What is Lean Management?

Lean Management

Over the last year, IPeople has been actively implementing lean management concepts internally. We are focused on building a lean culture so that we can continue providing exceptional value to our customers… You! Over the last year, we have learned a lot and we would love to extend that knowledge to you so that you can learn how lean thinking can benefit your organization. IPeople is seeing the results and so can your organization! Let’s start at the beginning and answer two big questions:

(1) What is lean? and (2) Why do healthcare organizations choose this framework and what are the benefits?

WHAT IS LEAN?

Lean is a simple concept… lean means creating more value for customers. It is an approach to running an organization through continuous improvement. We definitely do not want to overcomplicate the ideas behind lean. It is not about tools (how), it is about thinking (why). In a lean organization, every member of the organization needs to think about better ways to get things done… it is about using less to do much more! All members need to think about how to do work better, experiment with new ideas, and learn from these experiments. That is the lean way! The two fundamental principles of lean are respect the employees and reduce waste.

But one might ask… can lean really work in the healthcare industry? Well, let’s start by asking is there waste in healthcare? And the answer to that question is a definite YES… there is waste of time, money, supplies, and good will. Healthcare has many complicated processes and a lot of waste:

  • “20 – 30% of Healthcare Spending is Waste”*
  • Overtreatment of patients
  • Failure to coordinate care
  • Administrative complexity
  • Burdensome rules
  • Fraud
  • Only 31-34% of nurse time spent with patients**
  • 80% or more of the time spent in healthcare processes is waste

* Donald Berwick, former administrator of the Centers for Medicare and Medicaid Services, former President, Institute for Healthcare Improvement

** Data collected from multiple sources by Mark Graban

The lean principle can, and do, work in healthcare in much the same way that they work in other industries. Lean truly is a cultural transformation that changes how any organization, including hospitals and other healthcare facilities, think and work. Lean thinking begins with driving out waste so that all work adds value and benefits the customer… the patients!

WHY LEAN?

Lean principles have been used in many different industries and today many healthcare organizations are taking advantage of these principles to improve the quality of care. Let’s face it, there are many financial pressures that healthcare organizations face every day and these pressures continue to grow. Some hospitals use the traditional cost cutting methods to save money which can include layoffs and staff reductions. Many more hospitals are finding ways to reduce costs, improve quality, and delight both employees and customers through the lean management methods.

When implemented successfully, lean can help your organization achieve the highest quality of patient care, deliver reliable care, lower costs for the organization, eliminate medical errors to improve patient safety, cut delays, reduce patient stays, increase morale… and the list goes on! If an organization has the discipline to keep lean going, then the long-term benefits can be tremendous. This sounds too good to be true, right? Don’t just take my word on it… let’s take a look at some success stories from other hospitals. Below are just a few organizations that have experienced great results through lean including improved patient care!

  • A children’s hospital applied lean principles to empower their staff to eliminate activities that did not add value to the patient experience, reducing costs by over $8 million during a two year period, while shrinking appointment access waiting times by nearly 75,000 days.
  • A Midwestern hospital deployed a lean implementation team to redesign the hospital lab process, consolidate redundant equipment and reconfigure personnel roles. The changes resulted in a 53% improvement in turnaround time for patient blood test results and nearly $500,000 in annual savings.
  • Emergency room employees at nine northern Virginia hospitals used lean principles and practices to reduce emergency room waiting times. The consortium reported a 31% drop in average waiting time, and a four-fold reduction in the number of patients who left the emergency room without being seen by a medical professional.

 

SUMMARY

Lean is really about continuous improvement, problem-solving, and delighting both patients and employees. To become lean means that all people in the organization are focused on continuous improvement, exposing problems, identifying the root cause of problems, and eliminating those causes. It is all about improving upon improvements! The business of healthcare is undergoing a significant transformation as organizations seek innovative ways to improve quality of service and reduce costs. With its focus on increasing value, lean has the potential to help balance the cost associated with healthcare, increase job satisfaction, and fundamentally improve patient care.