How Using Lean Principles Can Reduce Costs In The Healthcare Industry.
There has been lots of talk over the years about the benefits of implementing principles from the Toyota Production System into a business system.
However, the healthcare industry is now implementing the same lean principles developed in the manufacturing sector. As a result of using lean principles they are improving the delivery of services to patients.
Why is it so important to use lean healthcare principles?
Itâ€™s important because anyone purchasing a health insurance plan is paying more than at any previous time. These premiums are climbing much faster than personal incomes The United States is paying out more money per capita on healthcare than any of the other OECD developed countries. Almost all OECD countries have seen an increase in their healthcare spending as a percentage of their gross domestic product (GDP). According to data compiled by the Organization of Economic Cooperation and Development (OECD) the USA share of GDP devoted to healthcare grew from 8.8% of GDP in 1980 to 15.2% of GDP in 2003.
The Congressional Budget Office (CBO) put the percentage of GDP on health care at about 16% in 2009 which converts into hard cash of about $1.3 trillion compared to around $75 billion in 1971. The Congressional Budget Office has estimated this percentage will almost double to 31% of GDP over the next 25 years in the United States. This increase will have a serious impact on the economy in the United States because health care spending will continue to increase at a faster rate than incomes. In 2009 US consumers were spending an average of $7,290 per person compared to $2,964 per person in all other OECD countries. This data demonstrates the disparity between higher costs versus the quality of healthcare in the United States compared to what other OECD countries are paying for what appears to be a better quality of service. What can be done to help reduce the impact of this problem?
Teaching lean healthcare principles:
Teaching healthcare workers to understand the application of lean principles and how they can be used to discover and remove waste is the first step. Getting them to make the connection between waste and increasing costs is very important. Everyone needs to understand that the removal of non-value added activities (waste) will improve patient satisfaction, while reducing costs and increase profits.
About value stream mapping in lean healthcare:
The second step is to train a team about Value Stream Mapping so they can define and understand where there are constraints in their healthcare facility. Training in how to use VSM will get everyone to focus on the same things and allow them to develop the common language of lean healthcareÂ practices.
The third step is to teach every worker in a healthcare facility to become a problem solver. Understanding and applying the 8 step problem solving model from the A3 process using PDCA (Plan, Do, Check, Act) or PDSA (Plan, Do, Study, Act) helps them to discover and remove the root causes of problems.
Implementing these three easy steps can launch any healthcare organization on the path to continuous process improvement by reducing costs, while improving the level of client or patient care.