From The Lean Edge: Alternatives to Hospitals Spending, Building, and Hiring More


Today, I'm linking to a response I gave on‘s blog that features some really well known Lean authors (people I really have learned a lot from, so it's an honor to be included).

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 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:

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  1. Ron Pereira says

    Thanks for the link, Mark. I must confess… as much as I’d like to visit that Lean Edge site regularly (given the vast knowledge of the authors who write there) I find it to be the single most confusing website I have ever visited.

    I literally just spent 5 minutes trying to figure it out… is it a blog? A forum? Something in between? I’d like to think I am rather tech and website savvy considering I run two web based companies… but I honestly have no idea.

  2. PhysioWonk says

    The healthcare system I work for has been struggling to deal with ED wait times and with the exception of a few pilot projects has done little to improve throughput from the inpatient side of things… one of the big issues being a lack of long-term care beds availability to move medically stable patient out of the hospital.

    But my focus has always been on healthcare performance at the healthcare team level. To few managers are engaged in (and are getting their staff engaged in) process improvements. Very few managers would be able to answer the question “what have you been working on to improve the performance of your area?”.

    What has been accomplished in the current culture is to implement “overcapacity” beds… simply squeezing a stretcher bed between two existing beds with no change in staffing. Needless to say, we seem to be perpetually in an overcapacity state. Leadership readily admits that they are still reliant on a “push” approach to relieving ED pressure but are hopeful to turn the corner to a “pull” approach in the future. But being overcapacity has a detrimental effect on healthcare team performance… more delays in discharges, more delays in rehab, more adverse events, and dear to my heart, more unsatisfied staff and higher staff turnover, so I do not believe the benefits have outweighed the costs.

    I am optimistic though. Our system is part of the Health Care Value Leaders Network.. but it has been incredibly hard to move the culture away from it old reactive ways and I am still waiting for the moment when I can say we have turned the corner for the better.

    1. Mark Graban says

      Thanks for your comment. What you say highlights how systemic this problem is – it’s not even just a matter of “why can’t we get patients out of the ED?” but also “why can’t we get them out of the hospital when they’re ready?”

      The idea of adding more beds without additional staff greatly worries me. Being perpetually in an “unusual” situation can’t be good.

      I’m glad you are optimistic. A lot of people wouldn’t be, but being optimistic and hopeful is a choice we can all make.

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