We develop a lean readiness framework and an assessment methodology to quantify the readiness of healthcare institutions for implementing lean. We use stakeholder theory and work with a lean implementation team responsible for process improvement in a healthcare group to develop the framework. The framework uses fuzzy based input derived from the stakeholders of the healthcare institution to generate an overall ranking through ideal solution technique. The assessment method derives input from the readiness scores shared by various stakeholders. The ranking suggests future improvement areas to prepare the healthcare institution for a lean implementation project. We provide an alternative perspective of assessing the lean readiness of healthcare institutions before beginning a lean implementation project for both researchers and practitioners. Our research is the first to develop a lean readiness framework for healthcare institutions and demonstrate it using an assessment technique. •We propose a stakeholder-based lean readiness framework for healthcare institution.•We develop a procedure for assessing the readiness of a healthcare institution.•We report experiences of deploying the framework in a US healthcare institution.•The readiness of stakeholders is quantified and ranked with future recommendations.•We discuss a lean readiness laboratory initiative for testing pilot lean projects.