Why are members of the healthcare industry applying a business approach that got its start in manufacturing? According to the Centers for Medicare and Medicaid Services, national health spending is projected to grow at an average rate of 5.5 percent per year for 2017-26 and to reach $5.7 trillion by 2026. That rate of growth is simply unsustainable under existing conditions. A widespread shift in thinking and a sharp focus on customer value is necessary to keep the already overtaxed system from collapsing under increasing weight.
One change in thinking that is already becoming evident is the focus on growing more customer-centric and developing solutions that increase customer satisfaction while maintaining profitability. That’s where Lean’s focus on eliminating waste comes in. The central question, “Does this provide value for the customer,” is asked by every member of the organization, ensuring organizational alignment and consistent decision making.
Healthcare organizations don’t simply become “Lean” overnight. They achieve significant waste reduction by implementing a series of incremental improvements. Each person contributes their ideas for eliminating waste and teams work on a continual basis to apply them. This often takes the form of an improvement cycle called DMAIC (Define – Measure – Analyze – Improve – Control). Once the DMAIC cycle is complete, and improvement is achieved, it begins again to strive for even better results.
The person credited with originating the Lean management system is Taiichi Ohno of Toyota. He initially identified seven wastes that occur in any industry. The eight waste, human potential, was later added to the mix. Although Ohno’s focus was manufacturing, the eight wastes apply perfectly in healthcare.
Excess Inventory
Medical supplies are essential in a healthcare environment, but too much of a good thing means capital that can’t be spent on other items and storage related expenses. Some healthcare supplies are perishable, so excess inventory can lead to the disposal of things that were never used. In healthcare, excess inventory might be supplies, pre-printed forms, unneeded equipment, medications, or even superfluous data. In a Lean organization, employees recognize too much stock and try to find innovative ways to eliminate it.
Defects (Mistakes)
Defects are bad in manufacturing. They can be deadly in healthcare. “Defects” in health care run the gamut of medical mistakes, misdiagnosis, process, or systems failures. Examples include preventable hospital-acquired conditions like blood clots and infections, avoidable re-admissions, incorrect or incomplete medical records, medication errors, billing mistakes, and surgical errors. The shift toward pay for performance models in healthcare will drive organizations to do whatever is necessary to create the conditions that make mistakes less likely and to take decisive action when they occur.
Waiting
Whenever you see patients or workers sitting idle, you are witnessing the waste of waiting. If you’ve been in a healthcare setting, you’ve almost certainly experienced it firsthand. Not only is waiting economically wasteful, but it is also damaging to customer satisfaction as well. This waste doesn’t just apply to patients sitting in waiting rooms, it all applies to idle diagnostic equipment, and employees waiting for another person to finish a task before they can complete a process.
Transportation
The waste of transportation occurs whenever supplies, equipment, or people are moved unnecessarily. For example, a piece of diagnostic equipment might be brought to a room where it is not needed, or patients may be placed in a staging area under overcrowding conditions and then moved to a different location for their exam. Unnecessary transportation increases the risk of injury to patients or equipment, and it often leads to the waste of waiting. By focusing on value creation, Lean thinkers can recognize and reduce the waste of transportation.
Motion
The waste of motion happens when employees in healthcare organizations perform movements that do not add value to patients. This is often the result of inefficiently designed workspaces or understocked supplies. If a clinician needs to leave the exam room to get a necessary supply, the waste of motion has occurred. If commonly used items are stacked in inconvenient locations within workspaces, either clinical or administrative ones, the process is not providing full value.
Overproduction
Overproduction in manufacturing happens when more of a product is created than the market will consume. In healthcare, overproduction involves hospital stays that last longer than necessary, duplicating tests or exams, preparing meals for patients who have already been discharged, or other redundant activities.
Over-Processing
The Lean waste of over-processing happens in healthcare when effort is expended that does not improve the patient’s outcome. Unnecessary medical tests are probably the first thing that jumps to mind, but other examples include collecting the same data on multiple forms or entering data into health management systems that aren’t integrated with one another.
Human Potential
As I mentioned, the waste of human potential is the most recent addition to the wastes of Lean, but it is a critical one, especially in a healthcare setting. It occurs when individuals are not contributing to their full capacity either because they aren’t empowered to do so, or because they are performing another task that could be done by someone with less skill or experience. Lean thinkers realize that people are the most crucial resource in healthcare and that their value should be maximized.
Lean healthcare isn’t a fad. It has proven to be effective at reducing costs, improving patient outcomes, and achieving high customer satisfaction levels. Employees love it as well because they are given the opportunity to contribute to the success of the organization and given the structure to do their best work.