Value Stream Organizations and Integrated Practice Units

Value Stream Organizations and Integrated Practice Units

Value Streams

Two weeks ago at the IHI annual Forum, I helped Brian Maskell present the basics of value stream management. The half-day session provided the context and walked through the details of a value stream management tool that Brian calls a Box Score.

Brian shared a picture that shows how to apply value streams.

What’s a value stream? It’s a family of patient care processes with similar flows that includes all the people, equipment, and facilities that support patient care within that family of care processes. The value stream has few or no resources--machines, equipment, people, and departments—that need to be shared with other value streams. The value stream starts where the patient first enters the care process and extends through to when the patient exits the care process.

Once a value stream is defined and planned, you have to operate and improve it. How do you do this? A value stream manager is appointed and is accountable for cost and quality performance. Weekly review of performance measures and a disciplined approach to standard work, problem-solving and targeted improvement projects provide the means to control and improve performance.

In Brian’s view, the Box Score is the fundamental measurement tool for value stream management. The table below is an excerpt from a Box Score developed for an elective hip and knee replacement value stream.

Typically, it has three batches of measures: operational measures (five to seven quality and efficiency measures); measures of capacity for key resources; and a value stream profit and loss statement. Brian has used the Box Score in six ways with his manufacturing and service clients:

  • A basis for weekly performance reporting and monitoring
  • As adjunct to value stream mapping
  • To assess impact of kaizen events and continuous improvement projects For decision making (choosing among alternatives)
  • To understand implications for major long-term projects
  • For monthly planning

Integrated Practice Units

Michael Porter’s work on improvement of health care value starts with a key proposition: care should be organized around conditions or patient characteristics in primary care. See for example Porter and Lee, “The Strategy that will Fix Health Care”, Harvard Business Review, October 2013 (available here)

Porter refers to the core organization of care as an integrated practice unit (IPU). An IPU has specific attributes, as described on the Institute for Strategy and Competitiveness’s website, accessed 18 December 2016:

  1. Organized around the patient medical condition or set of closely related conditions (or patient segment in primary care)
  2. Involves a dedicated, multidisciplinary team who devotes a significant portion of their time to the condition
  3. Providers involved are members of or affiliated with a common organizational unit 
  4. Takes responsibility for the full cycle of care for the condition, encompassing outpatient, inpatient, and rehabilitative care as well as supporting services (e.g. nutrition, social work, behavioral health)
  5. Incorporates patient education, engagement, and follow-up as integral to care
  6. Utilizes a single administrative and scheduling structure
  7. Co-located in dedicated facilities
  8. Care is led by a physician team captain and a care manager who oversee each patient's care process
  9. Measures outcomes, costs, and processes for each patient using a common information platform
  10. Providers function as a team, meeting formally and informally on a regular basis to discuss patients, processes and results
  11. Accepts joint accountability for outcomes and costs

The IPU and the Value Stream Organization

IPU attributes 1, 4, and 5 describe attributes of a complete value stream, with attention to comprehensive care. Attributes 2, 3 and 7 align with the principle that resources should be dedicated to the value stream and are not shared with other value streams. Attributes 6, 8, 10, and 11 address management practice and accountability. Only attribute 8, a specific recommendation about care management, is not immediately apparent in the value stream organization proposed by Maskell.

I conclude that IPUs look a lot like value stream organizations. If so, the methods of value stream management apply directly to IPUs, providing specific ways to operate and improve IPUs.

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