First-Mover Labs Reveal Success with Lean & QMS

Timing aligns with Institute of Medicine’s call for all providers to become “continuous learners”

CEO SUMMARY: There is good news for those clinical labs and pathology groups currently operating robust Lean, Six Sigma, and process improvement programs. The Institute of Medicine’s new report calls for all healthcare providers to rapidly transform themselves into ‘continuously learning’ organizations. These developments met with a welcome reception at the recent Lab Quality Confab, where pathologists and lab administrators discussed their labs’ innovations.

IT SHOULD BE BIG NEWS in the lab industry that the Institute of Medicine is calling for all healthcare providers to become “continuously learning” organizations. For early-adopter labs and pathology groups, this creates an opportunity for them to gain competitive advantage over their slower-moving peers.

The Institute of Medicine (IOM) issued this recommendation on September 6, 2012. That is when it publicly released its latest report, titled “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America.”

Authors of the IOM report state that the American healthcare system will not meet the challenges of increased clinical complexity and the skyrocketing cost of healthcare unless it radically changes the status quo. Specifically, the IOM says that healthcare providers, including clinical labs, must become much faster at identifying useful technologies and innovations outside healthcare and adopt them with deliberate speed.

Authors of the IOM report wrote that “Achieving higher quality [health]care at lower cost will require fundamental commitments to the incentives, culture, and leadership that foster continuous ‘learning,’ as the lessons from research and each care experience are systematically captured, assessed, and translated into reliable care.”

The IOM also wrote “Americans would be better served by a more nimble healthcare system that is consistently reliable and that constantly, systematically, and seamlessly improves.” This new call to action by the IOM was acknowledged by speakers at the Sixth Annual Lab Quality Confab that took place earlier this month in San Antonio, Texas. “The timing and direction of this important new report by the Institute of Medicine is deliberate,” stated Robert L. Michel, Editor-In-Chief of THE DARK REPORT during his keynote address at Lab Quality Confab.

“Healthcare policymakers at the IOM are admitting that the pace of innovation within the American healthcare system is inadequate and needs immediate redress,” he stated. “Lab executives and pathologists should not ignore this new call to action by the IOM. Instead, they should obtain a copy of this report and incorporate its recommendations into their lab’s strategic planning process.”

In calling attention to the importance of the IOM’s new report, “Best Care at Lower Cost,” Michel reminded the Lab Quality Confab audience of how the IOM’s 1999 report “To Err Is Human” signaled a major policy shift that continues to the present time.

Policy Recommendations

“Both ‘To Err is Human’ and ‘Crossing the Quality Chasm: A New Health System for the 21st Century’ which IOM published in 2001, contained policy recommendations that unleashed powerful forces of change that continued into the present,” observed Michel. “As one exam- ple, think of how accreditation guidelines evolved to require hospitals and other providers to measure patient satisfaction, then demonstrate improvement in these measures over a defined period of time.

“However, most of us would acknowledge that, even within progressive hospitals and physician practices, substantial cultural and institutional barriers still act to slow down the pace of innovation and change,” he continued. “A careful reading of ‘Best Care at Lowest Cost’ reveals that the IOM predicts failure of the American healthcare system if it continues on its current trajectory.

“On the other hand, there is time and opportunity to turn this around,” added Michel. “The IOM makes the argument that hospitals, physicians, and other providers must develop an organizational culture of innovation and a willingness to go outside healthcare to identify new technologies and new management methods.

Medicine’s Complexity

“Only then does the IOM believe the American healthcare system will be able to cope effectively with the growing complexity of medical care and the demand for health services that already exceeds the capacity of the system to meet this demand,” emphasized Michel.

It is Michel’s view that the IOM’s new report is intended to cause a fundamental change in the management mindset of all providers, large and small. “Traditionally, hospitals and physicians have been slow to adopt new technologies and new management models that have already gained wide acceptance by other major industries,” he observed. “By issuing this report, the IOM is attacking that status quo.”

These newest calls to action by the Institute of Medicine will be considered good news by any hospital or laboratory organization that currently has Lean and process improvement programs in place. These providers are already moving down the path of continuous improvement.

Looking Outside Medicine

Further, these clinical labs and pathology groups actively go outside healthcare to identify “best practices.” They want to incorporate these “best practices” to meet the challenges of improving clinical quality while reducing and eliminating errors.

One example of going outside laboratory medicine and healthcare was presented at Lab Quality Confab by keynote speaker Richard J. Zarbo, M.D., D.M.D. He is Senior Vice President and Chair of Pathology and Laboratory Medicine at Henry Ford Health System in Detroit, Michigan. There are four acute care hospitals and 32 medical centers in this health system.

The theme of Zarbo’s presentation was the adoption of single piece/small batch workflow in histology and surgical pathology at Henry Ford Health. His pathology lab handles 80,000 surgical pathology cases and 85,000 cytology cases each year.

Zarbo’s laboratory team is using the work principles first described by Henry Ford, and the management principles of W. Edwards Deming, known as the “Henry Ford Production System.” These were the methods that inspired Taichi Ohno, of Toyota Motor Corporation and resulted in Toyota’s just-in-time (JIT) and Lean manufacturing successes.

