Improving Excellence in Healthcare with Dr. John Kenagy

Dr. John Kenagy is a well-respected physician, executive, academic researcher and lecturer with a unique view of healthcare. Forbes magazine featured Dr. Kenagy as “the man who would save healthcare.”

SPEAKING.COM: What are some of the common characteristics shared by successful healthcare organizations?

KENAGY: Excellent care is obviously important, but Centers of Excellence (CoE’s) have been around for a long time – it’s a 90’s term and times have changed. Success in 21st century healthcare requires more than excellence, it requires an organization to succeed in seeking value rather than volume. They work differently than traditional CoE’s, therefore I call them Centers of Value and Excellence (CoVE’s). Characteristics of a successful healthcare CoVE’s include:

a. A clear, consistent, meaningful and patient-centric Value Proposition.

b. Flexible, responsive, interdisciplinary care teams with everyone working at the top of his or her license.

c. Customizing care based on the evidence of what this individual patient needs now (evidence-based care).

d. Developing frontline staff to have the control and accountability to sense, respond and adapt to individual patient needs as a continuous system, not as a project or an event.

e. Simple, easily understood language and rules that enable everyone to work across disciplines and silos. Vertical integration created the volume-driven CoE’s of the 1990’s; horizontal integration across the continuum will create the value-driven CoVE’s of the 21st Century. There are many examples in my book Designed to Adapt: Leading Healthcare in Challenging Times (e.g., see pp. 15-25).

SPEAKING.COM: You coined the term “Adaptive Design.” Would you please share more about this concept and how it can foster patient satisfaction?

KENAGY: Good organizations in any industry, including healthcare, are great at “making, optimizing and selling” what they already do, but the data shows that 95% of those companies find it very difficult to innovate and do something completely different.

As a Visiting Scholar at Harvard Business School, my research focused on the 5% of established organizations that could optimize and were also great innovators. They had the ability to “sense, respond and adapt” as times were changing. I saw common characteristics of success in those 5% and translated them to healthcare as Adaptive Design.

One result is that every organization that has used Adaptive Design has improved patient satisfaction. For example, in one year–a nursing unit in a Mid-Western community hospital that was the pilot site for Adaptive Design–had the most improved Patient Satisfaction in their entire 17-hospital system (see Designed to Adapt, pp. 135-137).

Rather than trying harder with projects and consultants, the staff and management developed the capability to “sense, respond and adapt” to meet the changing needs of their patients in real-time.

Adaptive Design makes everyone accountable for value-generating, patient-centered care as part of their daily work, and it gives them the simple rules, skills and tools to deliver. That simultaneously generates a great patient experience.

SPEAKING.COM: Does your experience with the delivery and reception of healthcare apply to organizations that are not in the healthcare industry? And if so, how?

KENAGY: Absolutely! Although my career and heart are in healthcare, all of my research was done outside of it. I spent two years working with Toyota and Harvard Business School on a project that showed there are significant differences between Lean/Six Sigma and the Toyota Production System (see Designed to Adapt, pp. 9-14). My healthcare experience was used by Toyota to teach TPS inside of Toyota, so I know it was accurate.

I was an academic advisor to a consulting company that supported Intel in creating billions in new products. The senior executive team acknowledged they would not have identified without thinking and working adaptively (see Designed to Adapt, pp. 35-41).

Apple also has been a big influence in my thinking. Adaptive Design concepts apply to any complex, dynamic, unpredictable business environment – the rules are the same, only the nomenclature changes. In my healthcare work, I frequently give presentations to create learning experiences for Health System Board Members – those outside of healthcare always see direct connections and applications in their own businesses.

Among my other corporate experiences, I was also a Visiting Scholar for Professor Clayton Christensen at Harvard Business School.

SPEAKING.COM: Can you talk a little about why accountability is such an important concept in delivering healthcare?

KENAGY: In many traditionally managed organizations, both in and outside of healthcare, people have control over things for which they cannot be held accountable. In turn, people are often held accountable for things over which they have little control. That’s particularly true in healthcare management and at the frontline.

Adaptive Design gives local management and the frontline much more control over patient care delivery (see Designed to Adapt, pp. 150-151), but at the same time it holds everyone accountable to continually improve and simultaneously lower cost by eliminating the unnecessary— particularly the waiting, waste, rework, and workarounds that are ever-present at the point of care. We start by matching accountability to control at the patient level; then it becomes easy to deliver the regulatory results and data requirements needed to be called an ACO.

SPEAKING.COM: What are some examples of healthcare organizations successfully “sustaining innovation?”

KENAGY: Population health is a good example. We created Adaptive Design “Learning Lines” (see Designed to Adapt, pp. 98-99) in 5 different clinics in the Mayo Health System. A “Learning Line” is a place designated to become a real-time laboratory – an Adaptive Design “innovation incubator” at the point of care. Within three months those Adaptive Design clinics’ population health performance metrics started to improve faster than the rest of the Mayo Health System. In one year, Adaptive Design Mayo physicians had 122% improvement in population health of diabetics compared to the rest of the physicians in the Mayo system.

Because Adaptive Design is a self-sustaining system, not a project, it is imbedded in the work of everyone, everyday. Four years later those Adaptive Design clinics had not only maintained that improvement difference, they had significantly increased it, leading the Mayo Health System in improving population health “one patient at a time.”

