What Toyota Can Teach The Healthcare Industry

from the lean-meat dept

The healthcare industry has all kinds of challenges ahead of it, but at the core of its problems is the matter of cost. If the industry were able to bring costs down across the board, many other problems would fall by the wayside. The Wall Street Journal has an interesting article about hospitals, and how they’re increasingly turning to experts from outside of the industry (via Evolving Excellence) to produce better results. In particular, hospitals are hiring manufacturing experts that are familiar with defect reduction and ‘just in time’ logistics. Naturally, there are some skeptics that don’t believe that a hospital is like a factory, and who feel that patients shouldn’t be treated like a widget on an assembly line. But it’s hard to imagine anything more anti-patient than a high defect rate coupled with long waiting periods. Changes in the healthcare industry have been hard to come by, in part because people don’t like to think of it as just another business. But in order to bring about change, providers will have to keep borrowing from what’s works elsewhere.

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Comments on “What Toyota Can Teach The Healthcare Industry”

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Ferin says:

An interesting idea

Having worked in clinical engineering at a major hospital, I can tell you that our facility did look into some of these initiatives. We attempted to run JIT with our pharmay and common patient equipment, and did a great deal of foolproffing and defect reduction exerices.

The idea certainly has merit, and having studied lean systems in college, I’ve been intrigued by it. The only caveat I would mention, based on my experience is that these initiatives have a tendency of going too far.

The biggest problem with lean is their relative fragility and lack of slack. The hospital enironment is unfortunately a terribly chaotic and rapidly changing one. Our facility more than once found itself on the wrong end of the guessing game about how much extra capacity in machines, workers, or supplies we would need. This was often not out of incompetence but the incredibly random nature of patient care. taking lean thinking too far could cripple many critical systems, such as ER’s, high risk surgical units, and emergency measures, that in the hospital system, tend to require a lot of wiggle room when it comes to a crisis.

Feetie says:

you cannot fix the problem till hospitals start running their business like a business…but the crying liberals will cry foul because we are talking about “lives” here.

you also cannot fix healthcare when its not ok for a hospital to be “for profit” while drug companies, insurance companies, medical supply companies, doctors all make insane profits.

Ferin says:

Re: Re:

Honestly, hospitals are mostly run as businesses. The problem is that they are also expected to provide an enormous number of services to the surrounding community that cost a huge amount of money.

There is not a single ER in the country, in my opinion, that will ever, under any circumstances, be able to operate profitably. the nature of the medical cases seen in these settings, the clientele they see, creates a system where money inherently gets flushed down the toilet quite often. Yet few people would dispassionately argue that hospitals should make the business sensible decision of dumping their emergency departments to reduce costs.

Your comment automatically assumes that hospitals are choosing to run themselves in an unefficient and fiscally irresponsible manner. I’ll be the first to admit that sort of thing does happen. If I had a dime for the number of times we had bite significant costs to stock some exotic part obody made for a machine that one doctor in the entire facility used, I’d be a rich man. But on the whole we do try to provide efficient care, and spend the money we have wisely.

My real point here is, look to the community around you and the rest of the health care system before assigning the entirety of the blame for fiscal problems on a hospital. Asking hospitals to behave like a business ignores the reality that communties and the current health care system expect them not to act that way.

Michael Long (profile) says:


I’m almost positive I don’t want my hospital stocking medicines and supplies in a ‘just in time’ logistical fashion. If a car or computer company comes up short part-wise the line simply pauses for a few hours, then starts up again.

Few critical care patients, however, can wait for a few hours for needed medicines or equipment.

And there’s always traffic accidents, train derailments, and industrial accidents that can spike things in a hurry.

dorpus says:

JIT Deaths

Informally, JIT already occurs in the health care industry. Hospital night shifts are run by inexperienced workers who want to keep deaths down. Night shift workers at hospitals have a saying, “Keep ’em alive until 7:05” (when the shift change happens). I manage a registry of state deaths, and yes, there is a dramatic drop in deaths reported in the 7am-8am time period (which then dramatically spikes afterwards). There’s also a dramatic spike in deaths at noon – 2pm, when doctors make their after-lunch rounds.

Men are most likely to die at 2pm, women are most likely to die at 11am. White boys who die at 8am are the most likely to have their organs harvested of any demographic group.

Old people are far more likely to die in the winter, while children die year-round. Girl babies tend to undergo Sudden Infant Death Syndrome in the winter, while boy babies tend to die all year round.

Can you tell I love my job?

Steve R. (profile) says:

Its the Bureaucracy (private health care system)

Ferin has made some really good comments.

My anecdotal opinion is that “money” has lost its economic meaning in the health care system. To explain, the health care system is funded through many individuals contributing to various health plans, these plans have many layers of bureaucracy to provide “oversight” and each layer takes its cut of the revenue stream. I often have wondered how much a doctor actually gets in net revenue for a patient office visit after factoring out the costs of malpractice insurance and the processing of medical claims. If medical insurance where to be abolished we might see a re-emergence of free market operations at hospitals. (A major problem of course, what happens when you have a catastrophic medical issue.)

dorpus says:

Re: Its the Bureaucracy (private health care syste

Oh, MD’s are not well off financially at all. The people who have the best deal, in terms of compensation vs. stress, are high school graduates. High school graduates who get jobs at hospitals can work their way up the system through a variety of back-door training certification programs. The people in the OR who perform surgery on you may all be high school graduates; sometimes, inexperienced MD’s who panic during surgery are even pushed aside by high school graduates who know what to do.

