Today, we continue our series of posts on the Health CEOs for Health Reform -- a New America Foundation coalition of industry CEOs and physicians committed to improving our health system.

Gary S. Kaplan, MD is the Chairman and CEO of the Virginia Mason Medical Center in Seattle, Washington. With Dr. Kaplan's leadership and the implementation of the Virginia Mason Production System, Virginia Mason has become one of the top-rated hospitals in the United States. To see Virginia Mason in action, check out the video below:

Virginia Mason Production System

In an earlier post, Dr. Kaplan reminded us that "Nearly half the $2.6 trillion in the U.S. health-care system is waste... More than a trillion dollars...adds no value for patients and sometimes even causes harm."

In 2002, the Virginia Mason Medical Center in Seattle, Washington, began implementing a program designed to reduce cost while improving quality, safety, and efficiency. Today, the hospital estimates it has saved $11 million, decreased waiting times, and increased productivity and safety. They call their strategy the Virginia Mason Production System (VMPS) and model it after the Toyota Production System. (Yes -- you read that correctly, they modeled their health care delivery system after a Japanese auto manufacturer).

Why Toyota? The idea behind the Toyota Production System is that those closest to the work are the best qualified to figure out the most efficient way to get the work done. All work should add value. In the case of cars, it means every task on the assembly line should be relevant to the final goal: producing a safe, affordable car. In health care, it means that clinicians and caregivers are spending all of their time caring for patients, rather than doing other tasks that don't add value to the patients' health or experience in the hospital.

The benefits include:

• Patients spend more time with providers, and VMPS tools and processes help providers deliver the best possible care with zero defects.
• Patients benefit from greater safety, fewer delays in seeing physicians for care, and more timely results and treatments.
• VM staff benefit by having less rework and greater opportunities to care for patients -- one of the primary reasons many choose health care as a profession.
• The organization benefits because it operates more efficiently. Ultimately, savings are reinvested to support VM's mission to improve patient health and well-being.

Working with Employers

Dr. Kaplan cites a challenge from employers to reduce costs and increase quality as one source of inspiration for the success of VMPS. In 2004, Virginia Mason began work with several employers, such as Starbucks, Costco, Boeing and Microsoft, and the insurer Aetna to analyze and reform their health care delivery system into what Dr. Kaplan calls marketplace collaboratives. To create marketplace collaboratives, Virginia Mason works with stakeholders and utilizes the Toyota production principles to "deconstruct" and then reconstruct the delivery of care. Each collaborative focuses on a specific issue, such as back pain and migraines, and works on making the treatment less expensive, more efficient, and of higher quality. (Stop and think about that one for a moment -- care that's cheaper and better?)

The Washington Post gives an example of a marketplace collaborative in action. Back pain was a common complaint among Starbucks employees. In response, the employees' doctors often recommended an MRI. MRIs usually don't yield much useful information about the source of back pain, but they do yield a lot of profit to Virginia Mason. The marketplace collaborative solution for patients with back pain was to start them on physical therapy first, rather than wait for a costly -- and often useless -- MRI. Aetna helped Virginia Mason compensate for the lost MRI revenue by upping reimbursement for physical therapy. "Today, the majority of Starbucks employees with back trouble return to work within 48 hours," Dr. Kaplan told the Post.

In a video presentation at the Health CEOs event, Dr. Kaplan reiterated the values and goals of his organization,

At Virginia Mason, we are committed to reducing the cost of care, and this work and commitment is energized by our demonstration that it is truly possible. We know the pathway to affordability is the pathway of safety, quality, and prompt access to care. I invite all of you, policymakers, health plans, employers, and patients to join with us in this important work.

More details about the Health CEOs and their recommendations for delivery system reform are available in this white paper.