Saturday, July 17, 2010

Factory meets Hospital - Gain is just 2.3%?

July 17, 2010

New York Times had a great article on "Factory Efficiency Comes to the Hospital" talking about how the concepts that were perfected in the factories are helping hospitals to reduce cost and improve care at the same time rather than trading one for the other. Hospitals are utilizing concepts like Kanban, continuous learning, visual aids, standardization of processes, and checklists. Some of the hospitals are even putting out sharing events like what Dell used to put on to show case their processes and systems that drove their efficiency in the factory and in the supply chain.

It is a great article that talks about change management challenges and how the buy-in was achieved. What disappointed me was the results.
Last year, amid rising health care expenses nationally, [these techniques] helped cut Seattle Children’s costs per patient by 3.7 percent, for a total savings of $23 million

I would have thought that a lot more is possible. Either lot more was done but not captured here or a lot was left on the table. What do you think?

Karthik

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