label the drawers, cabinets and even the tops, so everyone knows what is supposed to be there and can easily see if it is not. It is similar to the woodworker who paints silhouettes of his hand tools on the wall to show where they belong, and to quickly, visually highlight when they might be missing.

Sustain (Shitsuke)
Again, 5S is not meant to be a one-time project. It should be an ongoing activity in the practice, to keep things organized, and to be continually improved. Management oversight, 5S audits, and continued improvement are the key to ongoing 5S success.

A New Paradigm For Veterinary Practice Management

 

There is a new paradigm, a new methodology, with proven results over many different industries including human health care. The new model is the Toyota Production System (TPS), better known in the West as Lean, for its consistent ability to deliver both quality and value without the waste and frustration that we see in so many organizations.

Over the course of 70 years, Toyota has grown from being a small, domestic, truck manufacturer in a devastated post-war Japan to being the largest auto maker in the world, for a time in 2012, even surpassing America’s industrial revolution icon, Ford Motor Company. Additionally, they have been profitable in every one of those years except three. How has Toyota been able to accomplish such milestones? By relentlessly pursuing a strategy of operational excellence, which includes a leadership style and organizational culture that is very different than most companies.

Lean is not just a set of tools. Toyota’s own website describes their production system as being a combination of:

1. Technical tools and methods
2.  Management methods
3. Philosophy and mindsets 

Practiced together, this results in an organizational culture that develops people in the organization and sets up the organization for long-term success. Toyota also emphasizes that the main goals are improving flow (in the case of healthcare, providing the right care at the right place at the right time) and ensuring quality at the source. There is a foundation of safety being a top priority (for patients and employees) instead of being a separate program or initiative. 

            Toyota also described their “Toyota Way” management system as having two key pillars:

• Kaizen (continuous improvement) (http://www.leanvets.com/2016/02/kaizen.html)
• Respect for People 

Being respectful in the workplace is not just a matter of being nice. It means challenging people in a constructive way so they can grow and perform to the best of their ability. “Respect for people” is a phrase that is also sometimes expressed as “respect for humanity.” This means not just showing respect for all stakeholders (such as customers, employees, suppliers and the partners, the community), but also respecting our human nature. For example, Lean leaders understand that we have human limitations, such as making more errors when we get distracted or are physically or mentally exhausted. This drives us to error proof systems to help prevent common human errors, rather than just asking people to be careful.

In the Lean framework, operational excellence is based concepts, such as the following:

1. Value (http://www.leanvets.com/2016/02/value.html) is defined from the customer’s point of view.
2. Work relentlessly to reduce or eliminate waste (http://www.leanvets.com/2016/01/in-japanese-word-for-waste-is-muda.html).
3. Build a culture of continuous improvement.
4. Standardize work to improve flow.
5. Make problems visible and react quickly.
6. Understand problems and solve them at their root cause(s).
7. Demonstrate deep respect for workers and all stakeholders. 

Successful practices realize that long-term success comes from satisfied clients. Clients should truly feel we have their best interests at heart. Hopefully, they would choose our practice not necessarily because we are less expensive than another practice, but that they received value for the hard-earned money they spend with us. We are responsive to their desires, and we value their time as much as we value ours. Satisfied clients help resurrect the idea of positive, direct ”word of mouth" advertising.