Jonathan26 (profile) says:


Skipping the image of organs flying overhead at midnight, this is one of the most sensible discussion threads I’ve seen in a while.
As an engineering and management professional, I am a big advocate of defect reduction efforts, focus on customer (read patient) requirements and outcomes. There are certainly some JIT efforts that would help hospitals, but as has been noted, it comes down to how responsive the JIT system is to spikes. Perhaps there is a balance between stock-’em-up and lean-and-mean. Perhaps some standardization would pay off.
Health care is one of the most difficult delivery systems I can imagine. I have had great experiences as well as the requisite number of frustrations with the system.

Ian (user link) says:

Lean thinking isn't all about manufacturing/JIT

I saw this a couple of years ago. The USAF Logistics Officer Association conference in Atlanta was wrapping up, and the next conference on the hotel’s agenda was something like “Lean in the Emergency Room.” Continuous process improvement, value stream mapping, and other techniques can be used to cut waste in just about any industry. The key (and probably most difficult part) is changing the culture of the organization.

Anonymous Coward says:


In particular, hospitals are hiring manufacturing experts that are familiar with defect reduction and ‘just in time’ logistics.

‘Just in time’ works by reducing the overhead of maintaining standing capacity. That is fine as along as you have a predictable, scheduled need of capacity. But, in the case of health care that would require that patients only get sick on a scheduled basis. Ones that get ‘unscheduled’ illness would then have to wait until there was a sufficient backlog of such cases to add an increment of capacity small enough to ensure that no capacity goes unused. The result would be waits so long that quality of life would be reduced and some would even die waiting. BUT, it would be EFFICIENT.

No, thanks.

bm says:

Is this really a "sensible" discussion

All I’ve seen is a lot of anecdotal hyperbole (h.s. grads shoving doctors away during operations) and wishful thinking. As for anecdotes, how about this one – hospital bills for surgery that somehow drop thousands of dollars after health plans say they’ll only pay $x, and still the patient gets billed the entire deductible.

The health care system sucks, unless you’re rich or in a public union. JIT supplies won’t fix that.

dorpus says:

Re: Is this really a "sensible" discussion

It’s not hyperbole. This stuff really happens. HS grads with such jobs command six-figure salaries, while intern and resident MD’s are free slave labor to hospitals. I’m a student-worker myself, so I’m paid a third of my market value in exchange for flexible work hours. Unlike HS grads in scrubs, I have to wear a tie to work, so dry cleaning costs eat up a significant portion of my salary.

Nor is there any of this “global competitiveness” nonsense at hospitals — high school graduates have lifetime employment, and rarely take the heat for malpractice. MD’s and student nurses are shown the door if they screw up more than once. There is no threat from foreign workers, since patients don’t want foreign idiots taking care of them. They are hired only as a last resort when there aren’t enough high school graduates.

Every law of economics that you can think of is turned upside down in the health care industry. Many business types have gone into the health care business thinking they can improve efficiency, but walked away frustrated. Countries that force the health care system to have low costs for patients suffer from lower quality treatment and severe personnel shortages.

dorpus says:

Make no Mistake

Health care jobs are not for everyone. Not everyone can deal with having AIDS patients vomit on their chest, or slowly scraping the burnt skin off of screaming children, or pulling glass shards out of the eyes of car accident victims, or telling parents that their child has been born with a severe birth defect. Nor is everyone up to the task of performing cervical exams of infant abuse victims, dealing with parents who go berserk, or criminal patients who grab the genitals of health care workers.

Stephen Goodfellow says:

JIT in the NHS

We can see that JIT works just by looking at other countries that have managed to implement it. The NHS saved billions when it switched to JIT, just through savings in all the stock it had piled up (and don’t forget, it costs huge amounts of money just to hold stock.

There haven’t been any problems with supply delivery, as the system they’ve set up is very robust.

The problem with a lot of these improvement schemes however is they often don’t go far enough. As has been mentioned, the key is changing the culture of the business to reflect better practice, but any change like that will produce massive internal resistance.

Often, people simply wait until the management consultants are gone and then switch back to the way they always did things. Another problem is the way people have always done things is not necessarily the way they are [i]meant[/i] to do things, which produces inefficiency thats very hard to track down.

The NHS has spent huge amounts of cash on outside experts, but generally the returns on these investments seem quite small.

Anonymous Coward says:

High costs provide income at many steps along the way, as has been mentioned above. Insurers, pharma companies, doctors, hospitals, equipment makers, all make profit.

And they should, as long as they are providing necessary goods and services. But if they are not, then cut them out of the picture.

Guess who should be cut out.
You guessed the insurance companies? Good for you.

Ferin says:

It mgith be worth noting

When we’re talking about pharmacological JIT measures, it’s not exactly a JIT like you’d see in other idustries. I know the idea of trucks delivering syringes of medicines on a just in time basis is a little off putting, but that’s not really how it’s done.

Our hospital was a pretty typical example. We still stockpiled medicine and supplies. I was talking with a pharmacy tech who told me we probably had at least 2 weeks worth morphine level pain medication stockpiled. (She was explaining why security in the pharmacy was so strict, honestly!) The very nature of manufacturing processes and distribution for many medicines on large scale tends to work against any type of JIT delivery. (Most medicine are still batch produced due to scaling and logistical concerns)

Our hospital’s form of JIT was basically stockpiling the components of medicines, and only mixing them up and delivering them as they are needed by the patients.

JOHN B. WACHIRA (profile) says:


JIT concept can be used in specialised hospital departments like Radiology and Operating Theatre for scheduling of routine radiological procedures and elective surgical procedures respectively. JIT practice would the help to optimize the allocation of human and physical resources as well as managing shifts and equipment maintenance.

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