Lean thinking slims down hospitals

Materials Management in Health Care

Because keeping track of equipment is a constant headache, some hospitals have invested $1 million or more in complex software to track down errant pieces of equipment so that someone can go fetch them.

But what if the hospital found a simpler way of handling equipment that made these expensive and time-consuming steps unnecessary? Four years ago, this sort of out-of-the-box thinking occurred to Allen Caudle, vice president for supply chain management at Swedish Medical Center , a 1296-bed system with three acute-care facilities.

Seattle , with Microsoft Corp. based nearby, is to some degree a bastion of high-tech, and Caudle was prepared to join the trend in high-tech tracking of hospital equipment. He would have purchased a system that would have required installing signaling devices all over the hospital.

Then he discovered “lean thinking,” a decidedly low-tech approach developed by Toyota Motor Corp. in Japan a half century ago. It had already been adopted by the Boeing Corp. for its nearby airplane plants and was just starting to make the leap into health care.

Caudle dropped plans for the tracking system, adopted the lean system and told staffers to fan out with stopwatches, paper and pencils to closely observe employees as they do their jobs. Somewhat like ornithologists painstakingly tracking a flock of rare birds, staffers mark each employee's movements in looping lines on a paper diagram of the workplace, called a spaghetti chart. Then, in five-day workshops, also known as kaizen events, management and front-line workers debate ways to reduce the size and number of those loops and create a more efficient process.

The workshops came up with some disarmingly simple changes that have profoundly improved efficiency, quality and employee morale at the hospital.

A key principle of lean is to reduce waste and make work easier and simpler. That's a big change for hospitals, where systems just seem to get more complex. At Swedish, for example, intravenous pumps were constantly being misplaced on their journey from the patient's bedside to sterile processing and back again.

The Swedish workshop working on IV pumps decided it would take a great deal less work just to leave them in the patient's room. But who would clean them there? Environmental services workers are there every day to make the bed. Could they do it? No one had ever proposed such an idea, and it seemed absurd at first, but no one could come up with a good reason not to do it.

Environmental services workers were trained to clean the pumps and they began their performing new duties. As a result, cleaning costs fell from $12.65 per pump to 65 cents and the turnaround time for clean pumps went from 21 hours to 34 minutes.

Caudle calls such solutions “brains before bucks.” He and his staff insist they are not anti-technology, pointing out that Swedish actually uses some high-tech tracking devices, such as point-of-use cabinets and bar code scanners. But before bringing in all the bells and whistles of automation, they use lean to fix the basic process.

“If you automate a broken process,” Caudle likes to say, “you make mistakes at the speed of light.”

Caudle and his employees also set to work on another frustrating issue – slow delivery and low accuracy of surgical case carts, a problem that directly affects quality and efficiency of the surgery department. It was a high priority for Swedish because surgery is a chief money-maker.

Again, staff closely tracked workers building the carts and brought their charts to the kaizen event, where intense discussion yielded some dramatic solutions.

In the cart-assembly area, storage areas for frequently used pieces were brought closer together to cut down precious footsteps to get them. As a result, the average time it took to build a case cart fell from 86 minutes to less than 15 minutes, and accuracy of the contents of the case carts improved.

The shortened time allowed materials management to move from batching orders the night before, as most materials management departments do, to assembling each case cart “just in time” for use, which is a key lean concept. Materials management could then build carts for last-minute cases and not build them for canceled cases, making the operation even more efficient.

A new approach for hospitals

Using lean principles, Toyota manufactured cars with half the human effort, half the manufacturing space and half the capital investment that other car manufacturers. Lean has since become a mantra of American industry, including giants like Boeing, General Motors and Dell Computer Corp.

In the past few years, partly due to the urging of manufacturing executives on their boards, a handful of hospitals across the country have adopted lean thinking. Caudle says some people don't see a connection between manufacturing and health care, but “the fact is we're a manufacturing facility. The same processes are involved. We process raw materials, and the assembly line is the surgery suite.”

Cindy Jimmerson, RN, a lean health care consultant based in Bonner, Mont. , argues that lean is “exactly what hospitals need right now." Some facilities in her state are at the brink of closing because they are inefficient, but "if you could reduce the waste, these hospitals would be fine,” she says.

In addition to reducing waste, Jimmerson says the process also reduces errors by simplifying and standardizing complex hospital management systems. And, she says, it improves employee satisfaction by giving them new processes that are less frustrating to work with. 

Saint Mary's Hospital, a 324-bed hospital in Grand Rapids , Mich. , just finished using lean to improve processing of sterile surgical instruments. John Collins, MD, vice president for quality at the hospital, says front-line employees play a direct role in coming up with improved work patterns. The employees “get very engaged,” he says. “They go back to their work and become advocates of the new process.”

