You Can Save Healthcare Money By Getting Lean
Source: Hudson Valley Business Journal – November 10, 2008
By: Dylan Skriloff
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A study by the nonpartisan Center of Studying Health System Change found that one in every five families had trouble paying medical bills in 2007 and another study done by Hewitt Associates predicts that American workers with job-based health insurance can expect to spend 8.9 percent more for their healthcare in 2009. At this rate we will all be working just to pay the healthcare bill within a couple more decades. Enter Ron Wince, CEO of Guidon Performance Solutions and purveyor of the popular “Lean” system of efficiency.
Based on practices developed by the Toyota corporation, Lean seeks to make a business operation run as smoothly as possible. Wince says healthcare costs could be cut significantly if Lean is used throughout the system, from hospitals, to HMO’s, to doctors’ offices. Wince said, “Lean is a measure of processes by the vantage point of the customer. Lean quantifies everything and puts it into two buckets; one that contributes to what the customer values and one that does not. What we find is that 5 percent of the time we spend is value-added and 95 percent of the things we do are non-value added. How do we attack the non-value added that is most of the time a lot of waste?”
“To apply that to healthcare is to take a patient-centric vantage point. Think back to the last time you went to a primary care physician. Think of the time that really mattered. You go to find out if anything is wrong and what to do about it. The rest is non-value added. How do we reduce wait times? Look at scheduling appointments. Look at paper work. How do we keep from having to wait to get a prescription?” Wince continued. “A lot of time you can do that by using common-sense. Standardize, reduce walking times; it’s not rocket science, it’s looking at processes to reduce waste. If you do that, pretty much across the board you are going to get double digit improvements in efficiency. It’s all about getting rid of waste, so we can respond to market and be more accurate in doing things that the customer cares about,” Wince said. Wince said his company has helped many hospitals apply Lean principles.
Some prominent hospitals, not necessarily Wince’s clients, who are using Lean are Virginia Mason, the Cleveland Clinic and Johns Hopkins. “While Lean does not necessarily address the causes of the upward spiral in healthcare costs, it does offer practical suggestions to trim the budget,” Wince said. “We did some work in an Operating Room for example. Some of the things we found are that there are a lot of points where an OR Technician is walking a huge distance to get something during a procedure. We found if we arranged the way the equipment was stored and put more used stuff closer it would decrease walking distance the equivalent of two full-time employees. We found they freed up all that time,” he said.
Wince said Lean is also a way of business life that benefits customers and should make everybody’s day easier and more productive. As such, it is becoming integrated into American business life at the level of education. “Community Colleges are starting to teach it; Business Schools; Engineering Schools,” said Wince. “A lot of places you can learn about it online. We offer training classes. Even the government is getting involved in Lean.”
Wince said clients generally experience four to five times on their investment for all of their work. The aim of Lean is to save 10-15 percent on labor costs on a year-over basis. “You can take more waste out every year. Companies like Toyota, continue to take waste out and they have been doing it for 50 years.” Wince is also a member of the Center for Health Transformation. For more information about Guidon visit www.guidonps.com.
All contents © 2008 Hudson Valley Journal. All Rights Reserved.
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