Hospitals have to focus their efforts on identifying and eliminating waste of all forms if they are to succeed in today’s competitive landscape. A recent study by the Murphy Leadership Institute (Murphy, 2003) concluded that wasteful work consumes more than 35% of hospital employees’ time. This wasteful work includes activities such as completing multiple forms for the same task, filing inefficient shift-to-shift departmental reports, waiting for medications, and searching for misplaced records. Jimmerson warns that the actual amount of waste in health care lies closer to 60% (Panchek, 2003). In this chapter, we briefly review principles of lean philosophy for improving performance and then present a classification of waste that is relevant to hospital management. This classification is aimed at directing hospital initiatives toward understanding and controlling waste in its health care delivery processes. Through several examples from real-life hospital case studies that we have investigated, we trace much of the waste to various types of variability (both natural and artificial) and offer prescriptions to control variability. We then provide some guidelines for streamlining processes and show how this would benefit various stakeholders. We conclude the chapter with some directions for further research.
Key Terms in this Chapter
Patient Resident Time: The amount of time a patient spends in the health care system, typically measured from the moment he or she enters the system until time of medical discharge.
Wasteful Work: Wasteful work is the fraction of the total time and effort in any organization that does not add value for the end customer. By clearly defining value for a specific product or service from the end customer’s perspective, all the nonvalue activities, or waste, can be targeted for removal step by step. For most production operations, only 5% of activities add value; 35% are necessary nonvalue-adding activities, and 60% add no value at all. Eliminating this waste is the greatest potential source of improvement in corporate performance and customer service.
Natural Variability: A source of great waste in the health care delivery system is excessive variability in the processes used to provide care. Natural variability is largely outside the control of a hospital. It includes clinical variability (patients differ in the type and severity of their diseases, and similar patients respond differently to treatment), patient demand variability (patients arrive for treatment randomly over time), and professional variability (different providers treat similar patients in different ways), which has given rise to the development of approaches like practice guidelines and clinical pathways.
Artificial Variability: The poor management of the processes used to provide care. This type of variability (dysfunctional management and policies) can be reduced.
Lean Principles: Lean principles were originally developed in Toyota’s manufacturing operations, known as the Toyota Production System. The term was popularized in the seminal book, The Machine that Changed the World (Womack et al., 1990), which clearly illustrated for the first time the significant performance gap between the Japanese and Western automotive industries.
Patients in Progress (PIP): In a hospital environment, patients in progress (PIP) represent the number of patients in the system at one time. PIP is a form of inventory, and the level of PIP is determined by batching considerations and variability.