"Lean thinking incorporates a principle of visualizing your work," says Sandra Rose, RN, the lean facilitator at Saint Mary's. Rose and others closely observed the surgical supply process, from central sterile and materials management to the OR. Then, as the lean process requires, the information was brought to an intensive three-day workshop made up of directors and front-line employees from affected areas.

The group asked tough questions in an attempt to break through conventional ways of thinking and come up with a dramatically simpler way of doing things. They noted that when OR staff needed an extra item, such as a scalpel, they had to go to a supply room on a different floor or call up central sterilization. Sometimes several workers were called before the item arrived.

To remove these bottlenecks, the workshop decided to set up shelves right outside the OR, stocked with typically needed items. This reduced calls to central services. It also allowed just one or two phone numbers for central services, so that several workers wouldn't waste time by carrying out the same request.

Numbers of calls to central sterile fell immediately. Within two weeks of making the changes, surgery reported that it had all the items it needed. Surgical volume increased, and then accuracy plummeted. What happened was that under the increased pressure, central sterile employees “fell back to their old ways,” Rose said. The team then regrouped to improve accuracy again. Lean experts will often point out that the process is an ongoing effort that never stops.

Success stories for hospitals of all sizes

Medium-sized hospitals are also applying lean thinking. Jimmerson says she helped Community Medical Center , a 135-bed hospital in Missoula , Mont. , convert to lean throughout the organization. One project was rethinking supply rooms in the hospital's 48-bed med-surg unit. Community made the location and stock of materials match the work. As a result, it reduced the value of the stock by $7,900 and the unit's calls to materials management for more supplies from 32 a day to two a week.

Since lean is so simple and low-tech, Jimmerson says it can also be applied to small hospitals. Since personnel like nurses cannot afford to be away from work for long, she does not use the three- to five-day kaizen event.

Scott Decker, vice president of quality at Appleton, Wis.-based ThedaCare Hospitals, a three-hospital organization, including a 25-bed facility, reports that the organization used lean all over the organization, including reducing supplies in its ORs and cath labs. Using one common lean approach, easy-to-identify colors were pasted on shelves, appearing as more articles were removed. Green appeared first, denoting a sufficient supply; then yellow, meaning it was time reorder; and finally red, meaning there was now a shortage of that item on the shelf.

Decker says ThedaCare saved $7 million dollars on all lean projects last year, with one-half million of that in supplies. Lean also helped the organization to reduce the workforce by 80 FTEs through work redesigns without lay-offs.

Larger hospitals are also moving ahead with the new approach. Back in Seattle , Virginia Mason Medical Center, a 336-bed hospital, was an early adopter of lean thinking in health care. Several years ago, CEO Gary S. Kaplan sent top executives to Japan to study the Toyota system first-hand. Among other things, John Donnelly, administrative director of supply chain at Virginia Mason, says he used the lean process to move from batching case carts to just-in-time delivery and to change the location of supplies and avoided duplication.

As a result of all its lean activities, Virginia Mason reports that it has saved $6 million in planned capital investment, freed 13,000 square feet of space, cut inventory costs by $360,000, reduced staff walking by 34 miles a day and improved patient satisfaction.

But is it really so unique?

John E. SiedIinski, a materials management consultant based in Naperville , Ill. , says hospitals have been using similar strategies for years.

“Lean management is a good concept, whatever name is applied to it, but it is not new,” he says. “In the 1980s we called it productivity improvement. The idea was that you either moved the work or moved the workers. With lean management, you quantify the movement in more detail, but you don't necessarily need the detail to understand what needs to be changed. Lean management serves to quantify what your gut may already tells you makes perfect sense.”

Lean specialists, however, disagree. Matt Morissette, a lean health care consultant based in Mont Vernon, N.H., says lean is both simpler and more comprehensive than other methods in use today. He says the balanced scorecard (TBS) comes with no tools to correct the problems it identifies, while Six Sigma is a highly statistical approach that is “not easily adaptable to health care front-line employees,” but it can be used in combination with lean.

Jerry Balzer, operations manager for logistics at Swedish Medical Center , says several aspects of lean thinking are unique, such as actually going on-site, looking closely at the work flow and then documenting it. He adds that lean management follows up on changes to make sure they are still working.

Tom Moench, a former lean advisor at Boeing who helped establish the system at Swedish, says lean also pushes hard for change. In a kaizen event, “someone says, ‘We can't do that,' and then they work through it,” he says. “The process gives them tools to go beyond what they think is possible.”

Ken Fortune, director of logistics at Swedish, says discussions in the kaizen events, though sometimes heated, help build lasting ties between departments, such as central sterilization and surgery, where lack of communication can be a key factor in wasteful processes.

“There is a true sense of ‘team' and an understanding of people's roles,” Fortune says, adding that the process is blame-free. “It's very easy to step back and blame someone because the case cart wasn't ready on time,” he says. Instead, he adds, people have learned to see that “everybody is working very hard at what they do. It just may not be efficient.”

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