Book Review: Is Mayo Clinic Efficient or Effective?

Nov 2

On July 4th of this year, I posted an entry that asked if you rather have an efficient or an effective surgeon. One commentator (Alex), made the case he wanted both.I argued that effectiveness should be the talisman, not efficiency. This in no way implies that making certain processes and procedures more efficient isn't a worthy objective, but that should not be the over-riding goal of a Professional Knowledge Organization (PKF).A business isn't paid to be efficient, it's paid to create value. The buggy whip manufacturers were a model of efficiency. So what? What if you're efficient at doing the wrong things? Peter Drucker believed there was nothing more useless.I recently taught some courses in Rochester, MN, home of the Mayo clinic. Indications of this prestigious medical brand are ubiquitous, with Rochester boasting more hotel rooms that the Twin-Cities area, to handle the 520,000 individual patients it serves annually.While browsing the local bookstore, I found an autographed copy of Management Lessons From Mayo Clinic, by Leonard L. Berry and Kent D. Seltman. The former author is a scholar I respect tremendously for his prior books on customer service. [All references and page numbers in this review are from the hardcover edition of the book].I've also been involved in a dialogue with some Master Six Sigma consultants from Rea & Associates, a Top 100 CPA firm. We've been discussing and debating the benefits of Lean Six Sigma (LSS) as it applies to running a CPA firm.I'm skeptical. I've never been a big fan of TQM, ISO 9000, Statistical Process Control, etc., specifically for a PKF. I concede these methods make sense for a factory, and even a service organization, but we believe there are more effective methods for PKFs. Our Trailblazers are a testament to this hypothesis. Not one of them uses LSS.Sure, I've read how hospitals, doctor's offices, etc., are applying LSS to increase efficiency. Dandy, I say, keep it up. But at the end of the day, effectiveness and patient value is what matters most.Perhaps this book can shed some light on how Mayo Clinic does so well, creating one of the most famous and valuable brands in medical history throughout the world.The book is an interesting read, containing much that will make the proponents of LSS and efficiency happy.Yet, overall, it supports our hypothesis here at VeraSage that effectiveness is the ultimate north star of a PKF. But before examining the arguments pro and con for efficiency vs. effectiveness, let's take a look at something everyone agrees on—excellence in customer service and creating value outside of our walls is the ultimate goal of any organization.The Spirit of Service at Mayo ClinicThe clinic opened more than 140 years ago, only to be called "Mayo Clinic" in the early 1900s. It used no advertising or marketing, not even having a marketing department until 1986, which from then to 1992, consisted of one person. Today it does recognize that its brand is its most valuable asset, defending it vigilantly.Two additional clinics were opened in Scottsdale, AZ and Jacksonville, FL, spreading the famous Mayo brand of medicine across the USA. It also operates hospitals and other physician groups, along with an online medical knowledge base accessible to the public.In 2007, the clinic employs some 42,000 medical and administrative people, generating $7.3 Billion, operating as a not-for-profit. For those quantitative types, that's $173,809 per employee, the same limit, it seems, as CPA firms are up against, which we've also been discussing.The clinic prizes quality and consistency over growth, confirming the market share myth we constantly discuss that growth for the sake of the growth is the ideology of the cancer cell, not a viable, sustainable, profitable business.The six core values of the clinic are:

Continuing pursuit of the ideal of service and not profit.
Continuing primary and sincere concern for the care and welfare of each individual patient.
Continuing interest by every member of the staff in the professional progress of every other member.
A willingness to change in response to the changing needs of society.
Continuing effort toward excellence in everything that is done.
Continuing conduct of all affairs with absolute integrity [pgs. 8-9].

Mayo pays all team members, including physicians, a straight salary. There is no incentive or profit sharing. This incents doctors to spend as much time as necessary with each patient, and to refer them to other experts on the team. All physicians are trained to listen, as well as hear, each patient, ending examinations with the question, "Is there anything else?" Not your typical HMO doctors.The clinic only hires people whose values are consistent with the above, the logic being "I think we have a harder time making people [be] nice than we do making people technically better." [pg. 147].The authors point out that customers are like "detectives," they are constantly searching for clues about an organization's service and excellence. Clues fall into three categories:

Functional clues
Mechanic clues
Humanic clues

The first deal with the technical quality of the service—reliability and functionality.The second are more intangible, including the sights, smells, sounds, tastes, and textures. Think of the message your furniture, artwork, cleanliness of equipment, etc, sends to your customers.The third clue deals with the service providers themselves, including dress, appearance, body language, tone of voice, enthusiasm, etc. [pgs. 160-61].Functional clues deal with the "what" of the service experience, while mechanic and humanic clues deal with the "how" of the experience.Two doctors that are both functionally and mechanically brilliant may create totally different humanic clues if one of them has a surly, or unconcerned, bedside manner.Functional clues are important in meeting customer expectations, while humanic clues are most important in exceeding customer expectations.Mayo has also conducted studies on what patients want from a physician experience, the most important characteristics being:

Confident
Empathetic
Humane
Personal
Forthright
Respectful
Thorough [pgs. 177-78]

While reading the book, you certainly get a feel for how important these values and service standards are to the operations at Mayo, ranking it along with many outstanding service providers such as Disney, FedEx, American Express, Lexus, among others.Mayo's long-term performance is especially commendable when you consider that health care delivery is probably the most complex, risky, personalized, customized, labor-intensive, and uncertain service offered in any economy.I read this book as if I was going to argue for efficiency over effectiveness; or that efficiency will lead to effectiveness; or that at the least efficiency and effectiveness are not mutually exclusive, looking for every clue of what Mayo did to increase efficiency.So let's now look at how Mayo deals with improving efficiency, then we'll examine how it handles effectiveness.Efficiency at Mayo ClinicOn page 73, the authors write:

In this single organization, all operations revolve around serving patients efficiently, not just effectively.

