Do you remember the old UPS tagline, "What can brown do for you?" The ads were focused on how UPS could help streamline business operations, make companies more efficient, take waste out of the system and, ultimately, lead to greater customer satisfaction.
Does that sound like a familiar refrain? Facing unprecedented cost pressures, executives at hospitals and health systems nationwide find themselves in the unenviable position of having to drastically alter operations and rein in costs. You are all too familiar with the motivating forces: declining reimbursements from government and private payers; a business model that's evolving from one based on volume to one based on value and quality; the continued need to make large capital outlays not only to ensure that patients get state-of-the-art care, but to keep up with regulatory mandates (do the words meaningful use or ICD-10 ring any bells?); and more.
Cost containment cuts across every part of the hospital — clinical efficiency, the supply chain, IT, staffing, energy, design and construction, and the list goes on. Given the magnitude of the issue, H&HN this month launched a yearlong series delving into the challenges facing hospital leaders. More importantly, we'll be looking at viable solutions and best practices that hospitals big and small can implement. Our October cover story lays the groundwork for the project, which is made possible by the support of VHA. In subsequent months, we will drill down to specific areas such as the pharmacy, the supply chain, staffing, energy and IT. A multimedia campaign in H&HN Daily will complement that coverage. Starting in December, we'll launch a podcast series that presents a case study of a hospital (or hospitals) doing extraordinary work in each of those areas. And, on the third Thursday of every month, an H&HN Daily blog will look horizontally across a hospital or health system to see how it has approached cost containment.
One of the questions we're asking in these blogs is: "What can Lean do for you?" (Of course, we'll also look at Six Sigma and other performance improvement strategies.) For a growing number of hospitals, Lean is proving an invaluable tool in the battle against inefficiency. Since 2006, for instance, Denver Health has saved more than $87 million thanks to Lean activities. The hospital did so, by the way, adding four new buildings to its campus. Other health systems, including ThedaCare, Avera McKennan and Virginia Mason have also applied Lean with tremendous success. At Miami Children's Hospital, Lean helped the patient access services department avoid $415,000 in costs in just one cost reporting center. Lean also led to increased volume in radiology and dramatically reduced the time it takes to discharge patients.
It's important to note that cost containment is not the primary focus of Lean, says Mark Graban, president of Constancy Inc., a Keller, Texas. Graban is an author and expert on applying Lean. He wrote a great column on how hospitals can deploy Lean in the August 9 edition of H&HN Daily.
"Cost reductions are the end result to improvements in quality and patient flow and reducing waste from the process. Lean is not about cost cutting," he told me recently. "To properly engage people in performance improvement, cost reduction can't be the primary driver. People working in hospitals are more prone to talking about improving quality and improving care. That's what gets people excited."
In hospitals where Lean has been the most successful, Graban says, it has been engrained in the culture. That comes through in the video from Miami Children's Hospital, where it is said that staff now automatically want to do value stream mapping to solve a problem.
In future blogs, myself, Haydn Bush and Bill Santamour will explore in detail how some hospitals are using concepts like Lean or Six Sigma to become more efficient, improve operations and, ultimately, reduce costs.
If you have a success story to tell, we'd like to hear from you. Email me at firstname.lastname@example.org.