Lean model saves hospital system millions

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How did the number one ranking academic medical center in patient survival save $46 million in financial benefits last year? Denver Health has committed to 400 rapid-improvement projects and attributes the resulting $135 million in financial benefits to Lean, an approach to reducing waste and inefficiency, Hospitals & Health Networks Daily reported.

In 2011, the hospital faced $450 million in uncompensated care, compared to $275 million in 2007. With a challenging financial situation, to say the least, the public hospital system credited its turnaround to Lean. Denver Health picked five areas to focus on in reducing waste, some in the short term and others in the long term: revenue cycle, community health, primary care, hospital flow and the operating room.

"We have shown that if you get rid of waste, not only is there a financial benefit, but there is a quality benefit," Patricia A. Gabow, CEO of Denver Health and Hospital Authority, said in the article. "To think that waste improves quality is incredibly difficult for me to understand."

Gabow said Denver Health has seen a 60 percent drop in expected mortality. Each value stream has an executive sponsor and a steering committee that meets monthly. Gabow also reviews metrics every month for these projects.

How can hospital executives get involved in Lean? Described as a "full contact sport that you can only learn by getting your hands dirty and 'doing it'," Marti Beltz, Six Sigma instructor for American Society for Quality and healthcare quality consultant, previously told FierceHealthcare that hospital leadership should examine daily management systems and constantly look for waste and variation to eliminate.

"Ultimately, the best way to prepare management for executive positions using Lean Six Sigma principles is to create a learn-by-doing environment and to model the approach as the existing leadership leave."

Even with best of intentions for system improvement, organizations might encounter physician resistance to Lean approaches, often seen as a waste of time and other resources. Beltz said the most compelling argument to get physicians to try Lean Six Sigma is to help them understand that when stripped down to its roots, Lean Six Sigma is based directly upon the scientific method. "If Lean Six Sigma is deployed correctly, [physicians] will see the value and will want to become a part of the equation," he explained.

For more information:
- read the H&HN Daily article
- here's the Lean Academy at Denver Health website
- check out the FierceHealthcare interview

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