Operational Blindness: What’s Costing Hospitals Millions

0:00Hey, this is Dr. Jake Taylor Jacobs, host of Bread to Lead. And this episode is something different. I think it'll be extremely special. This is me speaking at RMBC Conference, their business summit on operational blindness. This is a keynote edition of the Bread to Lead podcast. If you like more episodes like this, I would love to be able to give you all just an earshot of what goes on when I speak on the stage. I hope you enjoy it and let us know if you want more of this.

0:35I don't take the lead

0:41Since the age of 12 I've been about my father's business At the age of 30 He sent me to his venue Can y 'all hear me? Now I'm gonna sit down for a second Because I kind of get anxiety When I start to speak I've spoken on You can hear the shakiness in my voice a little bit I've spoken on some of the largest stages, tens and thousands of people, TEDx, done all the works. But when I talk to you healthcare folk, it just gets me all, y 'all get me anxious. These judgy eyes. What's this next smart guy got to say? And the truth is, y 'all made me go talk to my counselor. I went and told him y 'all. And that's my counselor.

1:33I said, why with this group of people do I get so anxious? The nicest people ever met some of the most thoughtful leaders of any industry that I participated in. Why? And my counselor said, after a decade of being a counselor, I think you finally found an industry that matters to you. So when you speak, you know that motivation or a concept or thought theory, a structure, a system, a programmatic way of doing something, somebody can take it, go implement it in their hospital and it can ultimately save a life or harm one. It's not the same as talking to the entrepreneur that owns a tissue or toilet tissue business and get on amped up.

2:19Go clean butts. They make a mistake. You just have some stains in your underwear. That's it. But it's nothing that truly, truly, truly can affect the life of a human being. Before coming into health care, my team, as you guys can see, I'm not going to act like he doesn't exist. This is my head of marketing. And we're known, my little ragtag group, we're known as ambulance chasers, tornado chasers, if you will. We like to chase the most difficult problems. and soft. You can call it because I'm the why kid. I got a bunch of whoopings, not for being bad, just because I asked why all the time. And what I came to find out, no matter what organization, no matter what industry we participated in, why just irritates people?

3:13Because the truth is, we don't understand why. So it's just easier to not address the problem at hand. That's what happens. Give you a story. I think my anxiety is gone now. I was at my mother's house and she cooks mean fried chicken. I'm talking about the type of chicken that'll make you want to slap your mama. Unfortunately, it's my mom cooking it. And she cooks this fried chicken in a cast iron skillet. What? Small. She's chef in the way. And one day I said, Ma, it's a thousand of us in this house. Why are you cooking all of this chicken in a small cast iron skillet? Take me forever to do the same thing that you can do with a bigger cast iron, at least.

4:15She said, baby, because this is just, she starts to make up this excuse. Because when it's smaller, you know, it heats up faster and it keeps it hot. And that's how I get it crispy. And your grandma and great grandma, they all did the same thing. And I said, huh, told you I was the white kid. So I can cook a little bit too. I went home and I got me a cast iron skillet. But a bigger one. Because I just wanted to test the theory. Is mama right? Or is this one of them folk glory folktales that you just say because you don't know the answer to my question? Lo and behold, not only did I cook more chicken, it was golden and crispy, just like mama and grandma made it.

5:02So I went back to my mama and I said, well, mom, I thought you said that the smaller cast iron skillet heats up more. And it's the only way that you can keep the brown even and all those things. She said, you know, I just never thought to get a bigger skillet. So I go to my grandma. Hey, G-Lady. I'm her favorite. She said, hey, baby. I said, why do y 'all use small cast iron skillets? Her response was different. She said, well, it's because it puts down to the meat faster. I said, well, that's strange. Mama says something different. Well, where did y 'all get it from? My mama. So is my great-grand.

5:50Well, my great-grandma has passed, but my Aunt Barbara is still around, her best friend, her sister. And I said, Aunt Barbara, why did y 'all use small cast iron skillet? She said, baby, that's all we can afford. So imagine three generations having this concept that this is how you cook something, only to find out when you keep asking why they just use the skillet that they could afford and kept it. And so what it had me thinking is that organizations all around the country have these isms, these myths of how things have always been because they've been passed down from generation to generation and nobody has taken the time to ask.

