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Process improvement in HealthcareThe need for process improvement
1. Costs are rising
2. Growth rate is less than economic growth rate
3. Strongest growth in child daycare, care for elderly and general practitioner
4. What about population growth?
5. What is causing a need for process improvement in healthcare?
Some explanations…
1. Double ageing of our population: elderly become older and there will be more elderly
people (more complex care).
2. Our welfare increases and we demand better care
3. Medical-technological developments: new treatments and medicines are expensive, or
sometimes cheaper but become more widely available
4. There is no natural limit to the amount of care we demand or consume, a limit must be
government enforced.
Part of the solution is:
• Government policy
− Legislation for pharmaceutical industry
− Focus on prevention instead of care
− Etc.
• Medical science and innovation
− Technology (e.g. robots and algorithms)
− Cheaper and more effective treatments and medicines
− Etc.
• Medical (operations) management
− Value based healthcare delivery (output)
− Optimize process in healthcare (throughput)
Medical operations management
Juran’s definitions of quality:
− Features: typically cost more
− Freedom from deficiencies: typically cost less
Summery
There are many solutions for optimizing the Healthcare systems. We focus on medical
operations management
There is a fundamental difference between quality of design and delivery
There are many examples of LSS projects implemented in several Healthcare environments
1
,Introduction to Lean Six Sigma
Six Sigma: managerial and methodological framework for organizing continuous improvement in
organizations.
Lean Six Sigma projects focus on improvement of routine processes:
- Manufacturing
- Service delivery
- Sales
- Transactional
Complete methodology:
- Management and organizational structures
- Methodology for projects (DMAIC method)
- Tools and techniques
Six Sigma
1978: Start of Six Sigma initiative at Motorola. (Bill Smith)
1995: General Electric adopts Six Sigma. (Jack Welch)
2019: “Six Sigma” 163 million hits in Google
Lean Thinking
1948 - 1975: Development of the Toyota Production System (TPS).
1988: John Krafcik introduced the term “Lean” when analyzing TPS in his
paper: Triumph of the Lean Production System.
2021: “Lean”: 423 million hits in Google
Toyota and other Japanese companies
- Collection of best practices
- Mainly aimed at process flow, throughput time and inefficiencies.
- Countless companies have adopted Lean Thinking ever since.
Lean Six Sigma balance
Lean six sigma & modern industry
Our current prosperity is based in the dramatic increases in quality and efficiency of the 20th and
21st century.
1900-1980: mass fabrication
- Economies of scale
- Standardization
- Managing large organizations
1980-2000: total quality management
2
, - Quality and manufacturing virtuosity as strategic weapon
- Flexibility, service level, reliability, lean
→ cheap, dependable processes.
Process: a series of actions or steps taken in order to make a product or deliver a service.
The hidden factory
Costs of poor quality
Every organization is a collection of processes. They have a need for improvement to:
- Withstand competition
- Adapt to higher customer expectations
- Technological innovations
Examples:
1. Industry – more medicine capsules per hour
2. Healthcare – decrease occurrence of medical errors
3. Services – increase customer satisfaction by lower waiting times
Lean Six Sigma is a way to realize improvement. Data is important in process improvement to:
- Find biggest problems
- Diagnose current process
- Investigate effect of improvements
Four functions in process management
3
, The effect of complexity
Lean Six Sigma from a strategic perspective
Investments: Lean Six Sigma organizations invest in training, time and effort. Organization-wide, BBs
and GBs are trained and disengaged to work on improvement projects.
Benefits: Company-wide improvement projects result in bottom-line and strategic benefits:
1. Superior cost-structure.
2. Competitive advantages derived from customer satisfaction.
3. Competence building in continuous improvement, company-wide local innovation and data-
based management.
Five process performance objectives:
1. Quality: defects, features, courteousness, attractive looks, …
2. Reliability and dependability: Failure-free processing, one-time processing, keeping promises,
no cancellations, punctuality, …
3. Speed: Throughput times, waiting times, …
4. Flexibility: Ability to adjust to changing demand (fluctuations in work-load, variation in
product or service types, number of options, …)
5. Cost: personnel costs, materials, facilities.
Value proposition: strategic benefits
You have to be good on all performance dimensions, but some dimensions imply a trade-off. There
are many ways to be the best: the efficient frontier.
Strategic focus is about deciding in which dimensions you want to
excel, and which dimensions you may compromise in order to excel
where it counts.
Companies A and B are both efficient, although they make different
strategic choices.
Company C is outcompeted: clients aiming for low price will choose A,
while clients aiming for high speed will choose B.
Note that this efficient frontier is pushed outward continuously; companies cannot afford to fall
behind in this race.
Lean Six Sigma helps in reaching and staying on the efficient frontier and helps in understanding
strategic trade-offs.
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