Effective Healthcare System: Lean Principles in Healthcare Management

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Introduction

Every country that intends to improve the welfare of its populace must have an effective healthcare system. This is because the healthcare sector provides services that not only save thousands of lives, but also prevent illnesses that might adversely affect the public.

Despite its importance, the healthcare sector in most countries is ineffective due to wastages, poor management, and lack of resources. In response to these weaknesses, most countries are adopting lean management principles to improve the efficiency of their healthcare systems.

The main objectives of lean principles are to maximize value and to reduce waste. The process of introducing lean principles must be led by the top management so that lean thinking can be adopted in the entire organization. A lean culture helps in implementing the changes associated with lean thinking.

This paper focuses on the application of lean principles in the healthcare sector. The thesis that it will support states that lean principles are the optimum solution to the impending healthcare management issues.

The paper will begin with a definition of lean principles. This will be followed by a discussion of the effectiveness of lean principles. Finally, the changes that should be made in the healthcare system will be discussed.

Definition of Lean Principles

Lean principles are a set of strategies or steps that aim at maximizing customer value and reducing wastes simultaneously. Generally, using these principles involves “creating more value for customers with fewer resources”. A lean healthcare system must recognize customer value and channel its resources towards improving it.

The objective of the system should be to provide perfect value to patients and other stakeholders through a process that eliminates wastes. This objective can be achieved through lean thinking that enables leaders in the healthcare sector to optimize the flow of services through value streams.

Healthcare organizations such as hospitals can develop processes that require less human effort, time, space, and capital by reducing wastes along their value streams. In this regard, managers should focus on three aspects of creating value namely, people, process, and purpose.

Purpose refers to the patients’ needs that must be satisfied. People refer to the individuals who are responsible for serving the patients. Process refers to the methodology of delivering customer value.

Effectiveness of Lean Principles

Lean principles can improve the performance of the healthcare system through the following ways. First, it enables organizations to focus on customers and their needs. In the healthcare sector, patients are the main customers whose needs must be satisfied.

In a lean healthcare system, managers, doctors, and nurses must define value from the patient’s perspective. Concisely, all procedures and strategies that facilitate treatment of patients should be considered as value-adding processes.

Thus, processes that do not contribute to the treatment of patients are wastes that should be eliminated. This distinction provides a clear framework for redesigning healthcare services and process in order to improve efficiency. By eliminating processes that do not add value to patients, a significant amount of resources can be saved.

Second, lean thinking calls for the use of a pull system. Under a lean system, medical services are provided according to existing demand. There must be no provision of less or extra services. Delivering healthcare according to effective demand implies that the sole objective of providing medical services is to satisfy patients’ needs.

Consequently, the services should not be provided to meet artificial metrics such as productivity, and capacity utilization. The pull system also requires medical personnel to channel resources towards the task at hand and when needed. Consequently, resources should not be used before or after a treatment procedure.

The benefit of the pull system is that it eliminates wastes associated with overproduction, waiting, defects, and transportation. For instance, eliminating early prescriptions will help in reducing misuse of pills, medical errors, and duplication of tests.

Third, lean thinking enhances effective workflow. The pull system enables medical personnel to provide services through units that consist of specialized staff. Each patient is served by one unit at a time, thereby eliminating waiting time.

In this regard, the objective of lean thinking is to eliminate bottlenecks that cause delays in the healthcare sector. This can be achieved by adopting effective inventory management systems that facilitates orderly flow of materials such as medical equipment and drugs.

Furthermore, workstations can be redesigned in a manner that facilitates sharing of equipment and consultations among medical personnel. Visual controls can help medical personnel to adapt easily to any work environment. This is because they facilitate quick understanding of the workplace in terms of the workflow, available inventory, and the needs of the patients.

The benefit of using visual controls is that they are efficient, self-regulating and can be used in nearly all departments in hospitals.

Doctors usually waste a lot of time as they move from one place to another in order to access materials, patients, and medical equipment. According to lean principles, unnecessary movements should be avoided since they lead to time wastage.

Fourth, management of the value streams as an integrated whole facilitates effective workflow. In this case, managers must take into account the interdependencies between value streams in order to avoid duplication of responsibilities and delays.

Values streams are often improved through total productive maintenance (TPM). This involves using proactive and progressive maintenance techniques to sustain efficient operations. The benefit of this strategy is that it eliminates breakdowns and downtime.

