Lean + Layoffs @ a Nebraska Hospital: But Not Related??

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Economy brings layoffs at Kearney hospital – Top Local Stories – News : KHAS-TV

Here is a story from Nebraska, local TV news again, about Lean at a hospital. If you visit the link above, you can also see a video with more information than the web text.

Unfortunately, the headline reads, “Economy brings layoffs at Kearney hospital.” This is happening at many hospitals throughout the U.S., as demand for surgery and other services drops as people lose health coverage or delay “elective” surgery to avoid paying out-of-pocket costs. We often say, in the Lean world, that you should not use Lean to drive layoffs — efficiency improvements from Lean (that come from staff involvement) will stop if those improvements lead to direct job loss. Hospitals should (and do) re-deploy employees to other departments or dedicate them to further Lean improvement efforts.

But when you have a drop in demand — that's a different scenario than job losses due to Lean improvements. A company like Toyota has the financial strength to keep employees on board during periods of down demand, but many (or most) hospitals do not.

Kearney's largest employer has laid off 32 employees. Good Samaritan Hospital blaming the economy for the job cuts. The CEO said this was a tough decision. The hospital said layoffs are just part of its plan. It is also looking at a number of other ways to try and save money.

In the details of the story, there is a quote from the hospital CEO, where he talks about Lean efforts:

“Like many others we have embraced the use of lean concept and we continue to look at ways that we can take non value added work out of the work that we do to improve efficiency and improve care we provide to our patients,” said Allen.

He has that right — taking NVA out can improve quality (care) and efficiency at the same time. It doesn't sound like they are using that improvement to drive the layoffs. It sounded like a few small departments were eliminated in their entirety.

Aside from the Healthy Living Center, the hospital will not name any other departments that have been eliminated. However, officials said many of them are non patient care support positions.

Maybe these departments, being “non patient care” were programs that weren't very effective or were a “luxury” that the hospital could no longer afford. Maybe these layoffs aren't as bad, from a Lean standpoint, than if there was, say, a 15% in laboratory personnel because of Lean efficiency improvements.

As with many things, particularly in this economy, there are no easy answers and I'm trying not to judge. Food for thought.

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Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. His latest book is Measures of Success: React Less, Lead Better, Improve More. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. He also published the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus.

1 Comment
  1. Deepak says

    Sir, the headline of the article seems very controversial. I don’t think Lean and Layoffs go together. But what can we expect in such gloomy times !! The Indian Manufacturing Industry is on its way to adopting Lean as well. These have been possible by seminars conducted by sir James P. Womack and other Lean evangelists. Hope this good sense prevails for the long run.

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