Enhancing Profitability in Healthcare with Lean Operations
Lean is a control system made popular by Toyota Manufacturing System, has enabled hospitals and health care organizations to provide patients, caregivers, and their local neighborhoods with world-class consistency and customer support.
Lean improvement is based on two themes:
- Continuous Improvement (a different way to state elimination of waste), and
- Respect for All People
Continuous Improvement
To understand continuous improvement, the activities in an organization should be divided into Value Adding activities and Non-Value Adding Activities.
A value-added activity is one that changes form, or function of a product or any activity for which a customer is willing to pay. In healthcare a value adding activity is one which directly improves customer/patient satisfaction.
Non value adding activities on the other hand activities that takes time, space, or resources, but does not change the form, fit, or function of the product or service or for which the customer might not be willing to pay. It is the job of the healthcare service provider is to identify the activities that directly meet the customers needs, as those are the value-added activities
In order to determine value-added activities, a health care provider need to identify the customer, specify his/her needs, and determine which activities directly
meet those needs, the customer in this circumstance is the patient. Continuous improvements using lean systems involves identifying and prioritizing value-added activities while eliminating non value-added activities.
Quality Improvement using Lean Systems involves the identification and
elimination of nonvalue-added activities.
Respect for All People
Improvements using Lean Systems must have measurable benefits to Patients, staff, doctors, regulatory agencies and suppliers. Lean System acknowledges the importance of carrying everyone along to engender trust by building whilst taking individual and team responsibility. This is the only way to get a “buy in”,by letting all the stakeholders know continually providing better and safer care,reducing lead times for services, increasing access, and continuously lowering the cost of services, increases the value of the healthcare that is delivered.
Eliminating Waste
As said earlier, Nonvalue-added activity (waste) needs to be eliminated. Such wastes include waiting, Excess Inventory, Errors and Defects, Inefficient Transportation and Movement, Unused Man Hours and Overprocessing. Other, not so obvious wastes, such as unused abilities and faulty organisational structures also need to be eliminated.
Can your organisation’s management structure and design cause waste? One of the common healthcare problems is that many departments are operating in silos.
They have their own budgets, management, staff, patients/services and measurement objectives for each department.
The principle of value addition/non-value-added states that 95 to 99% of our work is non-value addition to the patient.
After you have practiced waste identification in a short time and are at ease with value-added concepts and value-added concepts, waste becomes apparent and abundant. The hardest part is not identifying waste, but eliminating them.
An increasing number of healthcare organisations today are discovering the advantages of Lean : A simple principles and methodology management system which can be implemented in each organisation to produce measurable and sustainable improvement results.
You can do so if you apply the Lean approach to all you do.
About the Author
Afolabi Dare Olanrewaju
Afolabi is a Chartered Accountant and Certified Management Consultant with a passion passion for Growth Hacking using Tech Tools.
Presently, he is the General Manager of Medpau International Limited.