Hospitals Use Lean Principles to Achieve Efficiency Gains

Ann All

The health care industry is in an uproar over electronic medical records. There is widespread confusion over what will constitute "meaningful use" and other issues related to the introduction of electronic medical records and the distribution of federal stimulus funds to organizations that adopt them.


Many hospitals believe the government's expectations for implementation of electronic medical records are unrealistic. A recent survey shows that many practitioners are unhappy with their current clinical information systems. And perhaps most worrisome, a clinical research study raised some serious doubts about IT's ability to increase health care efficiencies and lower costs, the ostensible aim of electronic medical records.


Meanwhile, a growing number of hospitals are achieving efficiency gains and cost reductions using continuous performance improvement, a methodology widely practiced by automakers and other manufacturers. The basic premise behind CPI (often called lean) is to look for opportunities for continuous small improvements that will cut waste and improve customer experience. Employees and often customers are encouraged to contribute ideas. Standardizing processes is a key focus.


At Seattle Children's Hospital, the hospital's president says CPI helped it cut costs per patient by 3.7 percent, for a total savings of $23 million, And, he told the New York Times, the hospital avoided spending $180 million on capital projects over the last six years by using its facilities more efficiently. It served 38,000 patients in 2009, up from 27,000 in 2004, without expansion or adding beds. Stressing the "continuous" aspect of CPI, the administrator says the hospital has made more than 1,000 small changes over the past decade and "frankly it never ends."


A culture that cannot or will not become comfortable with change is a major stumbling block for CPI initiatives. George Labovitz, a management professor at Boston University, says CPI also may never work as well for hospitals as for manufacturing operations because of the relative complexity of health care. He says:


... even if you do everything "right," you can still have a bad outcome.


Still, hospitals using CPI have achieved some impressive improvements, some of which are detailed in the article:

  • At Akron Children's Hospital in Ohio, a $20,000 overhaul of the process used to sterilize instruments helped avoid a $3.5 million expansion of the surgery department.
  • Changes in the scheduling process in Akron Children's Hospital's MRI department cut the wait time for non-emergency MRIs by more than three weeks.
  • The average stay in the psychiatric inpatient unit at Seattle Children's Hospital has been cut from 20 days to 10 days, and the unit can now accommodate 650 children a year instead of 400.
  • By scheduling more surgeries on Fridays, when more beds were available for patients, Seattle Children's Hospital cut the wait time for many surgeries from three months to less than one.
  • Doctors at Seattle Children's Hospital worked together to standardize instrument carts for appendectomies, to reduce instrument preparation errors and inventory costs.
  • Seattle Children's Hospital staff worked with a printing company to reduce paperwork required for tonsillectomies, cutting the number of forms filled out from 21 to 11.
  • Seattle Children's Hospital staff offered suggestions to modify design plans for a new $70 million clinic and surgical facility, eliminating 30,000 square feet and $20 million in cost from the original plans.


Some folks believe lean or CPI principles can also be used to improve IT processes. IT Business Edge contributor Loraine Lawson recently interviewed David Lyle and John G. Schmidt, authors of "Lean Integration: An Integration Factory Approach to Business Agility." The two men compiled case studies and found applying lean practices to integration projects yielded big improvements.


Schmidt told Loraine a waste-elimination mind set and commitment to CPI principles typically results in a 90 percent cycle-time reduction (the time it takes from request to delivery) and a 50 percent increase in productivity.

Add Comment      Leave a comment on this blog post
Jul 14, 2010 11:59 AM Lisa Dreher Lisa Dreher  says:

Hi Ann,

Thanks for the article; we are seeing many hospitals face the same issues.  I thought you and your readers might be interested in this case study with Montgomery General Hospital in Olney, MD. We re-wrote the meaning of the word "support" when we teamed up with the hospital to develop a new data center environment to serve the hospital's ever increasing computing needs.



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