6:31What am I going to say? Oh, y 'all read my notes today. This feel like church. Anybody from Austin? Anyone? Anyone from Austin here? Anyone from Dallas? From Dallas here? You from Dallas? Yeah, you look like you from Dallas, brother. Got a little drip to you. I see the socks. Feng Shui. How long does it take to get from here in Dallas to Houston? To Austin? From Austin to Dallas? Three and a half. Eight. Three and a half hours. Say it like you're proud. Three and a half. Did y 'all hear what he said? What did he say? Three and a half hours. He said it with confidence. No question. If I take that same question I ask somebody that's never driven a car, only walked, never been on the bus, never been on a plane, never been on a scooter, only walked.

7:22How long does it take to get from here in Dallas to Austin? They'll say three to four weeks walking. The question is, who's right? They're both right. The only difference is the vehicle. the next question i asked someone i say hey that's driven a car all their life never playing never a bus a car how long does it take to get he said the thing three and a half hours if i go to a middle class american community that they fly they don't really travel by bus or by car by walking or bike how long does it take to get from here in dallas to austin they'll say about an hour and a half give or take getting through the terminal to get on the plane to get to Austin.

8:04The question is, who's right? They're all right. The only difference is the what? Vehicle. Now, if I take that same question to the Orchard Will that have only flown jet, how long does it take to get from here in Dallas to Austin? What do you think they're going to say? 30 minutes on a hopper. They always like to make it sound like real different. It's just a little small play. It's really not really cool, especially when you go into states that got a lot of turbulence, you're on the plane, you think you're going to die. You're just wishing that it was a bigger plane. But imagine this concept, same destination, same place, but the only difference is how fast you get there in the most efficient way possible.

8:46And with every way that you get there, it takes more time, more resources, more finances, more money. But the experience gets better when you start to question sacred cows that we've addressed this entire time. And so for just the moment. I want us just today to just act like you, my friend. I'm not going to sell you anything. You won't see a thing that's going to say just for$2.99. Change your life. You hear that enough? Today is about talking about belief and changing concepts that you've held so dear that's actually destroying your organization is honestly destroying your own peace. You came into healthcare to make a difference.

9:27And sometimes when I look in some of you all's eyes all over the country, seems like you feel like you're fighting, but that spirit of optimism and joy is just dying. And I get it. So I just want to challenge us to think something different. So I want to ask you something. Any NASCAR people here? All right, sister, I got one. So in NASCAR, we have the driver. They run the race. All eyes are on the driver. We know the drivers. They have the pit crew, the pit lane, the garage team, the hauler. See, the driver's the star. Pit crew on race day, those are the ones that are... When you see them in slow motion, it looks like butter.

10:13They're fixing a car in less than 11 seconds, and that car is hitting the road. It's a beautiful sight. Then you have your pit lane. That's the track where the action happens. You have your garage behind the scenes. They prepare the car, inspect every component. Without them, it seems like the driver doesn't race in the hauler, delivers the race-ready car to the pit lane on time, every time. All of these positions are important. Wouldn't you agree? You can't have an amazing pit crew with a terrible driver. It doesn't work, right? You can't have an amazing driver with a terrible pit crew. It doesn't work.

10:48And you can't have an amazing driver with an amazing pit crew with a terrible garage. Does that work? No. And then your transporter, your hauler, they have to care about the car to imagine if everything is perfect. But every time they haul the car, they mess up the driver's car. So it's crazy what it takes to have a flawless organization. Everyone has to actually care about the roles that you play and the positions that we have because each position matters. Now, there are some positions, this quite naturally, they get paid more because they're taking the most risk. But it doesn't mean they're more important.

11:25So when I look at the surgical service line, and I'm so proud about this, because when I came into the industry, the very first thing I did didn't sell a soul. Me and Donnie, my co-partner, my CEO there, she's been with the company for 20 years, started as a volunteer and worked her way up. Now she's the CEO after 20 years later. and her and the founder of the company found our ragtag group and had to convince us to come over here to healthcare. And the question I asked them, I said, it's not about money because we're fine. Can we make an impact? Is there true change that can be made or are people stuck in their ways that you can't create anything different?

