By November 30, 2009 8 Comments Read More →

Hospitals Saving Millions with Staff Suggestions

DollarsIn the past week, I found two articles about hospitals that are engaging staff members through suggestion programs.  Employee suggestions are a core part of Lean and the Toyota Production System. There’s so much wasted potential when hospitals don’t get people engaged in improving their work and improving processes. This is wasted potential in terms of patient care not being better and hospitals not saving money, but also wasted potential in terms of not letting people feel good about improving their workplace (an example of the “waste of human potential” that’s often talked about as one of the “Eight Types of Waste.”

I’ve heard staff members at many hospitals complain that they’re expected to just show up and do their job — don’t try to make things better, don’t make waves, or you might get branded a “troublemaker.” Sad.

Toyota teaches their employees they have two jobs:

  1. Do their work (follow the standardized work)
  2. Improve their work (“kaizen”)

Do hospital staff and physicians have the same expectation? When you are expected to help improve how work is done, that’s your outlet for creativity and problem solving, even if your work is being done in a more standardized way. Let’s not be creative in figuring out how to insert a central line — let’s do it in a standardized way and be creative in finding ways that work better and lead to further reductions of infections.

From Kansas:

Staff ideas save money at Newton hospital

A Newton hospital has been recognized for cutting costs after a series of staff suggestions helped save the facility $1.7 million over the past year.

The baseline number that Norman Bodek often cites for companies like Toyota or Canon is that the company saves $4,000 per employee based on employee kaizen suggestions.

If you have a hospital of 2,000 employees — that’s $8 million a year in savings.

The article doesn’t mention Lean, but Newton Medical Center has the right idea about how to encourage suggestions:

Hospital spokesman Barrick Wilson said the ideas allowed them to save money, protect patient care and “protect the integrity of the work force by not having to have any layoffs.”

No layoff pledges or no layoff philosophies are becoming more common in the Lean healthcare movement. This is critical – if kaizen leads to layoffs, who would participate?

Gleason said hospital staff submitted 121 ideas and officials used 62 of those, some quickly and others as the year progressed.

That’s a 50 percent implementation rate. Toyota often gets cited as having a 90%+ rate — not that every suggestion is necessarily implementable, but the submitted suggestion is the starting point for a discussion between staffer and supervisor. If you define the problem (and not just make a suggestion), you can talk about alternatives and find SOMETHING to implement, even if it wasn’t the original idea.

The ideas included surgeons and operating room staff reviewing the supplies routinely kept on hand and finding they were wasting several thousand dollars with redundant items.

Gleason said other workers suggested switching to cheaper alternatives of products the hospital used. Some of those changes saved only a few hundred dollars but others saved thousands.

Lots of little ideas — they don’t all have to be a million dollar idea. We tend to focus too much on finding a few small ideas with HUGE cost savings. I’m sure there are more than 121 ideas… $1.7 million savings sounds great, but why didn’t they get more than 121? Was the systemic too bureaucratic?

From Ontario, Canada:

Cambridge hospital wants to cut 85 workers, but says care won’t suffer

This article DOES mention Lean specifically. And they also have a “no layoffs due to lean” committment, although they are looking to reduce 85 positions through attrition (not backfilling). The hospital is losing millions — they have to choice but to find cost savings. What better way than asking the staff?

Cambridge Memorial’s workers are eager to offer cost-saving ideas while maintaining and improving patient care, Martin said. More than 200 ideas have been received; many have already been adopted to allow the hospital to face a freeze in provincial funding at the same time facing increased staff costs from union contracts and operating expenses.

Martin was adamant care will not suffer at Cambridge Memorial. In fact, he said the staff-inspired ideas will improve care throughout the hospital.

“I think the community should be very pleased with what the (hospital improvement plan) has accomplished,” Martin said.

Hospitals are late to the cost-saving, “lean-process” mindset that private industry long ago adopted to operate more efficiently, Martin said.

Staff offered more than 200 ideas since September that helped find $3 million in annual savings. These include work-schedule changes, smarter ways to offer care, and more efficient ordering of supplies.

Protecting staff members is key. Also important is making sure that you’re eliminating waste, not just blindly slashing costs in ways that negatively impact patient care. Finding ways to improve quality will lead to cost savings.

How are things at your hospital? Are you encouraged to submit and help implement ideas? How is this working for you?


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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

8 Comments on "Hospitals Saving Millions with Staff Suggestions"

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  1. Anonymous says:

    I wonder if it's any coincidence that the 2nd hospital is near a Toyota plant?If they think they've overturned every rock and are done with just 200 suggestions, they don't understand kaizen yet! They need to keep pushing, every day, not beat their chests that they are done.

  2. Great post Mark. I think one of the things that makes the application of this more effective in hospitals is that the work and knowledge is more distributed. There are more specialities. Because of this, you must rely on more on the knowledge of those out in the process. Of course, looking for suggestions is one thing. Building the right systems to do so is also critical. There is a right way and a wrong way. I tried to explain a bit of the difference here: http://www.assemblymag.com/CDA/Articles/Column/BNP_GUID_9-5-2006_A_10000000000000193066

    Jamie Flinchbaugh
    http://www.jamieflinchbaugh.com

  3. Anonymous says:

    My hospital is about 6 months into our idea program and has generated about 1000 ideas or .5 for every employee. We have intentionally not put any effort into quantifying our cost savings. Our objective is to enable the frontline staff to learn to fix their own issues. Initially they ideas were focused on improving the work environment, but more and more ideas are focused in improving the patient experience. It has been very popular with staff with minimal effort from managers. Our goal for next year is 5000 ideas. Many small streams make a mighty river.

  4. Anonymous says:

    The novelty of idea programs in health care may demonstrate how insincere health care leadership is at improvement and employee engagement.Does anyone know the last time there was a presentation at an ACHE conference on idea programs? On the other hand, it probably is easier to hire consultants than implement an idea program.

  5. Mark Graban
    Twitter:
    says:

    Revisiting this article, I wish the Newton hospital hadn’t called their program “Show Me the Money!” or at least I would call a kaizen or ideas program that.

    You’re not going really inspire people with cost cutting or cost savings. Kaizen is often oriented around “Make Your Job Easier!” which reduces frustration, improves patient care, and ends up with bottom line savings to the hospital. But as the 3rd comment said, you can’t always (nor should you always) calculate ROI for each and every improvement.

  6. Sandra says:

    We submit ideas at the hospital where I work. It is a good idea, however, our boss is just interested in putting as many ideas as possible in the idea spreadsheet, and marking them as done, even if they aren’t done. I start thinking “what’s the point” if they just want to use it to show how much they are listening to their employees. It’s all about looks to them, not about the actual ideas.

    • Mark Graban
      Twitter:
      says:

      Sandra – I’m sorry to hear about the situation you are in. That’s really sad. You’re right, I would be asking “what’s the point?” if the managers just cared about appearances, not real engagement and real improvement.

      Mark

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