Healthcare Overview 
The current healthcare system must improve due to the enormous defect rate (estimated at nearly 45% by the New England Journal of Medicine, June 26, 2003), premium cost escalation, nursing shortages, etc. General Motor Corporation reported that healthcare expenditures equate to $1,525 per car. This cost is more than the steel to make the car! The insult to injury is that a significant portion of the costs related to healthcare services is waste. The national numbers for wastes in healthcare are between 30 and 40%.
The good news is that significant innovations are available to eliminate this waste and improve institutional function. This is achieved through the adaptation of the world-class processes that have been documented and used by the Toyota Motor Corporation (i.e., Lean), commonly referred to as Lean Healthcare. Lean Healthcare is the application of Lean practices to those healthcare processes that require improvement. Lean Healthcare is the application of 5S, value stream mapping, goals and outcomes, takt time, pitch, data collection, pitch, standard work, new office layout, leveling, continuous flow, Just-In-Time, mistake (or error)- proofing, plus the many other Lean tools as applied to the patient as well as non-patient processes within the healthcare system.
As Yogi Berra once said, "The future isn't what it used to be." In the twenty-first century healthcare facilities are struggling to make ends meet. Insurance and governmental programs have cut back on allocations to the healthcare community. Increased technology costs and the number of people with no healthcare coverage makes the struggle more challenging than ever. Meanwhile, people are concerned about escalating healthcare costs. The net effect is that healthcare facilities must find ways to conserve resources in order to keep costs contained and reduced to ensure patient health and safety. The way facilities can do this is through the application of Lean Healthcare or Six Sigma.
Lean Healthcare is centered on eliminating waste through continuous improvement while always keeping the patient (or customer) in mind. Waste is defined as non valued-added activities that the customer is unwilling to pay for. Non valued-added activities are the inefficiencies within the process. The service or product provided to the customer must be what the customer is willing to pay for (value-added). For example, when a patient had been seen by a doctor, had a X-ray taken, had blood drawn, etc., these are seen by the patient as value-added activities. However, the functions of patient charting, transporting a patient, billing, and coding, etc. may appear as non value-added but are necessary to ensure total patient satisfaction and safety. Therefore, as we discuss applying Lean Healthcare for eliminating waste (or non valued-activities), be careful to not refer to these as non valued-added activities. They are essential services required for patient safety and care. The ultimate customer is the patient, but internal customers can be other staff, departments, vendors, or other healthcare providers. Many hospitals, clinics, and labs across the United States and Canada have found Lean Healthcare to be one of their main solutions in meeting those challenges.
The Lean Healthcare team has over 20 years of the application of Lean Healthcare in hospitals, clinics, and other healthcare facilities. The Lean Healthcare team has been sanctioned by the Education for Lean Healthcare Institute (ELHI.org) in their competency for applying continuous improvement (i.e., Lean Healthcare) in hospitals, clinics, and other healthcare facilities. Some of the Lean Healthcare team’s results have included:
- Reduction in patient wait time for new patient exams by 26% (from an average of 38 minutes to less than 28 minutes)
- Inventory reduction in on POD (4 surgical rooms) of $1600 – full roll-out of system saved facility over $200K in disposables
- Orthopedic ER wait time decreased from 200 minutes as an average to less than 60 minutes, a decrease of 30%
The Lean Healthcare team includes:
Debra K. Hadfield, RN, BSN, MSN, CFPN worked in the clinical, hospital and educational fields applying Lean Healthcare principles for over ten years. Deb began her career as a nurse intern with Methodist Hospital of Indiana. She continued applying improvement initiatives in the healthcare field at St. John’s Hospital, Michigan State University, The University of Michigan, Andrews University, Michigan Capital Medical Center and Battle Creek Family Practice, to name a few. Her enthusiasm for improving patient care and processes is a breath of fresh air to the healthcare community.
Shelagh Holmes, RN, has 22 years nursing experience. Shelagh held a wide range of healthcare positions, some of which are: emergency room nurse, nurse manager, consolidation program manager, university instructor, labor coach and medical clinic manager. She utilized continuous improvement concepts in all her positions to improve patient care and improve the facilities bottom line. Her experience implementing best practices in the clinical and teaching fields allow for unique insights into improving processes in the healthcare industry.
Tom Fabrizio has been implementing Lean Systems for more than twenty years. His original Lean training was by leading experts in improvement technologies, including Dr. Shigeo Shingo (co-architect of the Toyota Production System), Dr. Ryuji Fukuda, and experts from Japan Institute of Plant Maintenance. After leaving Productivity in the mid-1990s, Tom co-founded the Healthcare Coalition, whose purpose it was to implement Lean in the medical industry, especially in hospitals and clinics. He later founded Lean Manufacturing Tools. Tom has extensive experience in applying Lean in emergency rooms, operating rooms, patient care facilities, administrative processes, and inventory control. Tom holds an engineering degree from Tufts University, a Masters Degree in Education from Northeastern University, and a Law Degree from England School of Law.
Don Tapping has worked over twenty-five years to eliminate waste and improve bottom-line results. Don authored the best selling book, Value Stream Management for the Lean Office (Productivity Press 2003), Who Hollered Fore?, and numerous other books on business performance - setting the bar for administrative Lean improvements. He continues to enlighten organizations with his ability to design step-by-step implementation methodologies identifying processes that require improvement, and then introducing proactive steps to improve or redesign them – reducing costs, boosting performance, and increasing customer (patient) satisfaction. Don has a B.A. from The University of Michigan and an MBA from The University of Notre Dame.
Many more examples have been documented and will be presented in the books, workshops, and videos through the publishing arm of the Education for Lean Healthcare Institute.