Lean methodologies, KPIs and the NHS: A recipe for trouble?

The concept of lean originated from Toyota and is founded on a model of continuous product and process improvement and the elimination of non-value added activities. The value adding activities are simply only those things the customer is willing to pay for; everything else is waste, and should be eliminated, simplified, reduced, or integrated.

One of the significant aspects of lean is that of key performance indicators (KPI). The KPIs by which a plant/facility or organisation are judged will often be driving behaviour, because the KPIs themselves assume a particular approach to the work being done.

In the NHS, KPIs are used to examine and compare performance across NHS organisations. These indicators focus on areas such as length of stay, costs per episode of patient care and number of staff employed. Many assess efficiency within the service, whilst others examine clinical performance. The intention is to define a service and judge its effectiveness and KPIs also provide benchmarks to implement incentives and sanctions in an effort to improve overall quality. However, there is little or no evidence of what sorts of incentives and sanctions actually work to drive up quality.

For example, a Child and Adolescent Mental Health Service (CAMHS) that has approximately 100 referrals per month, has KPIs that define service levels with regard to how referrals are managed. Urgent cases need to be seen within 24 hours, with a follow up within a week. Another KPI is that young people who require assessment but are not urgent will be seen for a routine assessment within three weeks of the referral being made. There are also limits imposed regarding the number of cases not appropriate for specialised CAMHS who can be signposted to other services, for example local authority family support.

In terms of sanctions, if a young person is not seen within that period, the service will be penalised with a reduction in funding of £30,000. In a team that is already undergoing budget cuts and staff losses, it is hardly surprising that meeting KPIs dominates the management of the team, and leads to an emphasis on getting though as many assessments as possible. The downside of this emphasis is less attention being paid to the actual interventions and therapies provided for young people and their families; caring for desperately troubled young people has become simply a matter of meeting targets.

It is important to recognise that these KPIs were established by the commissioners of the service, and agreed by the senior managers of the service, none of whom have any clinical experience of working within CAMHS. This process also provides an insight into a significant flaw in the artificial ‘internal market’ of the NHS; those specifying and agreeing services may have little knowledge of the service and often do not consult with the practitioners.  

Another KPI specifies a DNA (did not attend for appointment) rate of 10%, so not only is the practitioner's time wasted at a cost to the service, but the service is punished by financial sanctions if the DNA rate goes over 10%.

One of my concerns with the lean culture is that it pays little attention to the wider impacts an organisation can have on the context in which it operates. For example, by ordering parts’ just in time’ from external suppliers, the external suppliers are bearing the costs of uncertain revenue streams and fluctuating demands, which may tempt them to cut costs in other ways; perhaps by employing staff on fixed term or temporary contracts – thus shifting uncertainty down to the workers themselves.

Other criticisms of lean are that lean practitioners may easily focus too much on the tools and methodologies, and fail to focus on the philosophy and culture of lean, or that management decides what solution to use without understanding the true problem and without consulting shop floor personnel. As a result lean implementations often look good to the manager but fail to improve the situation.

Whilst many hold up Toyota as an exemplar for lean working, it might be borne in mind that earlier in February, Toyota announced it is recalling 1.9 million of its Prius hybrids, 30,790 of which are UK-registered, because of a computer problem that could cause the vehicle to stop. This follows a series of recalls over many years as listed below:

Sep 26, 2007 – US: 55,000 Camry and ES 350 cars in "all-weather" floor mat recall

Nov 02, 2009 – US: 3.8 million Toyota and Lexus vehicles again recalled due to floor mat problem, this time for all driver's side mats.

Nov 26, 2009 – US: floor mat recall amended to include brake override and increased to 4.2 million vehicles.

Jan 21, 2010 – US: 2.3 million Toyota vehicles recalled due to faulty accelerator pedals[ (of those, 2.1 million already involved in floor mat recall).

Jan 27, 2010 – US: 1.1 million Toyotas added to amended floor mat recall.

Jan 29, 2010 – Europe, China: 1.8 million Toyotas added to faulty accelerator pedal recall.

Feb 08, 2010 – Worldwide: 436,000 hybrid vehicles in brake recall following 200 reports of Prius brake glitches.

Feb 08, 2010 – US: 7,300 MY 2010 Camry vehicles recalled over potential brake tube problems.

Feb 12, 2010 – US: 8,000 MY 2010 4WD Tacoma pick-up trucks recalled over concerns about possible defective front drive shafts.

Apr 16, 2010 – US: 600,000 MY 1998–2010 Sienna minivans for possible corrosion of spare tire carrier cable.

Apr 19, 2010 – World: 21,000 MY 2010 Toyota Land Cruiser Prado and 13,000 Lexus GX 460 SUV's recalled to reprogram the stability control system.

Apr 28, 2010 – US: 50,000 MY 2003 Toyota Sequoia recalled to reprogram the stability control system.

May 21, 2010 – Japan: 4,509, US: 7,000 MY 2010 LS for steering system software update.

July 5, 2010 – World: 270,000 Crown and Lexus models for valve springs with potential production issue.

July 29, 2010 – US: 412,000 Avalons and LX 470s for replacement of steering column components.

August 28, 2010 – US & Canada: approximately 1.13 million Corolla and Corolla Matrix vehicles produced between 2005 and 2008 for Engine Control Modules (ECM) that may have been improperly manufactured.

February 22, 2011 – US: Toyota recalls an additional 2.17 million vehicles for gas pedals that become trapped on floor hardware.