Nemours Children’s Health System CEO David J. Bailey: Embrace lean management to supplement value-based care

Value-based care is key to creating better patient outcomes, but new payment models on their own aren’t enough.

Nemours Children’s Health System has found success by embracing alternative payment models in tandem with reducing waste and tackling the social determinants of health, writes CEO David J. Bailey, M.D., in an article for Harvard Business Review.

Relying on value-based care alone to improve quality and outcomes is unlikely to be effective, as the transition moves at an “uncertain tempo,” leaving providers with a mix of value-based payment models and more traditional fee-for-service patients.

"We believe that value-based care, implemented using lean principles and in conjunction with an ongoing, community-wide effort to address social determinants of health, can reduce health spending and deliver on the promise of better health, for children and for all," Bailey writes.

So in addition to piloting value-based programs, Nemours has spent five years cultivating a “lean methodology” to reduce waste and engage staff members on improvement strategies. Deploying a lean outlook has led to better outcomes and cost reductions, regardless of the payment model, according to Bailey.

For instance, Nemours has virtually eliminated preadmission testing, which has led to fewer procedure cancellations and higher patient satisfaction without significant delays to surgery start times. The savings from programs like this can be used to further fund value-based care and population health efforts, Bailey said.

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Lean management programs can decrease emergency wait times, as FierceHealthcare has reported. Lean methodologies empower staff to make decisions about quality improvement and can improve interactions with patients.

Private hospitals have long embraced lean strategies, and safety-net hospitals have followed suit. California hospitals have reduced clutter in supply closets to cut down on the time surgical teams spend looking for needed supplies, and have taken aim at reducing surgical cancellations.

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Waste in healthcare is extremely common, and can lead to a large amount of discarded supplies and unneeded tests—both of which cost hospitals money.