Transforming your healthcare organization into one that fully utilizes the Lean concepts and tools takes time. Many experts estimate that this Lean Healthcare ‘journey’ will lead to truly tangible results only after as much as 3 years of dedicated, transformation effort! Now the ‘good news’! I believe that the much anticipated changes associated with the proposed U.S. healthcare reform effort offer a perhaps “once in a lifetime opportunity” to create a clear case for major change in any healthcare organization that counts on government reimbursement as a major element of their revenue stream. If you are familiar with change management, you’ll remember that one basic element of change management is the need to identify and articulate, as clearly and forcefully as possible, the need to ‘do something different’ in order to assure survival.  Since it has never been very likely that U.S. healthcare services would ever be ‘outsourced’ to Mexico, finding a rationale for the absolute necessity to get better at improve the levels of healthcare quality and service have been few and far between!

Why now?  As I have consistently read the multitude of commentaries on pending healthcare reform, I have picked up on a few common threads:

  1. Our government leaders have clearly focused the coming legislation on increasing the accessibility of health insurance, including that available from both government and non-government sources. Most reviews of the current healthcare reform proposals focus nearly exclusively on how many additional people will be insured through each of the various options. An additional 30 million insured healthcare consumers through these reforms seems like a popular estimate.
  2.  The ‘quid pro quo’ of expanding the pool of insured people in the U.S. (and significantly increasing the demand for healthcare services) appears to be a long term series of big time price concessions (something like $150 billion, that’s billion with a ‘B’) via reduced government reimbursements, over the next 10 years. I’ve read that this represents about $2.7 million in annual concessions per hospital!

There you have it! The typical U.S. hospital will see significantly higher demand for services but receive less reimbursement for government paid for care; a true ‘burning platform’ for working smarter not harder! The proposition of providing more of something and getting paid less for it easily registers as a bad strategy for long term success!

Lean healthcare leaders, don’t let this opportunity to clearly state the need for change go by without capitalizing on it in your organization! Three years of effort is a formidable investment but if not now, when?

This week’s blog was written by HPP consultant and engineer David Krebs.  David, a Six Sigma certified engineer, oversees various HPP projects and Lean Healthcare transformations for clients throughout the USA. David is also a Licensed Professional Engineer in the state of Tennessee, with over 30 years of experience in a variety of process and systems intensive industries, as part of firms in the U.S, Germany, and France.  David has achieved and maintained QS-9000 and ISO-14001 certification & received Nissans’ “Quality Master Award” on three occasions.  He holds a Bachelor of Science degree in Mechanical Engineering from the University of Detroit & an MBA from the University of Notre Dame.