Lean Thinking in Healthcare

Use these comments on Lean Management in Your Term Paper/ Final Paper

I found the topic of lean management to be really fascinating, and think that there are many areas where this sort of efficiency thinking could be put to work.

I think that while we sing the praises of the TPS it is important to remember the Toyota recall problem that occurred in 2009-2010. Ultimately, the NTHSA found that Toyota didn’t have a manufacturing issue with their electronic throttles, but rather Toyota had a problem with lack of transparency and admitting there was a problem with their floor mats and steering columns (You can read press release here http://www.nhtsa.gov/PR/DOT-216-10) While lean thinking and the TPS may produce manufacturing efficiencies, when we are pursuing quality we may sometimes miss the mark, and organizations need to be able to admit when they have failed.

I found that the application of lean thinking in the emergency department to be especially valuable. Patients that are already admitted to the hospital may be less focused on getting out, so trying to speed up the inpatient process may be more challenging. However, patients coming to the ER (in most cases) just want to be treated and released. I found a really interesting video about lean in Great Britain  http://www.youtube.com/watch?v=tOuIrRPI9Xw where they completely re-designed their flow by having the 85% of people that will probably be released see only the receptionist and a nurse practitioner. The receptionist acted as both patient greeter and patient registrar, and the nurse practitioner replaced the triage nurse, the nurse aid that comes out to take you back to the bed and re-check your vital signs, the RN that performs the nursing assessment, and the physician that performs the physical exam and orders tests. The nurse practitioner is able to fill all of those roles, and by having the patient only interact with the NP, wait time and time spent rehearsing the history of present illness to multiple parties is reduced. Only the patients that the NP believes need admission are seen by the ER attending, and the ER attending is primarily responsible for seeing myocardial infarctions and traumas (whose treatment needs are beyond the scope of practice of the NP). An issue that management would have to consider is whether the efficiencies created counterbalance the higher salary they will pay the NP to do some work for which the NP is overqualified

There are many challenges to implementing lean management in an organization. In the aforementioned example, what happened to the jobs of all of the registrars, unit clerks, nurse aids, EKG techs, phlebotomists, and RNs that previously took care of the ER patients?  How do you have a “No Layoff Policy” while reengineering processes and positions? Another challenge that leaders face is resistance to change and negative employee attitudes. Leadership may have previously used some sort of quality or productivity tool and employees may initially see lean as a fad that leadership will eventually outgrow and hence not see the need to realign attitudes and behaviors around lean thinking.  Resistance to change is deeply ingrained in many professionals working in the healthcare field and leadership has to work hard to create buy-in and overcome the “that’s how we did it when I was in medical/nursing school” mentality.

One of the main arguments in favor of lean is that the American healthcare system is full of waste. As a society, we need to re-engineer our medical system because we cannot afford to maintain our status quo. This actually takes the idea of resistance to change to the higher level of society. Is our system wasteful only because we rely on expensive imaging technologies? Or is it also wasteful because our patient’s health literacy and ability to self-manage is insufficient? Or is it wasteful because of concern over medical malpractice causes duplicity in testing? As a people, Americans need to be willing to “trim the fat” that exists in our system; lean thinking can help health systems do this by systematically examining the root causes of problems and engineering long term solutions to solve systemic problems. 

Performance Management- Baldrige Award Winners and the Balanced Scorecard Approach

The positive aspect of the Balanced Scorecard approach is that it looks past simple financial results to the overall big picture of what is going on in the organization overall. This is especially important in businesses that are publically traded since there is a perverse incentive to take actions that “improve performance” on financial statements in the short run but in the long run jeopardize the competitive advantage and growth of the company. An example of this would be a government contracting services firm that dumps employees to reduce their immediate short term cash obligation to pay salaries, but later finds itself unable to bid competitively on new service contracts because they lack the people with skill sets to fulfill the contracts. Under the balanced scorecard, leadership should consider the customers perspective, the financial perspective, the internal business perspective, and the innovation and learning perspective.

The customer’s perspective has to do with how the external public (customer) views the company. An example would be how people view their iPad in comparison to how people view their Dell Streak. If you are Apple, your relationship with iPad users is going well; if you are Dell, your relationship with Streak owners is pretty dispassionate. The status of the relationship with the customer is essential when considering the future of a business. Just as the current status of a marriage relationship can tell us about the future of that marriage relationship, the current status of the company’s relationship with their customer base can be useful in predicting the probable future status.

However, current reality is not 100% predictive of future reality. This is why it is important for companies to consider innovation and learning perspective. Just as people grow and change over time, products and services demanded by the market grow and change over time. To know if the relationship with the customer will last over time, companies must proactively seek out new knowledge and trends. In terms of competitive advantage, companies should strive to be a market leader instead of a market follower in order to achieve maximum financial results. An example of this is Apple. People didn’t know they needed the iPhone until after Apple shared this information with them. All the other companies that produced similar products after Apple could only compete on price, since their product was not considered innovative by the market.

Financial reality is still important, however. Only through adequate cash flow and profitability can the business continue to exist and respond to its internal and external publics. The internal business perspective is critical in evaluating overall business performance. A company such as Starbucks is selling a product, but it could also be argued that they are also selling an experience. Part of that experience is the customer’s interaction with the staff. If companies are not adequately investing in their employees through wages, benefits, training, and the creation of a positive work environment, it is probable that employees will become resentful over time and seek out alternant employment options. For a services or knowledge based company, it is ESSENTIAL that the internal perspective of employee relationship management is prioritized. If the company is more a manufacturing type of firm, the internal business perspective may emphasize productivity or manufacturing excellence.

Since the creation of the managed score card requires data, and data must be generated and organized, it would be good if healthcare entities had a way to integrate external quality measures (from Medicare and the Joint Commission National Patient Safety Goals) in their internal management and processes. I looked at Poudre Valley Health Systems, AlantiCare, and Mercy Health System’s performance measure on their Baldridge applications. One thing I found across the board was that they all commented on how they assure data integrity, security, and HIPPA compliance. The timeliness of the data collection and review are necessary in order for the information to be actionable. By reviewing performance on a frequent basis, health entities can take corrective action to address areas where they are not performing at an adequate level.