The question they posed (which is hard if not impossible to figure out, due to the design of the site) is this:
“What is the lean approach to capital expenditure? As Toyota announces a new plant in high-cost Japan, it also claims that the overall investment is 40% lower than an existing equivalent size plant. How is this possible? What is the impact of lean on the investment cycle?”
My response, in terms of healthcare, begins with:
The traditional approach to increasing capacity (beds and equipment) in healthcare is “more, more, more.” More space, more money, more people. This is one reason for our rapidly increasing healthcare costs. Hospitals don’t always do a good job of maximizing the use of existing resources – they often just build more space instead of improving flow, reducing variation, and reducing hospital length of stay.
I remember meeting a Chief Medical Officer at a hospital in Puerto Rico. They had long patient delays in the emergency department and the CMO, through her political power, forced through the construction of 9 more E.D. bays for patients. Afterward, she realized (and was honest enough to admit) that the construction did nothing to improve patient flow. What they needed was to improve flow through the entire end-to-end patient value stream, including inpatient admission and discharge. Patients were delayed in the E.D. because inpatient beds were not available and inpatient beds were clogged up because the discharge process was slow, batchy, and ineffective, causing unnecessary delays. Adding more E.D. bays did nothing to solve the real problem in the system. This same mistake (just building more space) is a mistake that has been made in many facilities around the world.
Many hospitals are directly using Lean improvement methods to reduce or even cancel capital spending and construction projects and they are using the “3P” methodology (the Production Preparation Process) to build the right-sized space if they do construction. These leading hospitals are practicing the Toyota mantra of “creativity over capital.”
I worked with one hospital that used Lean to improve MRI utilization from 40% to 70%, dramatically reducing outpatient waiting times from 12 weeks to just two weeks. Simple process improvements, driven by the staff, clinicians, and department leaders, were far more effective than the multi-million dollar expense of buying another MRI would have been (an option) that wasn’t even on the table). I’ve worked with many hospital labs that were able to cast aside the old notion that they needed new, larger space as they instead used Lean methods to redesign their existing space to improve flow and productivity (meaning faster test results and lower labor cost) – freeing up 20% of their space instead of needing 20% more, as they had thought. More space and more equipment is not always the answer. First use what you have.
You can read the rest of my post via this link - and then please come back here if you want comment. The lack of a commenting feature is something else that you might want to give TheLeanEdge.org feedback about (if you can figure out how on the site). They have great contributors, but I think the website design is very lacking – and they haven’t, frankly, listened to my suggestions about that. Go figure.
Other responses on this topic:
About LeanBlog.org: Mark Graban is a consultant, author, and speaker in the “lean healthcare” methodology. Mark is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as the new Executive Guide to Healthcare Kaizen. Mark is also the VP of Innovation and Improvement Services for KaiNexus.