12:00She said, no, transformation is needed. Hospitals are asked to actually operate a profitable hospital and nobody's actually been training on how to run a profitable business. So there's change that's needed. So I said, okay, we went all over the country for the first year. And you'll see in a little bit. And we, one-on-one, surveyed more than 180 people, leaders, periob leaders, C-suite, executives, SPD leaders. You name it, we've done it. One-on-one. Not a survey, not an email blast, not a text message. One-to-one, person-to-person, face-to-face, because it matters. What we found out, I'll share with that later with you.

12:41But here we have the surgical service line is the surgeon. They run the case, all eyes on them, but they can only run one case at a time. Your ORT, that's your pit crew. Get in there and just like the pit crew. The track, that's the OR. That's where everyone gets to shine. You get your lights on. Sterile processing is behind the scenes. That's your garage. The black box, everyone forgets about, but complains about when the rubber hits the road. And then your case car, that's the delivery transport team. The garage isn't support. The garage is part of the operation, not the evil stepchild. It's a part of the group.

13:25And the driver knows that if the car isn't ready, they lose. The driver respects the mechanics because winning depends on them. The crew chief It coordinates garages, the garage and pit crew as one integrated team. The team owner invests in the garage because they understand the ROI. Everyone's on the same team. Everyone shares the same goal. Everyone contributes visible and valuable. Contributes is visible and valuable. But imagine if NASCAR operated like most hospitals. Just imagine, just imagine all the things that we could be. Who knew Barney was my favorite singer? imagine all the places we can go and see imagination is fun for you and me i just want us to imagine the driver shows up on race day and expects the car to be ready but never talked to the mechanic or the pit crew it shows are like hey we're racing today let's go what car is going to be ready if you do get a car it's going to be a shabby car the mechanic finds out which car the The driver wants to race 30 minutes before the green flag.

14:35When the car breaks down mid-race, the driver blames the garage, but the garage isn't on the radio. It's not a part of your huddle. We'll just send information down and them people downstairs and figure it out because we're busy up here. The team owner cuts the garage budget because they don't generate revenue. The driver does. So the team owner says, man, what's matter is the pit crew and the driver. So we're going to cut this garage, slice it up in pieces and say, hey, I'm going to get what I need. because we just need to make sure we have the best driver and the best pit crew. Anybody can be a mechanic with this group.

15:09But that's not necessarily true. And after a loss, they debrief everyone except is a part of it except for the mechanics. This team will never win. And every minute your garage costs your driver is a minute of revenue that's gone forever, just like in surgeries. I'm not going to bore you with these statistics because I think you all already know it, how much it costs to run a hospital. In case you didn't know, a lot of hospital systems, more than 7-8 % of the revenue comes from surgeries. Coming from private sector, one of the things that we value most was not just the sales team, but also customer support and service delivery team.

15:48They're just as important as the people that sell. Why? Because you can sell the moon, promise the world. But if you have no one to help you deliver it, the result of that is catastrophic in healthcare. selling tissue you just just jump in the shower but anything else is different every minute every cancellation every delay actually matters so we talk about the health care severs the connection is completely crazy and it's kind of crazy because what we did with the hospital system that we were supporting was we convinced the C-suite of a hospital system to just give us two years with their SPD.

16:32And we talked to the VP of Periop, the ACNO of the hospital system and said, listen, we're not here to tell you all what to do. I just want to fix the relationship. they said yes what happened in 18 months we took a hospital that's historically known to be terrible in the midwest the SPD was the number one reason for causes of delay now they're last sterile processing department went from over budget 1.5 to under budget 1.5 we took them from having 36 FTEs to 24 FTEs and they operate in the arm and now in that same city that SPD department, most SPD folk work two jobs, multiple hospitals, because they don't get paid enough.

17:15So what do we do? We shrunk the team, made them more efficient, and paid them what they were worth. The highest paid SPD in the city. Hey, hey. They don't have to work one job. They're happy. They have respect from the OR. We bridge that relationship. And guess what's most important? The surgeons are happy because they can increase their volume. Because what we told the C-suite, We said, listen, if the SPD is not involved in revenue creation conversations, there's no way that we can actually help you. There's no way. So we did it and we changed it. And after that, now we talk to the president, CEO, like we're best friends and buddies.

