Toyota Way and Lean - Performance Excellence - Health Care Costs

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Performance Excellence Methods

To create excellent results, many hospitals have found that they must change their entire culture. Many staff are set in their ways and resistant to change. Creating a lean culture is one of the most fundamental ways to begin change. Several hospitals have adopted methods first used by manufacturers of automobiles, most notably Toyota. The auto manufacturer once found itself in the same position that many hospitals are currently in; change or be out of business. There are many facets of the Toyota way, but when applied to health care organizations, a very adaptable lesson is to eliminate waste. Waste takes many more forms than just physical trash; it can be in wasted space for storage, wasted motion of staff members and wasted time. Performance excellence can study everything from overstock of medical supplies to wasted motion of staff. An example would be observing nurses walking repetitively between rooms for supplies. If a nurse has to leave the patient or several patients for the same supplies then management should consider moving the supplies to the individual rooms if possible. Doing this would save the organization money as nurses should be paid to take care of patients, not be walking for supplies.

Believers in Performance Excellence

One of the largest subscribers to the effectiveness of performance excellence is Stanford Health Care (Stanford Health Care, 2016). Stanford closely models the Toyota Way Model and has created the Stanford Operating System (SOS) (D. Gunderson, personal communication, 2016). Stanford, long known as a premier medical facility, was not immune to the reimbursement situations previously described. In 2011, Stanford’s Emergency Department was in crisis, declining patient satisfaction was leading to declining reimbursements and staff morale was quite poor. With creation of a performance excellence department, Stanford took an analytical approach to these problems and began following patients from admission to discharge, identifying where value was added and where value was wasted. The ER project was eventually expanded to other departments where waste was identified and eliminated. The projects have all produced financial savings as well as a sharp rise in patient satisfaction scores. The performance excellence is now a permanent department at Stanford and perhaps more importantly, the operational culture of the entire organization has changed for the better (D. Gunderson, personal communication, 2016).

Conclusion

Performance excellence has been born of the changing environment that the health care industry has found itself in. Declining reimbursements has made clear that business as usual for hospitals especially, will only lead to insolvency and closed doors. Many hospitals have to change their entire culture and empower employees to identify and eliminate waste. Lean concepts and the Toyota Way are proving to be excellent models for achieving organizational change. The Toyota Way has been adopted by several major hospitals in America including Stanford Medicine and Goshen Health System and is proving to not only save hospitals but also increase positive patient outcomes (Dunn, 2009). The new model of health care demands new thinking and new processes, performance excellence is at the forefront of this new era of hospital operations.

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References

Centers for Medicare and Medicaid Services (2016). Bundled payments for care improvement, BPCI initiative general information. Retrieved from www.cms.gov March 31, 2016.

Dunn, L. (2009). 5 key principles for hospitals from Toyota’s lean production system. Becker’s Hospital Review. September 17, 2009.

Galvan, P. (2005) Reducing waste in healthcare. Health Affairs December 12, 2013.

Goodman, L., & Norbeck, T., (2013). Who’s to blame for our rising health care costs? Forbes, April 3 2013.

Klein, E. (2013). This is why controlling health care costs is almost impossible. The Washington Post. August 21,2013

Stanford Health Care (2016). SOS training for medstaff leaders. Retrieved from www.shc.org April 2, 2016.