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Process Improvements Cut Fat, Beef Up Quality

Karen Minich-Pourshadi, for HealthLeaders Media, April 18, 2011

When you consider that 30-40 cents of every dollar spent on healthcare, or more than a half-trillion dollars annually, is spent on costs associated with unnecessary, inefficient and even unsafe care, it should come as no surprise that healthcare leaders are looking for fresh solutions.

In this continuation of our look at process improvement, we see how baby steps taken with small initiatives can lead to giant strides when Six Sigma or Toyota Lean Process Improvement principles are implemented.

Many healthcare leaders are onboard with process improvement at their facilities. Where they are lagging is in the full execution of these initiatives. The American Society for Quality conducted a study of 77 hospitals and found that 53% of hospitals have some type of Lean initiative while 42% are using Six Sigma. Interestingly, the same American Society for Quality study reported that only 4% of hospitals have full deployment of these process improvement initiatives.

The study concludes that in order for Lean management to truly be effective it has to be driven by a unified team mindset—everyone has to believe in and act Lean. Unfortunately the study found that 30% of hospitals are still lacking leadership buy-in while 59% are lacking resources. Two healthcare systems—Virtua and Virginia Mason Medical Center—exemplify the accuracy of that conclusion. Both providers have full management buy-in for their process improvement programs and they are staying ahead of the cost curve.

Virtua, Marlton, NJ

Consisting of four hospitals, Virtua has been using Six Sigma to improve its business operations since 2000, when leaders created a strategic partnership with General Electric.

Rich Miller, CEO and president of Virtua has seen how using this methodology has shaped everything it does.

Virtua, which earns net revenue of $1 billion annually, started the process by talking to managers and looking at their patient and employee satisfaction scores as well as quality scores and operating income.

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