Center for Business, Industry & Labor

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On Target • On Demand • On Site

Lean Work Processes and the Healthcare Crisis

Tens of thousands of organizations worldwide are using the philosophy and tools of Lean Manufacturing to drive fundamental changes in the way they operate. Built upon three basic beliefs about the nature of work and workers, Lean work processes are having a remarkable impact on productivity, product quality, and profitability. The basic beliefs that undergird Lean and are the foundation upon which its success is built are that:

• All work processes are imperfect

• Driving work processes toward perfection must be done by tapping the creativity and knowledge of the individuals who do the work.

• The primary job responsibility of all levels of leadership, from front line supervisors to CEOs, is to serve as catalysts, triggering the creativity of their direct reports and focusing the organization on the relentless pursuit of perfection.

Just as these beliefs, coupled with the tools of Lean Manufacturing such as 5S, Continuous Flow, Value Stream Mapping, Standardized Work, Work Process Checklists, Just-in-Time, and others have driven remarkable increases in the productivity of manufacturers, they are also having a very positive impact on healthcare costs as well the quality of healthcare services. As reported by the healthcare industry worldwide, here are examples of the impact of Lean thinking coupled with Lean analytical tools on two critical healthcare issues—preventable infection rates in hospitals and healthcare costs.

• Problem: Preventable infections acquired in hospitals cost $4.5 billion per year and contribute to more than 88,000 deaths—one death every six minutes in the U.S.

• Impact of Lean:

  • Reduced patient deaths related to blood stream infections by 95%

• Problem: The cost of healthcare in the United States has been rising at an astronomical rate. US healthcare spending accounts for roughly 16.2% of the nation’s Gross Domestic Product (GDP); this is among the highest of all industrialized countries. U.S. healthcare spending is expected to reach $4.3 TRILLION in 2017, or 20% of GDP.

• Impact of Lean:

  • As reported by Wellmark Blue Cross Blue Shield, Des Moines, the application of Lean work processes drove “documented, hard-dollar savings of $3.7 million” in one year by finding and identifying non-value-added processes and waste. It also helped Wellmark recoup over $1.7 million in overpayment to physicians and capture over $280,000 in administrative savings.

  • Various hospitals have reported productivity gains, each of which impact cost, such as:

     Cost of meals reduced per tray from $1.37 to $1.15.

     Saved 133 miles of walking per nurse per year.

     Stock levels in Pathology Department reduced by 60%.

     Reduced turnaround time for clinical laboratory results by 60% without adding head count or new instrumentation.

     Reduced patient waiting time for orthopedic surgery from 14 weeks to 31 hours from first call to surgery.

     Increased surgical revenue by $808,000 annually.

  • Medication errors alone are estimated to account for over 7,000 deaths annually. This is estimated to add $35 billion to the total cost of healthcare.

     Improved getting medications to patients on time from 90% to 99% of the time.

     Reduced medication errors due to Banding mistakes from 7 mistakes one year to 1 the next.

     Decreased the total medication error rate from 0.33% to 0.14% in five months.

To use an old, somewhat hackneyed phrase, achieving these types of improvements “is not rocket science.” What it takes is a leadership team that understands that Lean is all about changing what employees believe and how they think as much as it is about the tools of Lean. It also takes managers and first-level supervisors with an understanding of Lean processes and who also have the supervisory skills needed to drive the implementation of Lean processes.

The ultimate goal: As I said at the beginning, to create a work environment in which all employees fully utilize their knowledge and creativity in the energetic pursuit of perfection.

St. Louis Community College’s Center for Business, Industry & Labor has resources that can provide very high quality support of a healthcare facility’s transition to Lean. I’d like to meet with you to review the ways in which these resources could serve you. Call me, George Friesen, at 314.303.0612 and let’s schedule a meeting.