Because Mayo is an integrated organization, it's not uncommon for a patient to arrive one day, have an examination, whatever diagnostic tests are needed—from blood tests, Cat Scans, MRIs, etc.—and be in surgery the next morning.Again, the authors write:

Equipped with a stopwatch, the Clinic's industrial engineers have literally wheeled a "patient" between buildings and floors to establish time intervals between hundreds of different appointment locations and then entered that data into the rules applied by the computer that creates patient appointment itineraries [pg. 78].

Mayo teams use process improvement such as Lean and Six Sigma, which have produced the following results:

Net operating income increased over a three-year period by nearly 40 percent.
Variation in the selection of imaging protocols or doses of contrast media by the radiologists was significantly reduced.
A six-minute reduction in imaging time per MRI patient (via Six Sigma) yielded an extra appointment per day per scanner and a more than $4 million gain annually.
Timely, 24/7 access to diagnostic studies in the hospitals led to earlier diagnosis and fewer days in the hospital.
Chest radiograph technicians reduced the amount of walking they did by 90 percent per male chest patient, and patient time in the department plummeted fivefold.
Patient satisfaction for chest radiography service showed a significant improvement [pg. 85].

Impressive indeed, though I doubt the first result was created solely due to LSS. And all consistent with our view that process improvement is important.We don't change our weight by weighing ourselves more frequently, or accurately. We have to change our process.I believe most of the above effects could also be achieved by doing After Action Reviews. But I will concede that there is nothing wrong with trying to do things more efficiently, as long as the results and value to the customer are not diminished.But what about effectiveness?Effectiveness at Mayo ClinicTime and motion studies are all well and good when thinking about how a patient is taken from one diagnostic test to another. They may even make sense for some procedures that are done by technicians and nurses, such as drawing blood, preparing someone for surgery, etc.Contrast this mindset with Mayo's commitment to effectiveness through creating an outstanding customer experience:

Since 1928 Mayo has employed a carillonneur who plays regularly scheduled concerts six times per week, at noon and in the early evenings as patients and employees are outside the buildings [pg. 42].
The clinics have invested heavily in architecture, artwork, and decor that enhances that calms and enhances the patients' sense of confidence.
At the Jacksonville clinic, memorial services are held for patients who die, attended by staff and physicians, with a reception afterwards [pg. 56].
A wedding was hastily scheduled in the AZ clinic for a mother who was bedridden and was not going to be able to see her daughter get married, with hospital staff from throughout the building attending and/or observing [pg. 56].
Since Mayo deals with particularly difficult cases, sometimes assembling a multi-disciplinary team of specialists is required. As the authors writes: "It means extra effort, being creative, and 'finishing the job rather than looking at the clock'" [pg. 63].
"Good physician leaders will guide administrators, for example, away from 'efficiencies' that might compromise the best interests of the patient'" [pg. 105].
"To sustain high productivity, Dr. Bartley concludes that the major management objective is to 'foster an environment of unity and trust'" [pg. 122].
Mayo began posting performance outcomes by each practice site on its intranet in October 2007. These outcomes were placed on Mayo's Internet site in December 2007 for public viewing [pg. 231]. Similar to FedEx sharing package information with customers, and what we at VeraSage advocate—publishing your customer's KPIs on your firm's Web site.
Mayo managers should ask this question constantly: "If our organization were to suddenly disappear, would customers really miss us?" If the answer is yes, then "What would they miss?" is the logical follow-up question. This forces the organization to understand what drives customer experience and brand preference. Certainly efficiency is part of this, but does anyone doubt the humanic clues and effectiveness, as illustrated by the points above, are the deciding factors?

There's another component to effectiveness, which is Knowledge Management. There's a chilling story in the book about a patient that died because Mayo didn't know what Mayo knew.In other words, a doctor who didn't understand an anomaly on an EKG ended up prescribing the wrong medicine. But another doctor on the same campus was an expert in just this anomaly, had written papers on it, etc. He would have been able to prescribe the correct procedure and medication.Mayo has now developed its Enterprise Learning System that offers knowledge to the team, hopefully exactly when they need it.The book cites some interesting studies. One that concludes it takes 17 years to translate 14 percent of original research to the benefit of patient care. Another that shows about one-half of the care delivered by physicians in the United States is not based on current best practices [pgs. 233; 235].So, would you rather have an efficient or effective patient experience?Perhaps the opening story by a Mayo physician in Chapter 1 answers this question best:

The best physicians and healthcare providers are part engineers and part artists. What the artist does is why I became a physician [pgs. 1-2].

And another story from a grateful patient:

When I came to Mayo I expected good medicine well practiced. What I did not expect was a beautiful artful environment—Miros, Calders, and Rodins. Thank you for caring for my soul as well as caring for my body.

Most PKF firms don't deal with the life and death decisions that Mayo has to on a daily basis. But we believe that most PKFs spend far too much time focused on efficiency at the expense of a more valuable customer experience. I remain skeptical that LSS can improve caring for another's soul.The most important things in life simply cannot be measured.We also believe that Value Pricing, no timesheets, project management, After [and Before] Action Reviews, Knowledge Management, and creativity and innovation—such as allowing team members 20% time to innovate, as Google does—will not only bring the benefits that LSS does, but will also create far more value over and above what LSS ever could achieve by simply studying process and efficiency.Indeed, in a PKF with knowledge workers, effectiveness should be your talisman, not efficiency.