Demand for health care services is driven by demographics and advances in medical care and technology. The profitability of individual companies depends on efficient operations and, in the case of many nonprofit health care providers, obtaining grants and government funds. Large companies have advantages in accessing the latest medical research, buying supplies, offering a wide range of services, and negotiating contracts with health insurers. Small institutions can compete successfully by serving a limited geographical area, offering specialized services, or building a local reputation for quality care. The sector is highly fragmented: the top 50 organizations generate roughly 15 percent of revenue.
Compared to other industries, health care has been slower in identifying who the customer really is. Because of the complexity of the health care system, internal customers — physicians, hospitals, insurers, government, and payers — have often driven processes. It is critically important that value be defined from the point of view of the primary customer: the patient.
Health care also faces the same sorts of challenges that manufacturing companies closer to where Lean comes from face. Instead of lower availability of machines due to downtime and changeover times, hospitals face uncoordinated schedules and breaks between medical departments and long changeover times of OR (operating room) as an example. While production facilities face challenges in the logistics of raw materials and lack of production flow in their processes, hospitals have waste in their central pharmacy logistics for distributing medicine throughout the different wards, and patients and physicians alike suffer from below optimum layouts and process flows in the walk-in clinics and OR.
Lean always starts with first understanding value as defined from the customers i.e. primarily the patients, both out- and admitted patients, and then the physicians, hospitals, insurers, governments and payers. Looking at health care from the customer perspective results in the identification of certain processes and areas that create and contain waste and where the application of Lean can significantly impact the process by reducing such waste and increase the value add to all customers involved.
Applying Lean health care eliminates wasted time and resources, increasing the efficiency of the process of admitting and treating patients, thereby allowing more patients to be treated using the same resources. This allows medical service providers to leverage existing assets, and generate higher margins. The benefits of Lean health care are significant, and go well beyond financial rewards.
Lean health care can be applied in many areas, such as:
|Reduction of average outpatient waiting time throughout entire clinic visit by 38%|
|Improvement in bed management by reducing the retention time of uncomplicated cases by 31%|
|OR changing/prep time reduction by 30%|
|Complaint reduction on doctor documentation from referring physicians and clinics by 50%|
|Increase of admitted patients’ satisfaction with doctor rounds by 18%|
|Staff’s time tied to rework reduced by 75% due to implementation of Lean central bed management process|
|Increasing OR utilization by 25% due to reduction of OR changing/prep time|
|Increase in physicians’ capacity to handle 12% more outpatients by freeing their time from wasteful activities|
To learn more about Lean health care solutions, contact Four Principles today.