Innovators, Then and Now: How Taichi Ohno Did It, and How You Can, Too

Sept. 17, 2019

It’s impossible to peruse the healthcare professional literature these days without coming across the concept of the shift from volume-based payment to value-based payment, and for good reason. As the Medicare program’s actuaries have noted, the overall cost of the U.S. healthcare delivery system is set to explode from the current $3.823 trillion a year—already an astonishing sum—to $5.963 trillion a year by 2027—a breathtaking statistic.

Faced with that cost cliff, the public and private purchasers and payers of healthcare are forcing providers to go into the core of patient care delivery and in many cases, reengineer it from the ground up, in order to begin to substantially bend the cost curve.

As David W. Bates, Aziz Sheikh, and David A. Asch put it in their March 2017 article in Health Affairs, “Innovative Environments In Health Care: Where And How New Approaches To Care Are Succeeding,” “Health care today needs to evolve substantially. The costs of care are too high, especially in the United States, and both the safety and the quality of care need to improve. Innovations in care delivery come about in large part to address deficits in cost, safety, and quality. At the same time, innovations have the potential to offer new and improved approaches to diagnosis, therapy, and self-care management.”

The core challenge? Every “easy” form of cost reduction has already been applied in healthcare, beginning with such areas as hospital supply costs and environmental (housekeeping) services. So that leaves the leaders of patient care organizations with only one option: to tackle inefficiencies and lack of standardization in core patient care processes—and that is a huge proposition. Indeed, many of the most innovative patient care organizations are leveraging principles taken from manufacturing—Lean management, Six Sigma, and the Toyota Production System (TPS)—and are increasingly applying them to healthcare.

In the introduction to his 1998 book, Becoming Lean: Inside Stories of U.S. Manufacturers, Jeffrey K. Liker, a professor of industrial and operations engineering, notes that the leaders of the Toyota corporation developed their own version of Lean management “in Japan out of necessity. They did not have space, they did not have money to hold a lot of inventory, they could not afford to integrate vertically into all their parts businesses, and they needed to build vehicles for a relatively small market demanding a large variety of vehicles. Under those conditions, it was simply impractical to follow the lead of Henry Ford and make large volumes of black Model Ts. So Taichi Ohno had to innovate, and innovate he did—on the shop floor through trial and error, eventually discovering that building cars and parts in a one-piece flow in a leveled and mixed production sequence was vastly superior to large batch and queue production. Over time, the Toyota Production System was created.” And since then, various performance improvement methodologies—Lean, Six Sigma, and TPS, have been successfully applied to efforts to improve clinical performance in core areas of patient care delivery.

It is in that spirit that we, the editors of Healthcare Innovation, are pleased to share with you the unveiling of our Innovators’ Showcase.” You will find a variety of very exciting case studies in our special report, all involving patient care organization leaders’ initiatives to reform and rework elements of core operational and clinical processes, sometimes using formal performance improvement methodologies, other times not; but in all cases, tackling the issues in strategic, organized ways. Just as Taichi Ohno found in auto manufacturing, success in healthcare transformation will require a lot of trial-and-error work, but the rewards cannot be overestimated. We hope you enjoy and benefit from this special editorial package.

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