2.10 Lean business principles



10.1055/b-0038-164265

2.10 Lean business principles

Stephen L Kates, Andrew J Pugely

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1 Introduction


There are multiple clinical and health system models of care pertaining to orthogeriatric care. Guisti et al [1] described five distinct organizational models in their landmark paper (see chapter 2.1 Models of orthogeriatric care for a summary and discussion of these models). However, from a business model standpoint, there are only three models to discuss. These include “craft production”, semiorganized care using “mass production” principles, and highly organized care using “lean business principles”. These three business models derive from the automotive industry and can be applied within a medical care context.


With the use of lean business methods, considerable improvement in program outcomes can be achieved. The dual goals of quality improvement and cost saving are achievable and more cost-effective care can be delivered [2]. Lean business methods are a win for the institution, patients, and healthcare teams. This chapter is designed to discuss the use of business modeling and its role in care improvement.



2 Models from the automotive industry



2.1 Craft production


Before 1911, all manufacturing of cars and other goods and services used craft production principles. Craft production was dependent on the skills of the individual craftsman. Supplies were purchased in a disorganized manner and were variable. The manufacturing process was done one at a time, and there were no standards applied to each car. There was no standard quality management program and each product was different. The results were thus variable even for skilled craftsmen.



2.2 Mass production


Mass production began in 1911 with Henry Ford′s introduction of interchangeable parts. In 1914, Ford introduced the moving assembly line and focused routinely on reducing waste in the manufacturing process by prescribing standard work and the use of recycled defective steel parts. Ford standardized the size of the boards composing the wooden shipping crates including where the drill holes were made. When emptied, the crates were disassembled at the factory and became the floorboards of the Model T car. He actually reduced the price of the vehicle every year, passing on the realized savings to the customers.


However, about 25% of the cars would not start and run properly at the end of the assembly line and required reworking from the “craftsmen” he employed to correct the defects. Mass production quality control efforts often failed to determine the true root cause of an error, thus the error was repeated over and over again. Despite its shortcomings, mass production was a tremendous success and mass production principles greatly increased output of all factories employing the principles.



2.3 Lean production


Lean production began in postwar Japan with the Toyoda family, their engineer Taiichi Ohno, and Dr W Edwards Deming who was serving in MacArthur′s army of occupation. In 1950, no cars were produced in Japan, but the Toyoda family and Ohno, with the help of Deming, developed new manufacturing principles now known as lean production [3].


In lean production, the space used for manufacturing was less, changeover times were relentlessly reduced, the quality of the parts and cars dramatically improved, and the costs of production fell as a result. Concepts such as just-in-time delivery of parts and poka-yoke, ie, error-proofing, were introduced.


The supply chain was managed by an inventory-control system (kanban), involving signaling cards to indicate the need to replenish parts as they were used, which was combined with just-in-time delivery of the parts to the assembly line. The assembly line was “production leveled” (heijunka) by sequencing the models of car built by their complexity and components. At the end of the line, all of the cars started and ran, and could be immediately transported to the freighter for shipping to their intended destination. Quality was improved continuously using the Deming cycles of plan-do-check-act (PDCA) and use of frequent “improvements” (kaizens) to solve problems encountered in the manufacturing process. By the late 1990s, Toyota became the number one manufacturer of cars in the world.



3 Where are we now and what is value in healthcare?


Based on the business models described above, orthogeriatric care is usually delivered in a craft production mode with some mass production features such as a quality management system, a supply chain, and a large volume of cases managed in some centers. Typical care produces variable results including many readily avoidable adverse events such as medication errors, and poor sequencing of surgeries and consults, resulting in long delays, depletion of necessary supplies, avoidable infections, the ordering of unnecessary tests such as head CT scans and echocardiograms, and the list goes on.


If the reader is still not convinced, ask yourself the following question: If I needed urgent surgery on my fracture, would I like to choose my surgeon and care team? Most readers would answer “yes, definitely”. Because traditional fracture care is highly variable and unorganized, you surely want to choose your craftsman wisely. Of course this is highly inefficient and rarely possible in the urgent setting. As cost pressures mount on health systems around the world, there is an increasing need to improve quality of care at lower cost. Fortunately, there is often an inverse relationship between the costs of care and quality of care, ie, high-value care typically costs less. Health systems and patients are demanding better value care be delivered [4]. The value equation is [5]:


In most cases we know the costs. Typically, only outcomes as defined by “process measures” like length of stay, mortality rate, and infection rate are known but not the truly important patient-reported outcomes. Patient-reported outcomes are important to show if the care provided actually improved the patient′s health status. It is hard to have a true measure of value, but with time this issue will surely be corrected.



4 Implementation of lean business methods


Each episode of care for a fragility fracture can be broken down into a series of steps or processes. These processes, strung together, will encompass the flow of the patient through the health system during their care. Using lean business methods, these processes can be studied and improved repeatedly to improve the patient flow through the system, reduce errors, and improve patient satisfaction. This is called a value stream map [6]. To embark on such a journey, prerequisites such as the following are needed:




  • Support of hospital administration is essential.



  • Solid leadership from surgeon champion and medical champion [2] is required.



  • The care team should be involved and empowered so that any changes made will “stick”.



  • There must be an element of commitment among the care providers to understand that there are better ways to care for their patients.



  • Excellent communication around the lean practices is also essential with an emphasis that the idea is to improve patient care and provider satisfaction rather than to eliminate jobs.


Some programs will employ a team of consultants to assist them with the process of creating a value stream map; others employ a facilitator to help oversee the process. In all cases, employees must participate actively in lean processes to ensure a successful outcome. When starting to implement lean processes in a department, choosing a discrete diagnosis such as hip fracture is important so that the care team member can focus their efforts clearly.

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May 17, 2020 | Posted by in ORTHOPEDIC | Comments Off on 2.10 Lean business principles

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