July 24, 2012 |
Steff Deschenes, New Media Producer
Article by: Steff Deschenes
New Media Producer for Healthcare Finance News
With the financial pressures that healthcare
organizations are facing, many hospitals are using traditional cost cutting
methods to save money by looking at layoffs and staff reductions. Many more
hospitals, however, are finding ways to reduce costs through lean management
methods that don't require layoffs and can improve quality for patients.
"Lean is actually the best alternative to
layoffs. It's all about encouraging everyone to participate in process
improvement, as well as finding creative and interesting ways to save money for
a healthcare organization to avoid those unwanted traditional cost slashing
endeavors like layoffs," explains Mark Graban, a lean expert and author of
the book Hospital Kaizen. "Layoffs don't lead to long-term
cost reduction. And if you lay off people and don't fix any processes, you're
risking patient safety and quality. As a result, more and more healthcare
providers are looking at lean to break that cycle."
[See also: Reducing cost
through clinical redesign]
Graban has outlined seven different ways that lean
management can help reduce system cost.
1. Reduce "never events." A "never
event" includes falls, infections, erroneous amputations and other
small-to-large-scale disasters. Reducing these events is, of course, best for
patients, but there's also financial pressure to reduce never events. In 2009,
Medicare stopped paying for care from events they consider preventable, and now
private insurers are following suit. Pressure ulcers and bedsores, for example,
are viewed as preventable. They shouldn't happen if a good process is followed
– like patients being repositioned. Improving quality in general saves
hospitals more than layoffs since "never events" occur when an
understaffed hospital can't be attentive enough to a patient needs.
2. Supply chain improvements. It's important to
consider looking at a more effective material restocking process. For example,
more frequent smaller batch deliveries or rotating supplies more quickly
reduces both the amount of space used in internal warehouse and cash
tied-up in inventory.
3. Delay or cancel construction and
expansion. A trend in the last few years has shown that hospitals use lean to
increase capacity by using current equipment and available space. Lean makes
better use of existing resources as an alternative to increasing capital
spending. "I worked with one hospital that through process improvement to
patient flow – preventing delays from registration through to discharge – they
increased the utilization rates of their MRI machines from 40 percent to 60
percent. And they didn't need buy more equipment," said Graban.
4. Reduce overtime. Reducing overtime
is a great opportunity to help make improvements with lean that doesn't
alienate people the way layoffs do. Essentially, people want to get home to
have dinner with their families in a predictable/consistent way. If you can
improve charting during the process, for example, instead of having nurses do
it after, you can improve staff satisfaction while trimming down overtime,
which results in both morale and cost savings. It's a win-win opportunity.
5. Reduce length of stay. This certainly
isn't about pushing patients home before they're ready, Graban notes. Reducing
length of stay is done through preventing errors that would extend a stay or
delay a discharge when patients are medically ready to go home. Because of
miscommunication, poor planning, or when families or nursing homes aren't yet
ready to take on the person being discharged, a four-day stay can suddenly turn
into a five- or six-day stay. These process related things aren't medical
issues, but they often extend length of stay which can cost millions.
6. Reduce unnecessary testing and
diagnostics. A number of hospitals are trying to be responsible stewards of
healthcare dollars by reducing inappropriate usage of lab testing and
diagnostic imaging. For example, through medical evidence it's been shown that
when a patient comes in with back pain more often than not what they need is
physical therapy – not a fast pass to a CT scan, says Graban. ACOs help
organizations benefit from their own cost reduction efforts and will do so in a
way that doesn't shortchange what the patient needs.
7. Reduce delays and errors in billing. There are a
tremendous amount of delays in billing, including too many people involved
during different parts of the process. If there's a better flow, if people are
handing off the work to the next person in the chain immediately, bills go out
in a couple of days instead of a couple weeks. It's also incredibly important
to make sure billing is being done properly. If mistakes are made and proper
preauthorizations aren't followed, but procedures are done anyway, hospitals
might be voluntarily giving away revenue.
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