It also promotes capacity optimization, thereby allowing healthcare facilities to serve more customers. Significant cost savings can be achieved through proper maintenance of existing facilities and equipment. In addition, hospitals will require less time to serve customers if they have well maintained equipment and facilities.

Finally, lean thinking aims at improving service quality. In most countries, the quality of medical services is one of the major factors that are used to measure the effectiveness of the healthcare system. Generally, a lean healthcare system must be able to offer high quality services at low costs.

This can be achieved by developing clear and standardized processes that facilitate continuous improvement. This enables the healthcare system to adjust to emerging customer needs in time. It also provides an opportunity for evaluating existing processes on a regular basis in order to take timely remedial actions.

Excellent services can be provided with the aid of total quality management systems (TQM). This system involves improving the operations of all sectors of the healthcare system in order to increase efficiency. In addition, every aspect of delivering services to patients must meet the desired expectations.

The importance of total quality management is that it encourages process and product innovation. Concisely, it encourages medical personnel and managers to try alternative methods that enable them to provide high quality services and low costs. The resulting improvement in efficiency boosts the competitiveness of healthcare organizations.

Changes that should be made in the Healthcare System

Introducing lean principles must be supported by significant changes in the entire healthcare sector. In particular, the changes should aim at transforming the sub-sectors and the institutions that are characterized by wastage of scarce resources. Some of the sectors that should be changed include the following.

The Insurance Industry

The insurance industry is important in the healthcare system since it helps citizens to pay for medical services. The objective of health insurance is to reduce the cost of accessing medical services. However, this objective is yet to be achieved in America due to the convoluted nature of its insurance industry.

One of the problems affecting the insurance industry in America is poor claims processing procedures. Most insurance companies often fail to transfer payments to hospitals due to various reasons. In order to prevent losses, insurance companies have to verify each claim before making any payment.

Consequently, they have to hire utilization review professionals whose responsibility is to handle claims. This increases the cost of providing health insurance to the public. In response to the rising operating costs, insurance companies have had to increase premiums, thereby reducing access to health insurance.

Apart from increasing the cost of health insurance, the complications associated with processing claims increases waiting time. In some cases, patients and doctors can wait for several weeks in order to receive payment. By delaying payments, insurance companies limit the availability of funds that can be used to serve patients.

Research indicates that doctors in the United States spend nearly 10 times the amount of time and money spent by their Canadian counterparts to access payments from insurance companies. This explains the high cost of accessing medical services in America.

America’s healthcare system incurs additional costs, which are as high as $28 billion annually. These wastages can be eliminated by incorporating lean principles in the insurance industry. The objective of lean thinking in the insurance industry should be to reduce the amount of time that is needed to pay claims.

Through a pull system, insurance companies and hospitals can share information that is necessary to process claims in time. In addition, efficiency can be improved by replacing the current fragmented system with a single pay insurance system. This will eliminate the wastes associated with the payment of premiums and claims in the insurance industry.

Pharmaceutical Industry

The pharmaceutical industry is an integral part of the healthcare system since it is concerned with the production and distribution of the drugs that are used to treat patients. Nonetheless, the industry is characterized by high inefficiency, which threatens its survival.

Americans waste a lot of financial resources annually due to irresponsible utilization of medicinal drugs. Concisely, Americans waste as much as $170 billion per year due to the manner in which they use medication. This amount of money is more than enough to provide health insurance to all uninsured Americans.

This waste is attributed to several factors. To begin with, most Americans purchase drugs from local pharmacies rather than through mail. Generally, visiting local pharmacies is expensive due to transportation costs. Most Americans prefer well-established brands of various drugs to generic ones.

It is apparent that generic medication is often cheaper than the original ones. However, in most cases the generic drugs have the same medicinal value as the original ones. Overproduction of drugs usually ties up funds that could be used to develop other sectors of the healthcare system.

Negligence and poor storage systems normally lead to medical errors such as drug contamination and wrong prescriptions. Moreover, some patients fail to comply with the regulations associated with the use of certain drugs.

These circumstances lead to misuse of medicinal drugs. Establishing a lean pharmaceutical industry will help the country to reduce these wastages. Lean thinking will help the healthcare sector to control the use of drugs in order to reduce operating costs.

