Healthcare Leaders Look Outside for Answers

Applied to hospitals, the term factory sounds like a metaphor for a mechanistic, uncaring environment.  Nevertheless, a growing number of healthcare leaders are employing management ideas from manufacturing and other industries to make their facilities more cost-effective and at the same time, more responsive to the needs of patients, their families, and staff.

Steve Read, VP Corporate Services and CFO of Brockville General Hospital in Brockville, Ontario, draws on his background in the manufacturing sector as his organization adjusts to a tough fiscal environment.  “The economy influences how governments choose to fund healthcare,” says Read, “and right now the industry is going through a transformation where resources are tight and there’s pressure on all aspects of the healthcare system to rethink their processes and rethink the way they operate.”

In Read’s previous role, having to adapt was a given – manufacturing in particular has been transforming itself for decades, drawing on methodologies such as Lean, Six Sigma, Just in Time, and Total Quality Management.  Today, these approaches are commonplace in virtually every industry, including healthcare.

The fact that these methods, Lean in particular, help organizations do more with less makes them particularly applicable to today’s healthcare challenges. “In hospital administration specifically, the options to deal with financial constraints are fewer than they are in industry,” says Read.  “We cannot, for example, make a unilateral decision to not provide a particular service because it is not contributing to our financial plan.”

The need to provide the best possible care with limited resources prompted the CEO of St. Joseph’s Health System in Hamilton, Ontario, Dr. Kevin Smith, to engage the Lean consulting arm of Japanese automaker Toyota.  While there were initial questions as to why hospital administrators were visiting a car plant, Smith’s management team found that when they looked at Toyota from a process perspective, there was much to be learned.

“We saw that they had very good systems in place for creating flow, improving processes, and standardizing their work, all of which are very relevant to our work looking after patients,” says Smith.  “They also had very clear models for course correction when that may have been required, and rapid intervention in case of a problem.”

The processes were underlined by a continuous drive to do things “better, faster, cheaper”, and the empowerment of employees.  “Toyota really took people who do the work, gave them training and skills, allowed them to make changes in how they do their work as a team,” says Smith.  “The attitude was, ‘if it works, continue, if not, let’s figure out why, or move on to the next idea.’”

Seeing the Big Picture

The key to the common ground between hospital and industry is the customer, says former plant manager Larry Coté, whose firm, Ottawa-based Lean Advisors Inc., provides Lean consulting and training to healthcare providers across Canada.  “It’s not about cars and whether that’s similar to healthcare,” says Coté  “It’s that they both have processes that provide something of value to a client.  As far as the analysis, the thinking is very similar because you are looking at what is value from the perspective of the client, or the patient going through the medical system.”

The healthcare experience, of course, transcends many functional groups as the patient interacts with doctors, nurses, lab personnel, and administrators.  “Looking at all these interactions from the patient perspective forces decision-makers to consider the big picture that starts when a patient approaches the hospital or clinic seeking help, and concludes when the patient is dispatched after having received the required care,” says Coté.

Hospitals perform best when processes are in place that allow patients to flow through the system at a steady, manageable pace.  When patient flow is achieved, staff don’t get spikes of activity where they are overworked, patients don’t have to wait between processes, and the best quality is achieved at the lowest cost.  This kind of process environment can be implemented in a hospital, a factory, or virtually any other work scenario.

Two other components – information flow and communication flow – are also essential, as they make it possible for different functional groups to perform as a unified entity from the patient perspective.  These flows are also key to eliminating the waste that occurs throughout the system.

“By focusing on these things as a system, as a process that goes beyond functional centres and specific tasks, I think the healthcare sector is finding the same things that industrial sectors found,” says Read, “ – that there is waste to be found, and there are ways of eliminating it, and there are techniques that can be used to facilitate that.”

Managing Between the Processes

One of the most visible symptoms of waste in healthcare is patients sitting around in waiting rooms, taking up space in already-crowded facilities.  Smith recalls a simple question posed by a visiting advisor from Toyota who was viewing their ER – if waiting is not a good thing, why are there waiting rooms?  Smith says he was initially puzzled by the question, but then saw its implications.

“If you don’t have a waiting room, much like not having storage capacity in a car line, things are going to start backing up, and you’re going to have to start to figure out a different way of doing things,” says Smith.  By reducing the available space to conveniently “tuck patients away”, St. Joseph’s subsequently found ways to reduce ER wait times, save valuable space, and furthermore, to use the space to provide treatment on the spot for children’s ear infections and other routine, non-confidential situations.