SPEAKING.COM: Would you share some tips on how to build physician and staff accountability?

KENAGY: People hold themselves accountable to a system that works. The five keys to success Adaptive Design uses (see Designed to Adapt, pp. 95-125) in creating an accountable learning system also define the Characteristics of Success of a CoVE:

a. Set at a clear, consistent and meaningful Value Proposition, such as “Ideal Patient Care”. Everyone knows this is their purpose, and that it will make a difference for patients.

b. Start small, with one (or more) Learning Lines, at the frontline, close to the patient so you prove you can safely and productively match accountability to control.

c. Use local people, not consultants, to do the work – they become successful, inspirational, internal role models for creating new value through Adaptive Design. For example, they will lead the development of interdisciplinary care teams and evidence-based care systems across the continuum.

d. Simple rules make a difference quickly. Adaptive Design is a system of simple rules: clear, consistent, safe, effective. Management sets direction and establishes the rules, the staff and physicians follow the rules because they succeed at continually designing and redesigning the flexible, evidence-based care that drives new value. Key Success Factors include:

i. Simplicity and authenticity eliminate ambiguity and assumptions
ii. Rapid, real-time experiments link information to action to success
iii. Success increases trust, optimism, mastery and momentum

e. Leadership then replicates and scales success. The result is a self-
sustaining system that develops flexible, responsive interdisciplinary care teams to deliver evidence-based, patient-centered care as part of everyone’s daily work – low risk, high reward, and fast. It’s a self-sustaining system because it rapidly yields success – clear, consistent and authentic – and people in healthcare love to succeed.

SPEAKING.COM: What are some of the most important future trends in healthcare information technology during the next five to ten years?

KENAGY: In Adaptive Design, we see behaviors rapidly change as people sense, respond and adapt to new technologies. Those behaviors, in turn, drive results in Key Performance Indicators (KPI’s), particularly: increased productivity; decreased costs; improved patient, staff, physician & management satisfaction and engagement; increased wellness and population health; improved financial strength and profitability. Those KPI’s are lagging indicators because they don’t become available for weeks to months after the behaviors of staff, physicians and management create them.

Adaptive behaviors are measurable. They then can become predictive analytics that give management information about their future KPI’s weeks to months before peer organizations.

We’ve had discussions with technology companies about creating an Adaptive Capacity Index that could be customized to dashboards from the frontline, through the management chain-of-command to the CEO and Board. It’s a great opportunity to create actionable information, customized and relevant to the specific responsibilities of the person who gets it – low risk, high reward, fast.

SPEAKING.COM: What changes do you foresee in healthcare management?

KENAGY: Traditional, volume-driven management, both inside and outside of healthcare, focuses on moving information up to decision makers in meetings (often many, many meetings). Then the data is analyzed, prioritized and solutions are implemented back down to the frontline. This type of management is not going to go away; it works great in stable, predictable, mechanistic environments. In addition, we clearly see a trend toward a frontline, value-driven, “sense, respond and adapt” Adaptive Design approach in complex, unpredictable service lines.

In turn, using Adaptive Design continually creates new best practices that can be replicated and scaled throughout the organization. Particularly in healthcare, the successful managers of the future will develop, align and coordinate very rapid decision-making, close to where information is being generated and value created at the point-of-care.

The key to successful innovation in every industry we have studied is using a simple, self-sustaining, replicable system to design, do and improve complex work, in real-time, both within and across disciplines and silos. It’s not rocket science, it’s Adaptive Design: patient-centered, value-driven horizontal integration – low risk, high reward, fast.

SPEAKING.COM: What are some of the biggest health threats in the United States today and how can your ideas help solve them?

KENAGY: Healthcare is becoming increasingly unaffordable. Healthcare disparities are well recognized, we struggle to make progress to eliminate them, and high costs increase the disparities. But from the Adaptive Design point-of-view, those are all great “sense, respond and adapt” opportunities. I believe this is the greatest time of opportunity in healthcare since the introduction antibiotics. We can make a difference. Current systems are perfectly designed to deliver exactly what we are currently getting – less care for more cost.

Buckminster Fuller was right; “You never change things by fighting the existing reality. To change something, build a NEW model that makes the existing model obsolete.” That’s Adaptive Design: more and better care at continually lower cost and a great “sense, respond, adapt” opportunity for all of us – low risk, high reward, fast.

SPEAKING.COM: Why is your message about changing the way we deliver healthcare crucial to patient safety?

KENAGY: Patient safety is something that happens NOW, not in the future after some project implementation or consulting engagement, weeks to months after the event. It is a “sense, respond, adapt” opportunity. In Adaptive Design, frontline staff are not just empowered, they are given the guidance, methods, skills and tools to say “stop, this is not safe” and, most importantly, “what about the way we are working now created this safety problem, and how will we change our work to eliminate this problem now.”

The analysis occurs as close in time and place to the problem (opportunity) as possible, as part of every day work. An experiment on a new safer way to work starts ASAP and the experiment is continued until the new, safer way of work is verified and stable. And it all happens using only the resources needed to solve this problem now.

For example, a hospital in Iowa’s Unity Point Health System reduced serious injury falls to zero within months of initiating an Adaptive Design analysis on all falls. All Adaptive Design units develop world-class Culture of Safety scores. Why? Because safety is imbedded in everyone’s daily work.

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