17:51The first thing I told him, I said, brother, I don't want to be your friend. I don't want to act like I'm your friend, but I do want you to go home and know that when you leave your hospital, that it's all in the right hands. I know we get tired of those vendors that act like they're your friends. They ask you about your family. Hey, buddy. Hey, buddy. Just love you. Then you sell them. You sign. You don't hear from them until they want to upsell. Yeah, that's not what we want. So before we talk about what it costs your hospital, you wake up at 2 a.m. Not because something's wrong, but because you don't because you don't know something.

18:24You don't wake up at 2 a.m. not because something went wrong, because you don't know something went wrong. You're waiting on the call. Uh-uh, let me go back. You're waiting on the call, the email, the text, because you know something is going to go wrong. Imagine having anxiety going to work every day. You can imagine it because a lot of us live it. And then the doubt starts to creep in. I've been doing this 20 years. I should have known this. Why do I feel like I'm always one step behind? You start to wonder if you're actually good at this or if you've just been lucky. I'm gonna give you a little something, a little fun, small fact I found.

18:57Now, 1969, that's when the OR actually was standardized. 1969, that's when regulation actually happened. Do you know when regulation, the idea of regulation happened with SPD? Anyone? 2006. ST79 came about in 2006. We have some SPD leaders that are managing, running SPD that have been a part of a world where they learned the majority of their nuances, their trade in an unregulated environment. Do you know when Joint Commission made it their priority to say every time we visit a hospital, we're going to SPD? Anyone know the year? 2010. You're close. 2013. What year is it? How many years is that?

19:4413 years that SPD has been a part of the conversation. 13. And we wonder why. There's mayhem. So before you create a change, we have to assess something. And here's the craziest thing. You say, man, I've been here 20 years. I should know this. How can you know something when it never was the priority? You're never part of conversations. You just kind of threw it under the bus. OR is upset at SPD. SPD is mad because they just need to be mad because you mad. You know how we get mad. I'm mad because you mad because we mad together. But what happens is when you realize your counterparts that you need and depend on every day, haven't had the same amount of time or regulatory standards that you've had in development of training, you have a little bit more empathy and wanting to make something work with them.

20:35So I brought this to the C-suite's attention. It's funny what research and facts do. It kind of it kind of just brings things to life. Then we walked around. C-suite said, come downstairs. Now the president comes to SPD every single day. And can I tell you something? Metrics and numbers do lie. For an example, you hire somebody that's been at SPD 30 years. They say, man, I took all the travelers out and we're now staffed internally. It sounds good on paper. You cut the travelers cost. Now it's all local on paper, localized on paper. But your skill mix is wrong. You have 10 percent of your team that what we call a blue belt can operate in multiple zones.

21:14But 90 percent are under three years. Yeah, it looks good that we cut the cost, but the organization is absolutely going to struggle because the skill mix is off. Well, when you think about it, you roll it back. It sounds simple. But when there's high pressures to cut costs and not observe the system first, these are the things that we do. We do patchwork. We get this tech. We get this system. We get that product. We go to this conference. We take that process. and we don't actually think about reconstructing the entire system because we've never been prone or pushed to. And we're wondering why this hyena and lion relationship is always conflicting.

21:54And like I tell anybody, you can get new technology all you want. There's a lot of great vendors here, but you can't put new wood on a termite infested floor because the new termites are going to eat the what? The new wood. You can't slap lipstick on a pig and say it's a sheep. It's still oinks. But when we look at it, we say, man, they got to catch up. Let's just give them a budget. Let's approve them. SPD, what do you need? They don't know what they need. So then you get them what they need and it doesn't work. Now you say, I'm never going to get you what you need. and it gets worse. They get an agency in that promises they're going to change it, but they're just a bunch of patchwork people doing the same thing HRs do.

22:41Do an altar call all around the country. Charge your hospital arm and leg to have people that are underperforming. This is the truth. Hey, brother. Hey, what's your name? Chad. Hey, Chad. How are you? Pretty good. So these are the things that we deal with on a daily basis. So I like to do things very simple. I like to take things biblical really quick. There's a favorite book I got. It's Genesis. We may know about this book or not, but in Genesis, the creator of this world, being politically correct, Donnie, am I doing good? Yes. The creator of this world, in this book of Genesis, the first thing this creator did, it did not say, let there be light first.

