Customer Experience and Design

Creating a Lean Mean Healthcare Machine: Part 1

This blog will be the first in my Lean Healthcare series. In this first blog, we will keep it short and sweet. I will provide you with the basic premise of the lean methodology, present the goals of lean, provide you with the 5 basic principles and explain why lean applies to healthcare and a glimpse into some of the benefits this process can bring .

Long waiting lists, hard-to-access care, overcrowded waiting rooms, staff shortages, high costs, low productivity, stressed-out employees, and medical mistakes1. Sound all too familiar? Sure it does…this is our healthcare environment. It is no big surprise that it is these sorts of inefficiencies and redundancies within our healthcare system that are driving up cost, effecting patient safety and impeding quality care. Enough is enough! The time has come to introduce a new way of thinking to help achieve better healthcare outcomes; the time has come for Lean Healthcare.

What is Lean?

The Lean Methodology is derived from the Toyota Production System (TPS), with the basic premise being to keep production continuously flowing; anything that interferes with the flow is considered waste2. It is designed to improve profitability, customer* satisfaction, throughput time and employee morale by eliminating such things as defects, overproduction, waiting, excess inventory, over processing and underutilization2. In a nutshell, it tries to achieve high value with less work and for the healthcare industry this is a gift from above!

Goals of Lean:

According to Manufacturing-Works3, There are four basic goals of a lean organization:

  1. Improve Quality. Quality can be defined as the ability for your products or services to meet your customer’s requirements. This goal begins with understanding your customer’s expectations, so that you can design processes that will meet these expectations.
  2. Eliminate Waste. Waste is any activity that does not add value to the product or service*. The activity does not add value if the customer is not willing to pay more money for this activity.
  3. Reduce Lead Time. By reducing the lead time in all areas involved in meeting the customer expectation (including the gathering of information), a lean enterprise can more quickly respond to the customer.
  4. Reduce Total Costs. Total costs are defined as the total direct and indirect costs associated with the production of a product or service. To reduce its total costs, a lean enterprise must eliminate waste and reduce lead times.

Basic Lean Principles:

To achieve the aforementioned goal, there are 5 basic Lean principles. The Lean Enterprise4 Institute describes them as follows:

  1. Specify value from the standpoint of the end customer by product family.
  2. Identify all the steps in the value stream for each product family, eliminating whenever possible those steps that do not create value.
  3. Make the value-creating steps occur in tight sequence so the product will flow smoothly toward the customer.
  4. As flow is introduced, let customers pull value from the next upstream activity.
  5. As value is specified, value streams are identified, wasted steps are removed, and flow and pull are introduced, begin the process again and continue it until a state of perfection is reached in which perfect value is created with no waste.

Does Lean Apply to Healthcare?

For years, many clinicians and hospital administrators were skeptical on how a principle, originally developed for the manufacturing world and proven indisputably beneficial in the automobile industry, can impact the healthcare. But how different are these industries really? Donna Daniel provides an excellent comparison. She acknowledges that “practitioners aren’t factory workers and patients aren’t widgets” and goes on to explain that “both manufacturing and health care have a work flow — a succession of steps and an established process — that requires interaction with humans. As different as they are, both industries require this interaction to produce an output or outcome; it could be an automobile or a healthier patient5.”

More and more, the healthcare industry is beginning to see the similarities and understand the value in adopting lean thinking. One of the early adopters, Virginia Mason Medical Center in Seattle, a 350-bed hospital, reaped Lean benefits immediately after its 2002 implementation. They saved $6 million in planned capital investment, freed 13,000 square feet of space, cut inventory costs by over $350,000, reduced staff travel time around the hospital, and decreased infection rates, as well as greatly improved patient satisfaction6.

The Lean process eliminates waste by taking out unnecessary processes and redirecting human effort toward value-added business operations and in doing so, reduces production time, decreases costs and improves customer satisfaction5. Doesn’t this sound exactly like what healthcare needs?

*For the purpose of the healthcare industry, “customer” is the patient and “product or service” is the delivery of care:

Stay tuned for my next blog in which I will dive into details of the 5 key principle of the Lean Methodology.

References for this blog post:

  1. http://www.mcgill.ca/conted/prodep/lean/healthcare/
  2. http://www.hhnmag.com/hhnmag_app/jsp/articledisplay.jsp?dcrpath=HHNMAG/PubsNewsArticle/data/2006October/0610HHN_FEA_QualityUpdate&domain=HHNMAG
  3. http://manufacturing-works.com/lean/lean_enterprise.php
  4. http://www.lean.org/WhatsLean/Principles.cfm
  5. http://www.bizjournals.com/seattle/stories/2005/10/31/focus11.html?page=all
  6. http://www.ihconline.org/aspx/general/page.aspx?pid=11

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Priyal Patel

Priyal Patel is a healthcare industry expert, strategist and senior solutions architect for Perficient. With more than 10 years of healthcare industry experience, Priyal is a trusted advisor to C-level executives, senior managers and team members across clinical, business, and technology functions. Priyal has a proven track record of helping providers and health plans execute enterprise-level transformation to drive business, clinical, financial and operational efficiencies and outcomes.

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