Healthcare News & Insights

Hospitals find assembly-line approach saves money; improves outcomes

Some hospitals are finding that adopting a manufacturer’s approach to streamlining can benefit both patients and the bottom line.

While a factory-style approach to efficiency may seem like the worst thing that could happen to the quality of patient care, the opposite is true.

Hospitals that have adopted continuous improvement programs like those used by manufacturers have found they’ve improved both their bottom lines and the level of care patients receive.

Seattle Children’s Hospital has adapted kaizan, a Japanese theory of business management, to continually make small adjustments that reduce waste and create a better experience for patients. It’s working.

For example, the hospital reorganized the stock room so that there are two constantly rotating bins of supplies. When one is empty, it’s sent to the central supply, where a scan of the bins bar code automatically orders replacements and nurses use the “back-up” bin. The increased efficiency allowed the hospital to cut its stockroom size in half. It also reduced waste, since there are fewer expired or outdated supplies that need to be tossed.

Between that and a number of other, equally small changes, the hospital has seen significant gains. In the past year, Seattle Children’s reduced its costs per patient by 3.7%, saving $23 million. The increased efficiency also allowed the hospital to serve more patients without incurring capital expenses to expand.

In another example, Akron Children’s Hospital spent $20,000 to streamline the sterilization process for surgical instruments and handle more operations each year. While the upfront cost might seem steep, it saved the hospital from spending another $3.5 million to expand the department.

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