Lean hospitals? How lessons from manufacturing can improve healthcare

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Lean thinking — the philosophy of maximizing customer value while minimizing waste — has long been hailed as a panacea for low productivity and poor performance. Introduced decades ago through the famed Toyota Production System, today lean is moving beyond its factory-floor applications. It is slowly making inroads in the U.S. health care system, which is plagued by high error rates and skyrocketing costs.

“Lean is about eliminating waste, and waste is everywhere,” says Darden Professor Elliott N. Weiss, an authority on operations management. “When you put a customer on hold or order ‘just-in-case’ medical tests, that’s waste. All non-value-adding activities are wasteful.” What’s key, explains Weiss, is to define value from the customer’s perspective and relentlessly improve the way in which that value is delivered.

The Body Imaging Division at the UVA Health System

In 2013, Dr. Arun Krishnaraj joined the Body Imaging Division (BID) at the University of Virginia Health System. BID consisted of several nurses, orderlies and 11 physicians, providing CT scans, ultrasounds and other medical-imaging services. Krishnaraj soon realized that his department was rife with problems and tensions. “I saw a lot of untapped potential,” says Krishnaraj. “I knew that with the right approach, like lean thinking, we could create significant value for the patients.”

Determined to understand his colleagues’ daily work experiences, including their perceptions of the obstacles that hindered their performance, Krishnaraj kicked off a monthlong listening tour. The general sentiment: BID was understaffed and under-resourced; nurses and physicians weren’t communicating well with one another; each attending physician had a different process that medical staff had to follow; and patient scheduling was grossly inefficient, resulting in long wait times. On top of it all, BID staff were working longer and longer hours, which contributed to high stress and low morale.

Lean transformation: Value-stream mapping

Lean transformation starts with a deep understanding of the current situation, often by using a tool called Value-Stream Mapping (VSM). “A value-stream map looks like a flowchart,” says Weiss, who along with Austin English (MBA ’91), introduced lean thinking to Krishnaraj. “It documents key people, materials and information flows that are required to deliver a product or service. It’s designed to identify value-adding steps versus non-value-adding steps in that process, helping identify waste in the system.”

The VSM created by Krishnaraj and his team helped visualize the flow of patient care from the moment a patient entered the BID system and began procedures to the moment he or she left. The VSM revealed several important insights: patient prep labs weren’t consistently available; processes had been developed ad hoc; scheduling procedures were neither well-defined nor consistent; and trainees weren’t trained in a standard manner.

“Value-Stream Mapping,” says Krishnaraj, “was an opportunity for our group to think broadly about the problems and begin to look at each person’s perspectives as important parts of the solution. Fixing the problems, or what is called ‘countermeasures,’ came later.”

A3 problem-solving

To dig deeper, the BID team turned to another lean tool, the A3 Report, whose name derives from an A3-sized sheet of paper that the problem and solution have to fit on. “A3,” says Weiss, “is a visual reference that helps to define clearly the problems, goals, current state and planned countermeasures for the group to see, refer to and modify as their lean journey progresses.”

Among the top five issues deemed critical was that nurses were overburdened with work that under-utilized their technical expertise. The A3 helped the BID team pinpoint root causes of this problem: Nurses were expected to perform housekeeping, transportation and other support work. The proposed countermeasure was to improve the utilization of nursing skills, which required changes to the process of transporting patients to and from the clinic and to housekeeping services. The BID team developed countermeasures to other critical problems identified in the VSM, and, once they were implemented, the flow of patient care started to improve.

“What lean does,” says Krishnaraj, “rather than reflexively jump to a solution, you first explore the issues at hand, you do root cause analysis, trying to understand the problem. Then, you develop countermeasures that look at improving standardization across the service, improving communication, and acknowledging and empowering everyone along the chain to do that.”

Lean's measurable results

According to Krishnaraj, initial improvements at BID were apparent about six months into the lean transformation process. Over the next three years, the division experienced 60 percent growth in average monthly volume of medical-imaging procedures while simultaneously eliminating overtime. Despite the substantial increase in volume, average wait-time for CT procedures was reduced from about six to three days, without adding staff. And last but not least, employee satisfaction and engagement improved dramatically.

Lean holds great potential for many process- and service-oriented industries, including health care. However, the service sector has been slow to adopt lean thinking, likely because of its historic origins in manufacturing. But, as BID’s transformation demonstrates, lean approaches to eliminating waste and process improvement in health care can save time, reduce costs, improve productivity and, ultimately, make patients better, faster.

This article was developed with the support of Darden’s Batten Institute for Entrepreneurship and Innovation, at which Gosia Glinska is associate director of research impact.

Elliott N. Weiss is the author of numerous articles in the areas of production management and operations research and has extensive consulting experience for both manufacturing and service companies in the areas of production scheduling, workflow management, logistics, lean conversions and total productive maintenance. 

[This article has been reproduced with permission from University Of Virginia's Darden School Of Business. This piece originally appeared on Darden Ideas to Action.]