Failure demand

By Alina Hsu

There’s something of a war going on between John Seddon and the Lean community (see comments on this post in Mark Graban’s Lean blog), but I credit Seddon with defining the concept of failure demand:

… demand caused by the failure to do something or to do something right for the customer

Failure demand occurs in many types of hospital contexts: errors, lack of coordination or communication, workaround processes, delays in getting needed tests or other services, readmissions – all create extra work and increase the burden on hospital personnel who are often already overburdened. One difficulty in dealing with failure demand is that the process that caused it is often different than the process that has to deal with the consequences, which requires cross-functional collaboration. (If you introduce this concept in the context of value stream mapping, you’ve already got your cross-functional team in place!) Many hospitals are making great strides in reducing or eliminating these kinds of failure demand.

We can take this a step further: How many ED visits are the result of earlier failures to provide care or to provide the right care? How many hospitalizations for health crises are the result of ineffective management of chronic conditions? Emergency Departments which have analyzed demand have reported 22% to 55% demand for non-emergent care. The failure here is well before the patient arrived in the ED: a failure of things like primary care, preventive care, education, access to care. Further, many acute conditions which do legitimately (now) require ED visits or hospitalization are also due to failures earlier in the health care stream.

In my opinion, the real power of the concept of failure demand is that ideally, we should not build capacity to deal with failure demand. Everything we do with failure demand is by definition waste. Instead, we should work to eliminate it. So, by enlarging our perspective – looking at the larger system of care – we can see that a lot of the legitimate services that hospitals provide are in fact waste, because they are necessitated by the failure to provide appropriate primary and preventive care.

Now, in a hospital setting, we can’t generally refuse to treat, even when the need is failure demand. However, we can work to eliminate it. Hospitals are in a difficult position here, because those earlier failures were often on the part of our primary and preventive care systems, so in a sense they can say that it’s not their job to worry about those earlier failures; they are tasked with filling all the gaps and dealing with all the crises. And what can they do, anyway? Sometimes it may seem that these failures are outside the hospital’s scope of influence or control.

But, as I blogged about earlier, some hospitals, HMOs, and health care systems are starting bold partnerships with private physicians, clinics, employers, and even schools to try to improve health and healthcare outside of the hospital. And providing better care upstream does reduce the need for ED visits and hospitalizations.


  1. Alina Hsu

    @Mark Graban Yes, there is often a conflict between patient value (health) and hospital finances, and I too am glad that some hospital systems and medical groups are already finding ways to refocus on keeping people healthy.

  2. Alina Hsu

    I agree that failure demand is essentially the same concept as rework. However, coining the term failure demand helps an organization to look at external failures as well as internal ones, and to work with other organizations to reduce those external failures. Toyota did this as well, without Seddon’s concept, but I find that many Lean organizations focus too exclusively within their organization’s boundaries.

  3. An increasing number of health systems are working on this problem, including Group Health in Washington. They have the advantage of being insurer and the provider of primary and speciality care.

    They have helped reduce emergency room visits by 28% and admissions by 6% thanks to their lean-based “patient centered medical home” efforts.

    It’s hard for a hospital to do the right thing to reduce emergency room visits, since that often hurts the hospital financially. So, yes, it’s a rather large big picture issue. But I’m glad that people are working on this – better to keep people well than to just treat them after the fact.

  4. Anonymous

    This was previously called “rework” and Womack & Jones covered this subject in their book “Lean Solutions” and the Fujitsu case study. Seddon makes good points about how organizations need to get to the root cause of this failure demand, improving the system instead of just dealing with the calls in the more efficient way, but I’m not sure he deserves credit for “inventing” the concept.

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