8 kinds of waste driving healthcare costs

by | Sep 6, 2012

There’s a tremendous amount of waste occurring in the healthcare industry. In order to address that waste, organizations are moving to lean management because it exposes what and where these wastes are and rethinks the way work is done via value streams.

Most providers are set up by departments, or vertical silos. In the case of manufacturing, it’s products that traverse these departments, from receiving an order to collecting the money for it. In healthcare, what traverses departments are the patients.

Tracking patients horizontally through a healthcare value stream changes the way you think about what’s value-added and what’s not said Marc Hafer, author of the book Simpler Healthcare and CEO of Simpler, a firm globally dedicated to lean application, techniques and transformation in healthcare. “When you reconstruct patient flow through an experience at a clinic and you think horizontally… that’s when you see all the waste there really is,” he said.

Hafer shared with Healthcare Finance News the eight different types of waste that inhibit patient flow, add cost, increase poor quality and infection and decrease patient and clinician satisfaction. “When you remove waste, all these things change for the better,” remarked Hafer. “The value-added stream method is fundamental for patient flow in healthcare organizations.”

1. Transportation

Transportation is entirely non-value-added. “It contributes nothing to patient care. It adds to delays and increases likelihood there will be defects and dissatisfaction,” Hafer said. Transportation includes moving patients from one department to the next, shifting supplies and equipment and moving instruments from sterile processing areas to the OR and back again – and even when patients travel to and from the actual hospital itself.

2. Inventory

Inventory can include pharmaceuticals, supplies, and patients, too, if you consider a waiting room in a hospital. The replenishment system should be based on use as opposed to some forecast. “Only what’s needed when it’s needed is a good approach with inventory,” Hafer said.

3. Unnecessary motions

Reaching, bending, twisting, turning. These motions are all ergonomic issues abundant within healthcare. Clinicians are injured because processes like transporting a patient from wheelchairs to beds aren’t designed ergonomically. Staff takes time off for rehabilitation when unnecessary motions incapacitate them, which can result in a loss of productivity and enhance overall costs.

4. Waiting

“Patients waiting for treatments, clinicians waiting for supplies… as cliche as it sounds, time is money,” said Hafer. And sometimes it’s a matter of safety, too. There are some medications that need to be administered within a certain amount of time after a reaction or a procedure. Waiting can diminish the quality of the pharmaceutical and it’s effectiveness with the patient.

5. Overproducing

Overproducing is creating more of something than what’s exactly needed. Sending medications to a patient’s room that won’t be used because the patient has already been discharged is an example. Along the same vein, this type of miscommunication between departments can also extend a patient’s stay which is another form of overproduction. Other examples include repetition of diagnostic tests and the multiple registrations a patient has to endure when checking in. It’s a laborious, unnecessary process and one time should be sufficient enough.

6. Processing Waste

Creating reports that don’t get read or aren’t useful, administering duplicate tests – doing things where you produce 105 percent when you only needed to give 100 percent is processing waste, Hafer explained.

7. Defects

There are countless defects within healthcare situations, such as hospital-acquired infections, early discharges that lead to readmissions, incomplete medical records or instrument kits in the ER and inaccurate medical billing. In many circumstances, these defects are covered-up through reworks and work-arounds, Hafer said, but with lean management, a light is shed on these defects, the root cause is figured out and a countermeasure is put in place that won’t allow them to reoccur.

8. Unused human potential

With all the waste that already exists in healthcare, the last thing clinicians need to do is more non-value-added work, Hafer said, yet it happens all the time. Lean organizations involve people in redesigning work and real-time problem solving, Hafer explained, unleashing human talent on the right things to solve problems and reduce waste for patients.

From: Helathcare Finance News

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