According to this Harvard Business School report, as much as 35% of healthcare spending is wasted in inefficient practices, excessive pricing and inappropriate treatments. These shocking figures have prompted many healthcare facilities, including community health centers, to adopt the lean management principles that have been so effective in the automobile industry to identify and eliminate waste. Toyota, the originator of lean manufacturing, isolated seven methods of reducing waste.
1. Transport
This can be explained as the movement of patients, equipment and medical supplies from one place to another. This takes time and costs money, but there is no direct benefit to the patient or health center. Eliminating excess transportation reduces nonproductive costs.
2. Inventory
Medical inventories are expensive because they tie up cash and take up valuable space that could be utilized more effectively. Another problem with excess inventory is that it exacerbates the problem of managing expiry dates, which means that medicines may end up being purchased and then thrown away.
3. Motion
Unnecessary motion takes effort and time. This includes excessive walking between workstations, having to fetch supplies and the use of equipment that requires high degrees of effort and movement. These detract from the time medical staff has to care for and treat patients. Although this may seem a bit like nit picking, the cumulative time lost by excessive motion is significant.
4. Waiting
A characteristic of many community health centers is the need to wait. While this is usually viewed as a necessary evil, the accumulative costs to the economy are staggering. The same applies when medical staff have to wait to speak to someone, linger to receive a report or pause during work to get medications from the dispensary.
5. Over-Processing
Over-processing is when inapplicable processes are used to perform a task. From a medical perspective, this includes ordering expensive tests, procedures and assessments when they are not clinically indicated. It also includes sending a patient for a scan or X-ray when a simpler diagnostic method is as effective.
6. Overproduction
While similar to over-processing, overproduction is defined as doing more than is needed. For example, it could apply to screening practices that may be of limited benefit to certain categories of patients. It would also include ordering too many micro panels, just in case, rather than the number actually needed.
7. Defects
The cost of rectifying something that goes wrong is always much higher than preventing the defect in the first place. This would include medication or documentation errors that have to be rectified as well as administrative errors and poor quality work. Correcting defects wastes clinical resources and increase costs.
These lean management techniques appear to be deceptively simple, yet it was adherence to these seven principles that enabled the Japanese motor industry to catch up with, and overtake, the American automobile giants. It may be time to apply them to containing costs in your community health center.
Concordance Healthcare Solutions can help, contact us to find out how.
