Lean Techniques Yield Huge Benefits in Healthcare

Posted by on Dec 24, 2012 in Lean, Lean Six Sigma, Process Improvement | 0 comments

In recent years healthcare has been under enormous pressure to reduce cost and improve customer satisfaction.  Hospitals getting squeezed on all sides and seeing rising costs are having to improve everything they do or risk going out of business.  Hospitals have looked at what manufacturing has done to reduce cost and many have started to implement Lean Six Sigma as a way to analyze and improve their processes.

This has caused them to look differently at how their processes flow.  Traditionally, hospitals were organized into functional departments based on equipment type, type of work done, or what treatment was given.  No consideration was given to the patient and continuous flow of any kind.

Eliminating waste and establishing a smooth flow for every patient from arrival to departure has the highest return for a hospital.  One example of a kaizen event conducted in a hospital dealt with “bed turnover” and how to increase the utilization of the hospital’s fixed number of beds.  A goal was set to improve bed turnover by 25%.  Calculations done during the kaizen estimated this improvement would generate an extra $60 million in operating income for this $500 million hospital.

In his recent book, “The Lean Turnaround,” lean expert Art Byrne cited some Kaizen projects conducted in other hospitals that yielded the following results:

  • Nurses increased their time spent with patients for 35% to 90%.
  • Time to report lab test results to patients dropped 85%.
  • Cost of supplies dropped $1 million per year.
  • Professional liability costs went down 48.9%.
  • Accounts receivable outstanding greater than 90 days decreased 74%.
  • Kaizens in a spline clinic resulted in 78% reduction in space, 29% reduction in headcount, and 56% increase in margin.
  • Kaizens in a surgery center resulted in case time down 39%, case turnover down 50%, and cases per day per OR increased 60%.
  • Pharmacy medication distribution order to availability down 93%
  • ER time from in bed to physician greet went from 12 min to 6 min, down 50%.
  • ER average length of stay went from 250 min to 179 min, down 30%.
  • Kaizens in anesthesia department resulted in non-value-added time decreased by 50%, walking distance reduced 69%, and overall cycle time reduced 43%.

These are great results and illustrate the huge savings that can be gained by using simple lean techniques such as takt time, one-piece flow, standard work, and pull.  As one hospital president said, “Everything we do, we can do better and faster, and without adding resources, because we use Lean tools to drive out waste.  We continue to learn how to improve and can leverage our operational excellence into growth.”

Any organization can get these same benefits if they understand how to eliminate waste and improve flow in their processes.

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