It’s nice to see a major publication covering Lean and, especially, Lean in healthcare. This time, it was USA Today who, again, did a better job than the WSJ normally does.
The article highlights some of the opportunities and successes that hospitals are having using Lean methods such as kanban, just-in-time, and other Lean practices.
The New York City Health and Hospitals Corp. has recognized a one-time savings of $5 million from implementing a “just-in-time” materials delivery system. By rationalizing the types of gloves that physicians and staff use, they are also saving $4 million a year in supply costs.
St. Vincent Indianapolis Hospital used Lean to help reduce the number of walking steps for emergency department nurses by 78%.
Delnor Hospital in Illinois was able to use Lean redesign to eliminate the need for a planned $80 million expansion. This isn’t an uncommon story when hospitals really start thinking Lean. Instead of the old mindset of “give me more,” hospitals find that they aren’t using the space they already have as efficiently as they could. Or they find, like Delnor did, that “better flow” is the answer instead of “more rooms.”
Denver Health CEO Patty Gabow told of their savings of $27 million over the past few years and ThedaCare CEO Dean Gruner estimates “estimates $20 million was saved before they quit counting. He says if all hospitals achieve similar results, $400 billion could be saved on Medicare and another $1.3 trillion on the non-Medicare side.”
I wish the article hadn’t focused so much on the cost saving side, although that’s a reasonable thing for the paper to focus on considering that 99% of our healthcare reform debate is about cost, not quality. They go hand in hand, as you see in the St. Vincent’s case. Freeing up time for nurses to spend more time with patients correlates with quality and outcomes and it also corresponds to better patient flow (less walking = less delay).
As is often the case, the interesting part is the reader comments.
One person asked, basically, if the CEO made the changes (as the news headline suggested), we need more administrators! I’m certain they said this with tongue firmly in cheek. The headline and the photo of Mr. Aviles, the CEO from NYC, sort of plays into the business media perceptions that CEOs “do everything.” For example, Jack Welch “implemented Six Sigma” at GE. The role of leader and certainly the CEO — that’s important, but this is another case of glorifying the sole leader at the top of an organization. It’s not exclusive to healthcare.
Another reader comment asked if “just in time” allowed for enough supplies for a catastrophe, like a major car wreck. Well, I would hope that would be the case. Many supplies won’t have perfectly level usage every day, so any well-designed “just in time” or kanban system will have what we call “safety stock” — a planned “extra” inventory level to protect the hospital (and patients) from above average usage (or delivery problems).
Goal #1 with kanban was always “keep the line running.” This was true in manufacturing and it’s especially true in healthcare. Make sure healthcare providers have what they need to get the work done for the patients. That doesn’t mean you can hold infinite inventory. That’s a problem for hospitals WITHOUT a just-in-time system — what happens on a day with a horrible catastrophe? Or if H1N1 is really bad? Well, hospitals plan for that, just as they plan for a regular seasonal flu season and maybe bump up their inventory levels for the season.
“Labor accounts for 70% of the cost of hospital care, Hafer says, which means some hospitals will resort to layoffs and reduce nurse-to-patient ratios.”
One reader clearly thought Hafer was recommending layoffs and reduced ratios. A Lean thinker knows he meant that it’s UNFORTUNATE that some organizations will resort to just cutting labor. That’s not the Lean way. ThedaCare, a Simpler client, follows a “no layoffs due to Lean” philosophy that Simpler preaches and my old organization, ValuMetrix, preaches as well.
So I think Hafer was somewhat misquoted, or at least quoted out of proper context, which is too bad.
They did quote him fairly when Hafer said:
“Changes people fear, such as rationing care, are not necessary to meet the goals,” Hafer says. “Improving patient outcomes and reducing costs are not tradeoffs â€” they complement each other.”
That’s absolutely right.
Final thought, a comment from another reader that sums it up:
I can tell you first hand, that this “Lean” stuff really works. I have not found a better process out there for engaging the hearts and minds of the organization’s staff AND to make dramatic rapid improvements that help patients, staff, and the the hospital! If every hospital in the US (or Canada for that matter) adopted the philosophies of Toyota, we could transform healthcare without need for Government control. Nice article!
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