The Lean journey for anatomic pathology at Henry Ford Health began in 2004. It is now in its eighth year. During his presentation, Zarbo showed the specific steps the lab team took to reduce the number of steps between accessioning and case sign-out by 31%—with equal gains in the reduction in average turn- around time, reduction of errors, and improvement in quality.

Vacuum-Sealing Tissue

But what caught the full attention of the audience at this year’s Lab Quality Confab was how the Henry Ford pathology department went outside of healthcare to borrow the technology used to vacuum-seal food and apply it to vacuum-sealing tissue specimens at the point of collection.

“What does Kielbasa sausage, pathology staff safety, and pre-analytic tissue specimen quality have in common?” asked Zarbo during his presentation. He then showed a photo of a vacuum-sealed package of Kielbasa sausage as is commonly found in a supermarket. Next to this was a photo of a colectomy tissue specimen, also in a vacuum-sealed plastic bag.

Zarbo had a ready answer to his question. “By having the surgical team vacuum-seal and refrigerate the tissue specimen before transport to the pathology laboratory, we are reducing the use of formalin, widely-acknowledged to be a dangerous chemical,” he pointed out. “Reduced exposure to formalin makes it safer for staff working in operating rooms and in histology.”

Zarbo also noted that there are direct cost savings that result from using vacuum-sealing for tissue specimens. “By not using formalin at all, we save money for those specimens,” he said. “Also, we can use much smaller amounts of formalin within the vacuum-sealed tissue container should it be necessary to use formalin with a tissue specimen.”

The other innovation happening with the pathology laboratory at Henry Ford Health is the use of rapid, formalin-free microwave processing. This allows the lab to produce a continuous flow of small batches of processed specimens. It also means that the tissue, because it is preserved, can be used for molecular and genetic testing.

ISO 15189 Accreditation

There were several sessions at this year’s Lab Quality Confab on the topic of ISO 15189 and how its quality management system (QMS) provides a more effective foundation for ongoing continuous improvement in the laboratory organization.

For example, keynote speaker Kathy McCloy, the Quality Assurance Director at Laboratory Corporation of America, discussed the lessons learned from implementing CAP 15189 across five different lab testing facilities. In fact, LabCorp is further along in its understanding and use of 15189’s QMS than any other public laboratory company in the United States.

Another laboratory which recently earned accreditation to ISO 15189 is Nationwide Laboratory Services, based in Ft. Lauderdale, Florida. Marvin Lessig, M.D., Medical/Laboratory Director, provided insights into how adoption of the QMS is helping the lab staff establish an organizational culture of continuous improvement. This directly contributes to improved workflow, better quality, and reduced costs. There are additional benefits that accrue from the reduction and elimination of errors, as well as enhanced morale and greater productivity of the laboratory staff.

‘Continuous Learning’

From THE DARK REPORT’S perspective, there are additional threads that connect the Institute of Medicine’s call for “continuous learning,” a growing interest in adopting a QMS by hospitals and other providers (via ISO 9001 certification, for example), and the need by healthcare regulators for better tools to ensure the safety and quality of medical care in this nation.

Take the statements of the Food & Drug Administration (FDA) about its interest in regulating laboratory-developed tests (LDT). Since the early 1980s, the FDA has required medical device manufacturers to follow good manufacturing practices (GMP).

GMP and QMS are close relatives. Thus, it is reasonable to speculate that one way that the FDA could establish an acceptable regulatory framework for LDTs would be to incorporate a QMS, like ISO 15189, into whatever final regulations it promulgates. After all, in making such a decision, the FDA would have the credibility of the fact that ISO 15189 has been chosen by a steadily growing number of countries as the basis for medical laboratory accreditation and/or licensure.

IOM Puts Down A Marker

That is not to overlook the most important development. The Institute of Medicine has put down its latest marker by publishing “Best Care at Lower Cost.” This is the newest attempt to change health policy and motivate all providers— including clinical labs—to adopt the principles of “continuous learning.” This is another powerful reminder that labs would be well-served to adopt Lean and similar management methods sooner rather than later.

Institute of Medicine Lists Sources of “Poor” Healthcare

IN ITS LATEST REPORT, the Institute of Medicine (IOM) provided examples to highlight the service and performance gaps within healthcare, compared to non-healthcare industries that have been much faster to be innovative and adopt new technologies.

Below is a partial list of items that the IOM provided as examples to show how far behind the American healthcare system is, compared to other industries:

On use of information technology…

  • 20% of patients reported that test results or medical records were not transferred from one place to another in time for an appointment.
  • 25% of patients said their healthcare provider has had to re-order tests to have accurate information for diagnosis.

On managing complexity…

  • 229 other doctors are involved in treating the average primary care physician’s Medicare patients.

On making healthcare safer…

  • 1/3 of hospitalized patients are harmed during their stay.
  • 1/5 of Medicare patients are re-hospitalized within 30 days.

On improving transparency…

  • 63% of patients don’t know how much their care costs until they receive their bill.

Promoting teamwork and coordination…

  • 50% of adults report problems with care coordination, notification of test results, and communication among their doctors.

Partnering with patients…

  • Less than half of patients receive clear information on the benefits and the trade-offs of treatments for their conditions.

Decreasing waste, increasing efficiency…

  • 1/3 of healthcare expenditures—an estimated $750 billion—don’t improve health.


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