1. ISE 468 ETM 568 Healthcare Process Improvement
Value Stream Management for Lean Healthcare Tapping, Kowolski, Archbold, & Sperl Lecture 1
ISE 468 ETM 568
Healthcare Process Improvement

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
Spring 2017
ISE 468 ETM Dr. Burtner

3. The Healthcare Crisis – Costs 2
Insurances (Private and Government)
Facility overhead
Majority of hospitals 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
Spring 2017
ISE 468 ETM 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
Spring 2017
ISE 468 ETM 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
Spring 2017
ISE 468 ETM 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
Spring 2017
ISE 468 ETM 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???
Spring 2017
ISE 468 ETM 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
Spring 2017
ISE 468 ETM 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
Spring 2017
ISE 468 ETM 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
Spring 2017
ISE 468 ETM 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
Spring 2017
ISE 468 ETM 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.
Spring 2017
ISE 468 ETM Dr. Burtner