These days, it's all about efficiency - driving fuel-efficient cars, utilizing "green," recyclable products, and developing business practices that ensure the highest quality product at the lowest possible price. Some companies, however, have taken this trend one step further and have incorporated efficiency-driven approaches into their practices. Welcome to the advent of "Lean Thinking."

Coined in the ’90s by Massachusetts Institute of Technology professors who studied Toyota Motor Company’s successful company practices, “Lean” is now the hottest buzzword in business. So what does it exactly entail? In a phrase, process improvement. Lean organizations teach employees how to identify unnecessary procedures and use problem-solving tools to improve their job performances.

Guided by a master sensei (aka: the lean management coach), students of lean thinking also learn improvement projects and self-assessment techniques. For businesses, this popular philosophy has led to significantly improved bottom lines and a drastic reduction in the number of errors. And, given the current push to do more with less, today’s economic woes only reinforce the importance of this methodology. But, despite all the accolades it’s receiving in other sectors, it’s the healthcare industry that is arguably reaping the greatest benefits from lean thinking.

Lean Healthcare
Regardless of where you stand on the health reform debate, one fact remains: It’s a big issue. After all, according to the U.S. Department of Health and Human Services, national health expenditure exceeded $2.1 trillion in 2006, more than 16 percent of the nation’s gross domestic product. What’s more, according to the Commonwealth Fund’s scorecard, the U.S. failed to keep up with medical improvements made in other countries, ranking last among 19 industrialized nations regarding the number of preventable premature deaths. Suffice it to say that any improvements in the U.S. healthcare system could have dramatic implications for the patients at its mercy.

Enter: Lean thinking. Although healing patients seems worlds apart from manufacturing Toyotas, the two objectives have more in common than you may think. For one thing, both practices seek to eliminate waste and reduce errors without sacrificing quality. After all, says Simpler Consulting CEO Marc Hafer, “Many health systems are seeking ways to reduce spending and costs; while this is essential for survival of the organization, patients and organization members may be adversely impacted by indiscriminate cost-cutting.”

More specifically, Hafer says, there are eight primary wastes in healthcare:

Overproducing: Making or spending too much time on something that doesn’t add value to the customer (patient)
Waiting: Idle time when no value is being added to a process
Transportation: Delays in moving materials or unnecessary handling of patients, staff or materials
Inventory: Capital investments, stock or corresponding control systems that don’t yield profits
Unnecessary motions: Movement of people or equipment that don’t add value to a process
Processing waste: Work carried out on the wrong machine(s) or the execution of the wrong procedure
Defects: Wasted effort on inspection or work that was already completed
Unused human potential: Using problem-solving skills that fail to add value to the patient or staff

To combat this, Simpler Consulting has developed the Simpler Business System®, which coaches healthcare facilities on how to employ lean methods. “With its patient-centric approach, the Simpler Business System helps to identify technology and software solutions that deal with the elimination of non-value-adding work,” Hafer says. Therefore, “Lean-thinking healthcare organizations are patient-centric organizations that relentlessly define value in the eyes of their patients – not clinicians – and seek to identify and eliminate wasteful work elements from every aspect of their enterprise, both clinical and nonclinical.”

Two organizations that fall into this category are ThedaCare’s New London Family Medical Center and Theda Clark Medical Center. Not only do these Wisconsin-based hospitals belong to the same health system, they’re also both beneficiaries of the Simpler Business System. And it’s their joint implementation of lean management that has made these healthcare facilities succeed when so many others have failed.

Modern-Day Success Stories
Simply put, it was time for a change. After witnessing the successful deployment of lean management at several of its sister facilities, New London Family Medical Center was ready to take the plunge. The department that would serve as the proverbial guinea pig? The OR.

According to Kandi Schlueter, the manager of surgical services at New London Family Medical Center, the goal regarding lean was twofold: to improve the quality of care for patients and to help maximize the staff’s time by streamlining processes. Five years later, these objectives have been more than met. However, Schlueter says, they required the effort of the entire department.

“The OR department began a series of rapid improvement events that would help physicians, nurses and staff eliminate the waste in their daily tasks,” she explains. “In a rapid improvement event, the sensei leads selected members of the OR department, administration and patients in an intensive forum where new ideas on how to eliminate waste are trailed and implemented.”

First up: Supply management. With the guidance of Simpler Consulting, Schlueter’s department implemented a Kanban, “just-in-time” (JIT) system. An inventory strategy that attempts to increase a company’s return on investment by diminishing in-process inventory – surgical supplies, in their case – JIT can drastically improve supply management. And it certainly did for New London Family Medical Center.

The OR department also sought to improve equipment storage practices. Before implementing lean management, the hospital’s surgical equipment room was so cluttered that finding necessary tools became a daunting task. Not anymore. Under the tutelage of Simpler Consulting senseis, members of the OR department reorganized their supplies in labeled, shadowed boxes with pictures depicting their contents. That way, when a nurse or surgeon needs to locate a tool, they’ll be able to find it immediately. Not surprisingly, Schlueter says, “The staff is thrilled.”

ThedaCare’s Theda Clark Medical Center enjoyed similar results. Like New London Family Medical Center, one of the main issues Theda Clark focused on was on-time starts. After all, according to Sanjay Cheulkar, MHSA, manager of the hospital’s surgical business unit, this was a major problem area. “In 2008, 50 percent of Aylward Surgical Center and 38 percent of Theda Clark Main OR first-surgery-of-the-day cases scheduled prior to 9 a.m. started within five minutes of the scheduled start time,” he explains. “These late starts cause delays for the rest of day, resulting in extra staffing costs, decreased productivity, and physician, staff, patient and family dissatisfaction.”

Thanks to the effectiveness of lean management, this problem has greatly subsided. “By implementing lean management, we were able to identify areas of improvement and take steps toward improvement,” says Cheulkar. What’s more, “by standardizing work, mortifying modifying shifts, and better communicating the value of on-time starts to our team, we saw a more than 25 percent improvement in on-time starts at Aylward Surgical Center and more than 20 percent improvement at Theda Clark.”

To Hafer, these success stories only reinforce the value of lean management. Not only can this business philosophy streamline medical processes and eliminate waste, it can also save hospitals a significant amount of money. In fact, he says, “Forward-thinking health systems that have made a long-term commitment to work with a lean management consulting group are better positioned to weather the downturn in the economy.” However, he warns, “Healthcare executives who are interested in learning more about lean management should realize that it isn’t a quick fix; it’s a system-wide transformation.”