Implementing Lean Principles

Lean principles can be implemented in the healthcare sectors with the aid of advanced technology, effective time management, and availability of the information that facilitates delivery of healthcare. These factors can be explained as follows.

The Role of Technology

Technology is an important aspect of lean thinking because it facilitates delivery of services that create value for customers. Technology can enable healthcare providers to automate various processes, thereby improving efficiency.

In this regard, advanced technology can help the healthcare sector to eliminate waste in the following ways. First, hospitals have to manage a lot of records concerning patients’ health information, supplies, treatment procedures, and medical research among others.

Consequently, most hospitals have adopted modern information and communication technologies (IT) to manage their records. However, these technologies often add little value because they create a lot of wastes. In response to this weakness, lean IT should be adopted in the healthcare sector.

Lean IT aims at reducing the wastes associated with ineffective software, underutilization of computer hardware, and poor management of information among others. Effective use of lean IT will enable hospitals to manage records in a cost-effective manner and to access information in real time.

This will reduce the amount of time that is required to deliver services, thereby allowing doctors to serve more patients. Second, lean IT can be used to provide online prescriptions. Concisely, it can enable patients to access basic health information from physicians and to purchase drugs through the internet.

This involves introducing e-commerce in the healthcare sector in order to eliminate the wastes associated with paper-based transactions, as well as, the time spent to visit pharmacies and hospitals. Third, lean manufacturing technologies should be introduced in the pharmaceutical industry in order to eliminate wastes.

Introducing lean principles will help in reducing the wastes associated with overproduction, delays in order processing, and managing inventory among others.

Availability of Information

The resource constraints in the healthcare sector can be reduced if individuals take control of their health. Maintaining a healthy lifestyle is one of the best ways of preventing various diseases. This strategy reduces the number of people who require medical attention, thereby reducing the cost of delivering healthcare.

Individuals can maintain a healthy lifestyle if they have access to health information. Thus, leaders in the healthcare sector should collaborate with the ministry of health in order to provide adequate health information to the public.

For instance, healthcare institutions can focus on research concerning various diseases, whereas the ministry can concentrate on disseminating the findings. The importance of collaboration is that it facilitates sharing of resources.

The ministry can provide health information through educational programs that encourage citizens to maintain healthy lifestyles. For instance, citizens can be sensitized on the need to go for regular medical checkups in order to avoid chronic health conditions.

Early diagnosis can facilitate treatment of certain terminal diseases, which are often very expensive to manage. In America, chronic illnesses such as cancer and stroke account for nearly half of deaths. This is because most citizens are reluctant to change their lifestyles in order to avoid chronic illnesses.

The country spends billions of dollars every year to manage chronic illnesses, which can be easily avoided by the public. In this regard, the wastes associated with managing these diseases can be eliminated by supplying lean healthcare.

Concisely, lean thinking will enable the citizens to change their attitudes towards their health. A positive attitude towards health will encourage responsible behaviors among citizens. The resulting reduction in cases of illnesses will lower the cost of delivering healthcare.

Doctors

Doctors need lean principles in order to manage their time effectively. This will help them to avoid treating their patients at the last minute. In this case, doctors will have ample time to treat patients, thereby eliminating chances of medical errors such as wrong diagnosis.

Avoiding medical errors improves health outcomes. Patients who are given the right medication are likely to recover fully within a short time. Additionally, the rate of readmitting patients is likely to reduce. Consequently, patients will not incur extra costs to access medical services.

Doctors should also change their attitudes towards resource utilization. Most doctors strive to save patients’ lives by utilizing all available resources. However, this strategy can lead to wasteful utilization of resources, especially, if the patient has little or no chance of recovering.

Conclusion

The thesis statement that has been supported in this paper is that lean principles are the optimum solution to the impending healthcare management issues. Lean thinking improves customer value and reduces wastes. In the healthcare sector, lean principles enable medical personnel to focus on patients in order to offer excellent medical services.

It also focuses on reducing wastes by facilitating efficient use of resources and workflow, as well as, continuous improvement of existing services and processes. Lean principles should also be introduced in the insurance and pharmaceutical industries in order to reduce wastes.

Generally, advanced technology, effective time management and availability of information is necessary for the implementation of lean principles in the healthcare sector. Lean principles enhance efficiency, as well as, productivity by reducing wastes and improving service quality.

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