Making Hospital Employees Champions of Cost Reduction
Case Study Preview: The pressure has never been greater for hospitals to reduce operating costs without compromising standards of patient care. But the fast pace and high stress of the hospital workplace defies conventional application of Lean cost-reduction strategies better suited to manufacturing environments. Read how one integrated healthcare system has gone “Beyond Lean” by using an innovative team process to engage its frontline employees in cost reduction.
Carle Foundation Hospitals (the primary teaching hospital for the University of Illinois College of Medicine), like many of its peers, faces relentless pressure to reduce operating expenses while maintaining competitiveness and delivering the highest standards of patient care.
It’s a challenge made even more daunting in the face of reduced reimbursements, labor shortages, and the high-paced/high-stress healthcare provider work environment. A handful of leading hospitals have had moderate success deploying Lean and Six Sigma methods to improve efficiencies. However, many more have found the upfront training costs, additional staffing, significant off-the–job time requirements, and the lack of a cultural fit of these approaches to be difficult hurdles to clear.
Finding the Right Method for Broader Lean Deployment
Carle Foundation is the largest integrated healthcare services provider in the Urbana-Champaign area, and is an institution that has been committed throughout its long history to keeping pace with other top-tier healthcare institutions in all aspects of its operations. Continually striving for this goal, Beth Edrington, Director Internal Consulting and Performance Improvement, spearheaded the introduction of Lean to the hospital in hopes of streamlining core patient care processes like admissions, clinical practices, and discharge.
“We also recognized the urgent need to attack the large volume of support processes that happen behind the scenes in our hospital every day and impact both patient care and operating costs.”
But as Edrington explained, “While we had decided that our core patient care processes could improved by applying Lean, we recognized the urgent need to attack the large volume of support processes that happen behind the scenes in our hospital every day and impact both patient care and operating costs. However, we didn’t have the bandwidth or budget to simultaneously attack both opportunities with the classic Black Belt/Lean Sensei (full-time change agent) approach.”
Hospital support processes easily number in the hundreds, covering facilities management, supplies ordering and inventory management, workforce scheduling, performance reporting, equipment maintenance, hiring, and more. When out-of-control and wasteful in execution, any of these “behind the scenes” activities can have a huge impact on everything from patient care, throughput, operating costs, workforce productivity, and morale. But taking action on these “back stage” process improvement opportunities requires broad employee engagement and firm leadership commitment.
A Lean Engagement Method for the Frontlines
Carle Foundation found the answer to greater employee engagement with Rapid Action, Leap’s innovative small-team improvement method designed to complement Lean, Six Sigma and other expert-driven improvement initiatives. Rapid Action’s unique value-add: an “all in one” team engagement toolkit that makes it easier and less time-intensive to engage frontline hospital employees and supervisors in Lean “thinking and doing.”
Rapid Action integrates concepts from Action Workout (the fast-change method for harnessing collective wisdom, originally deployed at GE and later “productized” by Leap) with basic Lean and Six Sigma disciplines. Rapid Action teams are launched “just-in-time” with employees learning concepts and tools on a learn-as-you-implement basis. These teams of six to eight employees complete focused improvement assignments through structured, weekly meetings and individual assignments over a 60-day timeframe.
“Hospitals are busy places and Rapid Action, with its system of short team meetings, learn-you-go tools, and individual assignments, fit our requirements and constraints perfectly.”
According to Edrington, “I sensed immediately that Rapid Action could help us address more problems, engage more employees and complement our larger-scale, data intensive Lean projects. Hospitals are busy places and Rapid Action, with its system of short team meetings, learn-as-you-go tools, and individual assignments, fit our requirements and constraints perfectly.”
Overcoming Initial Skepticism for Frontline-Driven Cost Reduction
Initially, the decision to introduce Rapid Action Teams was not supported by all Carle leaders, particularly those already engaged in Lean projects. Common objections included statements such as:
- “We’ve already got Lean projects underway; this will add confusion.”
- “Our frontline employees won’t sign up for this.”
- “It’s too simplistic a solution for our world.”
The recommendation to start small and test for tangible results opened the door for launching four Rapid Action teams focused on the following improvement opportunities:
- Reducing agency nurse (externally supplied) costs
- Improving patient access to physical therapy services
- Reducing engineering and facilities maintenance costs
- Improving hiring and on-boarding process cycle-times
Rapid Action for Hospital Cost Reduction
4Teams deployed over 60 days
32Total olutions implemented
The cumulative financial gains generated by the pilot Rapid Action teams produced savings nearly six times the out-of-pocket costs associated with running the test. The success of the pilot teams and positive feedback from the participants paved the way for integrating Rapid Action into the hospital’s ongoing Lean deployment.
Carle Foundation has continued to deploy Rapid Action teams to address a wide array of problems, including patient fall prevention, nurse overtime hours, supply costs from surgical supplies, and services contracts. The impact is often dramatic, as demonstrated by a team of nurses who designed and implemented disciplined, yet “staff friendly” procedures to ensure nurses end their shifts on-time. The result: Savings of more than $500,000 in overtime costs on an annualized basis, a 50% reduction from the prior year.
Changing How Hospital Leaders Think about Cost Reduction
Carle Foundation Hospital’s experience with Rapid Action teams is not atypical. Many organizations have benefited by using methods such as Rapid Action to engage employees in cost-reduction as well as other continuous improvement initiatives.
“It all starts with a belief by leaders that their employees have something to contribute. The rest is just giving them a disciplined process to follow and supporting their ideas.”
However, reaping the benefits of this approach requires a shift in thinking from hospital leaders, best summed up by Carle Foundation COO, John Snyder: “It all starts with a belief by leaders that their employees have something to contribute. The rest is just giving them a disciplined process to follow and supporting their ideas.”
Learn more about the Rapid Action Toolkit
Are you interested in accelerating results and increasing engagement from your organization’s change management and continuous improvement initiatives? Take a look “inside the box” of the most reliable process available for rapid, team-based improvement.