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Mark Graban

Mark Graban: The lean approach to capital expenditure, inspired by Toyota’s philosophy and practices, is also thankfully being applied in healthcare

By Mark Graban, - Last updated: Friday, March 11, 2011 - Save & Share - Leave a comment

The traditional approach to increasing capacity (beds and equipment) in healthcare is “more, more, more.” More space, more money, more people. This is one reason for our rapidly increasing healthcare costs. Hospitals don’t always do a good job of maximizing the use of existing resources – they often just build more space instead of improving flow, reducing variation, and reducing hospital length of stay.

I remember meeting a Chief Medical Officer at a hospital in Puerto Rico. They had long patient delays in the emergency department and the CMO, through her political power, forced through the construction of 9 more E.D. bays for patients. Afterward, she realized (and was honest enough to admit) that the construction did nothing to improve patient flow. What they needed was to improve flow through the entire end-to-end patient value stream, including inpatient admission and discharge. Patients were delayed in the E.D. because inpatient beds were not available and inpatient beds were clogged up because the discharge process was slow, batchy, and ineffective, causing unnecessary delays. Adding more E.D. bays did nothing to solve the real problem in the system. This same mistake (just building more space) is a mistake that has been made in many facilities around the world.

Many hospitals are directly using Lean improvement methods to reduce or even cancel capital spending and construction projects and they are using the “3P” methodology (the Production Preparation Process) to build the right-sized space if they do construction. These leading hospitals are practicing the Toyota mantra of “creativity over capital.”

I worked with one hospital that used Lean to improve MRI utilization from 40% to 70%, dramatically reducing outpatient waiting times from 12 weeks to just two weeks. Simple process improvements, driven by the staff, clinicians, and department leaders, were far more effective than the multi-million dollar expense of buying another MRI would have been (an option) that wasn’t even on the table). I’ve worked with many hospital labs that were able to cast aside the old notion that they needed new, larger space as they instead used Lean methods to redesign their existing space to improve flow and productivity (meaning faster test results and lower labor cost) – freeing up 20% of their space instead of needing 20% more, as they had thought. More space and more equipment is not always the answer. First use what you have.

A physician I know at a major university medical center is currently lobbying his board to cancel the construction of a new patient tower that would represent hundreds of new beds. Why won’t they need these beds? Because they are doing such great work to reduce hospital-acquired infections, using Lean methods, that the average patient’s length of stay is much shorter (an infection might add 15 days of additional hospital time). With shorter length of stay, that frees up beds and creates essentially free beds – far more cost effective than building another tower.

Hospitals like ThedaCare, Seattle Children’s, and Park Nicollet are using Lean and 3P methodology to reduce construction costs and to build more smartly when they do build. ThedaCare chose to build a new tower based on their “collaborative care” process and model of care, because the ongoing efficiency and patient outcome benefits far exceeded construction cost and allowed possibilities for team medicine that were tough in the existing space. Seattle Children’s claims that they have avoided well over $100 million in construction costs thanks to Lean. Delnor Hospital in Illinois avoided $80 million. Park Nicollet built a new outpatient cancer treatment center that is patient-focused to the extreme. Instead of making sick patients walk hundreds of yards between disparate locations (wasting precious energy), all of the care (short of radiation) comes to the patient. Doctors come to the patient. Chemotherapy comes to the patient. Examples like this show that Lean construction is not just cheaper and smaller – it serves the patient better. We can all hope this becomes a growing trend in healthcare, not just isolated cases.

How is this possible?

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