Changing Culture With Lean

As state Medicaid programs expand to cover more people, it is more important than ever to take a closer look at the work processes and apply Lean principles. Lean is a way of thinking that challenges the status quo, defines value from the customers’ perspective, removes waste from processes and encourages people to seek continuous improvement. It typically takes an organization 5 to 10 years to fully transform into a Lean culture.

The Lean approach started in the manufacturing industry but is now used in all industries, including health care and government. It is a natural fit for state Medicaid agencies, which administer health coverage for their state’s low-income citizens and those with disabilities. With its focus on continuous improvement and customer needs, Lean offers these agencies a method for cutting through the noise of health policy (and politics) to focus on their public mandate of improving health outcomes while managing costs.

Colorado’s Medicaid agency, the Department of Health Care Policy and Financing, adopted Lean in 2012 in response to Governor Hickenlooper’s mandate for leaner government. The agency leadership believed in the value of the Lean approach and prioritized three pressing projects to focus on: one concerned the hiring process, one focused on managing a Medicaid member’s eligible out-of-pocket expenses and the third was not so much a process improvement but an organizational planning initiative. This third project was not well-suited to Lean, and the other two were complex issues involving multiple state regulations and stakeholders.

It was a difficult way to begin our journey with Lean. These projects quickly became large, unwieldy and time-consuming, with partial implementation of solutions stretching out more than a year. For some projects, full implementation appeared to be a distant dream. Some wondered if Lean could really work in our agency, but a small group of committed people were not ready to give up. We still believed in the power of continuous improvement to make our work better.

When we first adopted Lean, we used a self-evaluation tool, the Organizational Lean Maturity Assessment, which indicated our agency was definitely at a level one, an introductory level, for Lean. It was understandable that the agency was struggling to get their first big projects off the ground. As the Department’s Lean Leader, I decided it was time to try a new approach.

Therefore, I decided a grassroots strategy that emphasized training, educating and coaching staff on Lean tools and methods would be the most successful approach. I listened to the voice of the customer (staff) who said they did not have time to analyze and fix the broken processes through Lean projects, because there simply was not enough time to accommodate the extra work required.

Based on this feedback, I launched Lean “Quick Hit” sessions. These sessions are requested directly by staff, are completed in four hours or less, focus on a very specific problem, improve cross-divisional collaboration, create solid documentation and result in actionable solutions.

This grassroots approach has produced significant results. More than 200 staff, or almost half of our agency’s employees, have participated in Lean trainings, projects or Quick Hit sessions. In the most recent employee engagement survey, 86% of agency employees were familiar with Lean, and 71% had participated in a Lean project.

In addition, we have documented more than 180 processes, which is helping to reduce slow, inefficient processes by identifying ways to better use existing technology and resources. This aligns with our mission to improve health care and access while demonstrating sound stewardship of financial resources. We are creating “green,” sustainable processes that are customer-focused.

It has been two years since the inception of Lean at the Department, and we are now solidly at level three (demonstrating success) in the training and coaching category of the Organizational Lean Maturity Assessment, one year ahead of schedule. We expect to reach level four (a successful, mature deployment) for all categories of the assessment within the next three to five years.

Eventually, employees will no longer need as much help with Lean process improvement, and will do their own “Quick Hits” as they continuously improve. But for now, it is good to have a way to embed the continuous improvement and customer-focus principles into daily work. It has generated energy, excitement and buy-in for continuous improvement.

Incremental changes like this are sometimes interpreted as failures, or at best, concessions. Leaders sometimes worry that only big, dramatic changes take root and grow. But, according to over 30 years of process improvement research, it’s continuous improvement that wins the day. That’s true even when the change is the Lean initiative itself.

In an environment of too much to do and not enough resources to do it, Lean can be the best thing that happens to a state Medicaid agency. But the agency should expect to apply the Lean principles to the rollout itself. Small changes made over time are better than no changes at all when the state’s health and financial wellbeing are at stake.