23:18That's what everyone talks about. You know what he did? He hovered the waters. You know what waters mean in Hebrew? Mayhem, chaos. He didn't bring light first. He split the chaos first. and darkness. He assessed the problem before patching it. Before creating a world in a system, he assessed what was going on. So I look at an organization. I like to say, hey, we need an assessment. And the organization says, hey, no, we just need staff. And I say, hey, we don't want to work with you. And they say, hey, wait, wait, you don't want to work with us? I'm telling you, we need 10 techs. I'm telling you, there's a lot of other companies to go to because I don't want to deal with this hatchy, hatchy, getchy stuff.

23:59Came into healthcare to make a change. I want to work with the leaders that you don't want to make changes. And if you knew what the problem was, why is there a problem in the first place? So he hovered the waters. Then he split chaos, the waters that could not be controlled, from the waters that could operate in a system. Then he said, let there be life. And before humans were even brought to this world, he built systems. Did y 'all know that? systems that didn't have to need a human to run them. They just run on their own because this creator wanted to create a world where we didn't have to depend on how we would feed ourselves because the system, the ecosystem actually could produce it itself so that we can realize the system will move with or without persons.

24:40But we live in a society, not just in healthcare, but all over the world because we need notoriety and we need acceptance and we need the vision of everyone to see us. So we love to award heroism. When it's all on one person and then we award that person, then the other person coming up after you says, I need to be a hero. But I don't know about you all. I like to be a hero parent. I don't want to be a hero at work. I don't mind stretching the earth for my child, my baby, my bootleg, ooh, and my two sons. systems but at work I shouldn't have to do that I want to operate in the system but we've been saying this for 20 years and now you carry this weight alone you can't admit it to the board you can't admit it to your peers you can't admit it to your team so you carry it alone and the more senior you get the more isolated the weight feels because if you do say that you have a problem as a VP you think that that means that hey that means that I'm not fit for the job so we patch it we hide it we patch it we hide it we patch it we hide it we patch it we hide it and before you know we have a lot of an organization full of passwords with no system work.

25:49And the best way to build something is structure. So we talk about systems. Everyone has intelligence and everyone has technology. And all of a sudden, all of these 30-year-old companies now, the same systems and programs are now intelligent all of a sudden. New buzzword, new day, it's fine. But as an organization, you have to ask yourself, when there is no technology, how can we operate intelligently? When there is no technology or systems or structure, how can we move in a way that allows for us to move according to ensuring that patients, regardless of what type of surgery, can get back home to their babies the same way that you want to?

26:31So matters. And we don't want you to carry this along because what happens is here's the cost that no one measures. strain at home. You're present, but you're not present. Your spouse sees it. Your kids feel it. You're at the dinner table, but you're still at the hospital. You're there, but you're not there. The loss of joy. You got into healthcare to make a difference. Now you spend your days managing the aftermath of things that you never saw coming. You hired a rock star and you thought that it would change. And that rock star is not a rock star, but you can't fire them. She just have to now create all these difficult ways to get them to quit.

27:11But they won't quit. We talk about the health costs, blood pressure, sleep, weight. The body keeps score. You know the stress is taking years off of your life. The quiet fear. How long until this catches up to me? How long until there's a problem I can't recover from? And it's not your fault. That's what I want to tell you. It's not. The architecture of healthcare operations was never designed to give you the visibility that you need to lead at this level of complexity. It's not your fault. We just never had a system. And a system is just simply a series of programs that work succinctly together in order to produce an efficient outcome.

27:55And I'm sorry, the purpose of the lean belt system doesn't teach you how to restructure an organization from scratch. It teaches you how to make the current structure, assuming it is the most efficient structure, efficient. So this is why you can have all the black belt lean on your team and still have mayhem. Because lean was created in a world, Toyota, that already had a flawless system. And they just were making tweaks along the way. So what happens is you learn lean, you make it efficient and you make your workarounds efficient. But you don't deal with the symptom at hand. OR is underdeveloped or the SPD is underdeveloped.