Value Stream Management for Lean Healthcare Tapping, Kowolski, Archbold, & Sperl Lecture 1

1. Value Stream Management for Lean HealthcareTapping, Kowolski, Archbold, & SperlLecture 1 IDM 404 Industrial Management Case Studies

2. The Healthcare Crisis – Costs 1 • US healthcare costs are extremely high • Medical tourism is a threat to U.S. system • Bone – marrow transplant • $2.5 million in US • $26,000 in India • Healthcare costs are increasing at double-digit rates each year • Healthcare costs are being transferred to the consumer (patient) • New mothers are sent home within 24 hours of giving birth IDM 404 Dr. Burtner

3. The Healthcare Crisis – Costs 2 • Insurances (Private and Government) • Facility overhead • Majority of hospitals 20-30 years old • Malpractice premiums • Competitive healthcare • Hospitals compete for staff • Hospitals compete for patients • Infrastructure changes (supporting information required by insurance/government) • Decreased funding • Rapidly changing technology requirements IDM 404 Dr. Burtner

4. The Healthcare Crisis – Staffing • Nurses are responsible for direct patient care • Nurses must provide more and more documentation • Nurses asked to provide more with less • Nurses leaving traditional healthcare for related positions (home health, sales, teaching) • New qualified nurses must be found IDM 404 Dr. Burtner

5. The Healthcare Crisis – Boomers • Baby-boomers will require an increase in services throughout the healthcare continuum • Benefits per retiree will accelerate more quickly than the taxpaying workforce that supports retiree benefits • Inadequate savings may result in less money for healthcare IDM 404 Dr. Burtner

6. Contemporary Quality Movements • Six Sigma • Customer-focused statistically-based methodology for reducing defects <Tapping, et al> • Voice of the Customer, designed experimentation to minimize variation and root-cause analysis • Lean • Philosophical approach that works to eliminate waste or non-value added activities while improving process flow <Tapping, et al> • 5 S, visual controls, mistake proofing, kanbans • Lean Six Sigma – combination of both methodologies with an emphasis on identifying waste and reducing defects IDM 404 Dr. Burtner

7. Why Lean Healthcare? • Pressure on Healthcare System to Become Leaner • Consumers’ increasing awareness of the inefficiencies in healthcare • Changing practices of payers (federal gov’t, private insurance, individuals) • HHS (hospital compare) CMS policy toward never events • Healthcare Customers • The ultimate customer in healthcare is the patient • The healthcare system is comprised of multiple internal customers and suppliers • Customers are also stakeholders • Implementation in Healthcare • Applied throughout a complex system (Broad application) • Adopted quickly by various departments with minimal training • Results seen “immediately” by internal and external customers • The Right Methods at the Right Time??? IDM 404 Dr. Burtner

8. Potential Obstacles to Lean Healthcare – Part 1 • Culture of organization or department • “It’s not my job” attitude • Lack of vision or purpose from upper management • Lack of capable processes and standards • Fear of change • Inadequate training IDM 404 Dr. Burtner

9. Potential Obstacles to Lean Healthcare – Part 2 • Financial constraints • Departmental silos • Lack of departmental communication and co-ordination of care or information • Governmental regulations • Legal constraints • Safety concerns • Certification/licensing requirements IDM 404 Dr. Burtner

10. Benefits of Value Stream Management as described by Tapping et al • Focus improvement efforts toward a single customer or patient process • Prevent scope creep • Allow for departmental areas to be improved with minimal resource allocation • Allow resource coordination/allocation across the organization • Allow for a means of moving from the current state to the future state • Provide a structure for the process owner with the necessary skills to initiate projects more frequently • Allow Lean to be understood in everyday terminology IDM 404 Dr. Burtner

11. The Healthcare Crisis - Funding • Emergency Medical Treatment and Active Labor Act (EMTALA) • Requires hospitals and ambulances to provide care to anyone needing emergency treatment regardless of citizenship, legal status, or ability to pay • Does not provide for reimbursement • Decreasing funding from federal, state, and local agencies IDM 404 Dr. Burtner

12. Response to the Healthcare Crisis • The healthcare industry is becoming more motivated to • Improve patient satisfaction • Improve patient care • Improve job satisfaction for healthcare workers • Reduce costs • There is an increasing recognition of the value of creating more efficient patient and non-patient care processes by reducing waste. IDM 404 Dr. Burtner