Steff Deschenes, New Media Producer
Steff Deschenes is a former New Media Producer for Healthcare Finance News.
8 kinds of waste driving healthcare costs
August 14, 2012
There's a tremendous amount of waste occurring in the healthcare industry. In order to address that waste, organizations are moving to lean management because it exposes what and where these wastes are and rethinks the way work is done via value streams.
Most providers are set up by departments, or vertical silos. In the case of manufacturing, it's products that traverse these departments, from receiving an order to collecting the money for it. In healthcare, what traverses departments are the patients.
Tracking patients horizontally through a healthcare value stream changes the way you think about what's value-added and what's not said Marc Hafer, author of the book Simpler Healthcare and CEO of Simpler, a firm globally dedicated to lean application, techniques and transformation in healthcare. "When you reconstruct patient flow through an experience at a clinic and you think horizontally... that's when you see all the waste there really is," he said.
Hafer shared with Healthcare Finance News the eight different types of waste that inhibit patient flow, add cost, increase poor quality and infection and decrease patient and clinician satisfaction. "When you remove waste, all these things change for the better," remarked Hafer. "The value-added stream method is fundamental for patient flow in healthcare organizations."
1. Transportation
Transportation is entirely non-value-added. "It contributes nothing to patient care. It adds to delays and increases likelihood there will be defects and dissatisfaction," Hafer said. Transportation includes moving patients from one department to the next, shifting supplies and equipment and moving instruments from sterile processing areas to the OR and back again – and even when patients travel to and from the actual hospital itself.
2. Inventory
Inventory can include pharmaceuticals, supplies, and patients, too, if you consider a waiting room in a hospital. The replenishment system should be based on use as opposed to some forecast. "Only what's needed when it's needed is a good approach with inventory," Hafer said.
3. Unnecessary motions
Reaching, bending, twisting, turning. These motions are all ergonomic issues abundant within healthcare. Clinicians are injured because processes like transporting a patient from wheelchairs to beds aren't designed ergonomically. Staff takes time off for rehabilitation when unnecessary motions incapacitate them, which can result in a loss of productivity and enhance overall costs.
4. Waiting
Showing 3 Comments
Steven Crowe say: colinmlay - Yes, we do in
August 15, 2012 | 12:44 PM GMT
colinmlay -
Yes, we do in fact *know* how to reduce the spread of infection in hospital. Lister and Nightingale had a profound impact on this - great enough that we are still using their methodologies and techniques almost unchanged today. Nightingale's reforms still govern the nurse-doctor and nurse-patient relationships, and while we may not always use carbolic acid to sterilize medical equipment and environments, we still follow that practice. We have also improved on it, by discarding needles as opposed to reusing them and a myriad of other things along this same logic. Nightingale (and I know that referring only to two people here is limiting - but in truth, a handful of people are responsible for so much during the late nineteenth century) called on constant discipline and upkeep from her nurses.
The problem, as you stated, is maintaining good practice. This may be a chronic problem in and of itself whic has remained as a constant throughout history. Perhaps, then, we should not state HAI rates as the problem, but rather a symptom. The disease, or defect, I would call the limits of human efficiency. Which, may be to my point about the reality of the limits of both man and medicine.
I'm sorry to keep working with historical examples here, but It's both a) what I know, and b) worth going over. It may be cliche, but the old saying is true - "You can't know where you're going until you know where you've been." You want to know why things are the way they are? Start looking back at how they got that way. (The rants of the historian are filled with these)
Steven Crowe say: Great Article
August 15, 2012 | 10:14 AM GMT
This was a well written article, and realistically can be applied to other business areas as well.
The only bit that I'll disagree with is really nit-picking. In the Defects section, either you or Hafer mention "hospital-acquired infections." As medicine currently stands as a professional scientific field, this is not something we can do much about. Having researched late 19th century medicine, I can say that methods are about as good as we can make them today given knowledge available. Lister's antiseptic work; Nightingale's nurse and hospital space reforms; bacteriological advances by Pasteur, Koch, Kitasato, and others all advanced medicine and created the modern hospital. The conditions in hospitals has steadily improved, with rapid advances in the face of medical breakthroughs such as penicillin.
Before I truly start rambling, I will simply state this: We are doing the best we can with the knowledge we have available to us. I would not class "hospital-acquired infections" as healthcare waste; instead, I would call it the current nature of the beast, so to speak. Just as before Snow's work with anesthesia, the operating room was a place of tortured screams, so too is the hospital paradoxically a center for healing and infection. At lease until someone advances the discipline to eradicate this.
Ok, I really need to stop rambling now.
Colin Lay say: Lean Management - 8 kinds of waste
Two comments:
1. The previous commenter suggested that hospital acquired infections are not defects, but rather part of the environment, and that they are reflective of our current state of knowledge. I believe that, to a certain extent, nosocomial infections are a result of flawed work practices. We do know how to reduce the spread of infections in hospital, but it does require continuous attention to good practices.
2. The article does not suggest how to determine the cost associated with any of these 8 kinds of waste. All hospitals require silo-oriented financial accounting and reporting. In the USA only about 30% to 40% of them go beyond that with basic tools that allow tracking costs accumulated by individual patients (or specific groups) across the silos. Patient oriented cost accounting and activity based costing can capture detailed costs within and across silos. Decision support systems with added analytical capabilities can then trace the added costs attributable to at least some of the 8 kinds of waste, and then bring them to the attention of managers, including senior management.
It would be interesting to hear from hospitals that do practice lean management principles to know how they quantify the benefits and costs of doing so.