GM Toyota and Healthcare

I was on vacation with my wife and good friends for the last week or so and blogging was put to the side while we enjoyed Napa, good company and good food. I will change the newsletter format a bit including links to posts that have caught my attention.

I wrote about the analogy between healthcare and the airlines, today our analogy switches to cars. The entire story can be found at This American Life. Once upon a time there was a GM plant in Fremont California, one of the worst of the worst; poor output and equally poor quality. In a last ditch attempt to save the plant (and the jobs) GM partnered with Toyota to build cars. I love the “Toyota system” a more meaningful response to automation than the principals of Frederick Taylor that GM employed.

Frederick Taylor.jpg

"What Henry Ford had basically designed was a system … to simply get the volume out. Get the product out the door. And someone later will worry about the quality. If we have to repair it, we'll repair it.

So one of the most fundamental things that Toyota did was take that and turn it on its head. So now we tell the plant floor, don't you worry about the production volume. You worry about quality. The last thing we want is to have a lot of defects flowing down the line that we have to repair later."

Sound familiar? In the rapidly disappearing world of fee for service world, volume is king. We are in the midst of that transition to quality. The introduction of Toyota’s kaisen, continuous improvement dramatically improved the efficiency and quality of GM cars produced at the Fremont plant. But GM was incapable of transferring that knowledge to its other facilities. This was due, in part, to obstinate management, siloed interests and a disenfranchised workforce. But there was another force at play that was more difficult, at the time, to identify and describe.

"Workers could only build cars as good as the parts they were given. …The team concept stressed continuous improvement. If a team got a shipment of parts that didn't fit, they'd alert their bosses, who'd then go to the suppliers to fix the problem. Sometimes they'd realize the problem was in the part's design, and Toyota engineers would go back to the drawing board and remake the part to address the problem workers were having on the assembly line. All the departments in the company worked together.

…But the one thing you don't see is the system that supports the NUMMI plant. I don't think at that time, anybody understood the large nature of this system. General Motors was a kind of throw it over the wall organization. You know, each department-- we were very compartmentalized, and you'd design that vehicle, and you'd throw it over the wall to the manufacturing guys."

It was the system that supported the factory that made the difference and that was a decentralized collaborative network. As a vascular surgeon I am hospital centric but the reality is that my hospital work is an outgrowth of the health ecosystem I occupy. We all have had experience with the physician referrer that always sends the patient a bit too late; we have all been the physician that wrote the illegible note (if we wrote at all) to the primary care doctor who follow up on our patient.  And so it was for GM

"We didn't understand this bigger picture thing. All of our questions were focused on the floor, you know? The assembly plant. What's happening on the line. That's not the real issue. The issue is, how do you support that system with all the other functions that have to take place in the organization?"

The ecosystem of our healthcare work is the reason for our success and the cause of our difficulty in transferring knowledge.

"Pick your nautical cliche. Reforming General Motors was like turning around a battleship, one manager said. Another compared it to steering the Titanic with a canoe paddle. Jeffrey Liker says the cultural gap between NUMMI and the rest of GM was so vast that even with clear marching orders to change, some of the people running the company didn't know where to begin.

There was no vocabulary, even, to explain it. I remember one of the GM managers was ordered from a very senior level-- it came from a vice president-- to make a GM plant look like NUMMI. And he said, I want you to go there with cameras and take a picture of every square inch. And whatever you take a picture of, I want it to look like that in our plant. There should be no excuse for why we're different than NUMMI, why our quality is lower, why our productivity isn't as high, because you're going to copy everything you see.

Immediately, this guy knew that was crazy. We can't copy employee motivation. We can't copy good relationships between the union and management. That's not something you can copy, and you can't even take a photograph of it."

The strength of the hospital in particular and healthcare in general lies in the people that it ‘employs’ and the relationships they form with one another, our patients and our suppliers. We are a unique asset and understanding our value to the system and to one another is why a Geisinger succeeds and is so difficult to emulate. I would choose a different metaphor to explain our role. Picture a roiling sea with a small lifeboat tossed about with storm clouds hanging low around us. We are not the lifeboat, we are the sea and have the opportunity and responsibility to change course.

"I think when you're on the brink of possible extinction, it wakes people up, and they started changing things. But that's what it took. I mean, that's why Ford came out with the Ford Fusion. They spent $23 billion-- borrowed $23 billion, because they were almost out of business. … So basically, it's deathbed conversions."

And a last thought

"Since 2010, the NUMMI plant in Fremont has become symbolic of what's happening in the American car industry in a different way. It's now where they make the Tesla."