aside A3 Deployment in a Managed Care Organization (MCO)

Throughout the nation, healthcare organizations are being introduced to new payment models. Up until recently, MCO’s received compensation for healthcare services in the form of payment in exchange for services (Fee for Service). In the past few years, new forms of payments are being introduced such as Capitation, Performance Based Pay, Shared Savings and/or Bundled Payment.

Additionally, a number of healthcare organizations are beginning to offer more services than they had previously, leading to a greater level of competition. As a result, many group practices are looking for ways to gain an edge over competitors, and at the very least, maintain their current patient count.

For these reasons, practices are increasingly focusing on cost reduction and patient experience. This was the case with the healthcare organization which I had the privilege of joining a couple of years ago. The ‘Center’ was staffed with 25 psychiatric and 15 primary care providers, and served people with Behavioral Health and/or Substance Abuse issues.

An initial organizational and leadership assessment led to the following observations:



Willingness to invest financially

Functional silos leading to unhealthy internal competition

Willingness of leadership to invest time in Lean transformation

Politics driven culture

Verbal acknowledgment of need to modify behavior

Lack of organizational strategy due to the number of programs)

The Continuous Improvement team and leadership agreed to a Lean pdca-circle-jpgdeployment plan, which consisted of:

  • A3 problem solving classroom training of 60 managers/front line employees
  • Identifying and solving chronic issues for maximum impact
  • Developing a coaching program: lunch & learns and “gemba” walks

Very early on, the results were significant and turned the heads of the Board of Trustees: 60 employees identified 74 A3’s in a 3 months time frame, for a total value of $1.37M. In 9 months, a total of 91 A3’s were completed, with a total value of $2.10M. Of that amount, $1.48M were realized! Click here to read about 2 A3’s done at the Center.

A3’s were reviewed by the Lean team, the financial team, appropriate divisional leaders and discussed with staff during ‘fishbowl’ events (the Center’s version of ‘shark tank’). A3’s were tracked by division and strategic areas of focus, and reported monthly at board meetings using a Lean scorecard. Very soon, the executive leadership became convinced of the powerful impact Lean can have!

Along with successes, here are a few lessons learned:

1- A Lean deployment program needs to be assessed for success. Metrics should be developed, tracked and reported regularly to an audience that includes leadership.

2- A training program without continued coaching assistance is not very effective. People learn in different ways and at different speed. Especially in the case of Lean tools, a hands on approach is very beneficial.

3- Tool training (A3’s in this case) is most effective in the context of employees beginning to own quality (quality at the line). That new ‘way of thinking’ should be reinforced and modeled by leadership and all influential employees.

4- Sustaining improvement is best done by ensuring standardized processes are documented and communicated systematically (see one, do one, teach one). Managers must be familiar with process modifications and respectfully coach employees to attain new work standards.

5- Improvements are most likely sustained in an organization which links its  improvement projects to a strategic plan that has been deployed properly.

This topic (ELSS slides) was covered during the Engineering Lean Six Sigma conference (ELSS) held in San Antonio, TX in September 2016. ELSS is a yearly conference organized by the Institute of Industrial and Systems Engineers (

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