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Mark Graban Slides - HIMSS and FormFast
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Mark Graban Slides - HIMSS and FormFast


Mark Graban's slides presented at the FormFast booth, HIMSS conference 2011.

Mark Graban's slides presented at the FormFast booth, HIMSS conference 2011.

Published in Business
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  • This was a 10-minute intro presentation for an IT/IS audience. There are many talking points, but a main one is that Lean is NOT traditional cost-cutting and the slide of financial impact shouldn't be taken to indicate that Lean is only about cost and revenue. The main point is that better quality and better processes LEAD to cost reduction - quality and cost go together.
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  • Why Lean? We need to “start from need” and not just be pushing lean tools, our focus needs to be on using Lean methods to solve important problems and to improve our hospital culture
  • Not just cost savings – but quality and safety improvementsThedaCare Dean Gruner =“quit counting” after $20M for a while. Freed up $12 M by better managing revenue cycle. Another hospital that developed a process for catching unpaid emergency-room bills brought in an extra $3 million a year.NYC – gloves & suchDelnor That's exactly what happened at one hospital, which mulled an $80 million expansion to its maternity ward but then found that once a nurse was dedicated to the discharge process, the existing facility could keep up with demand.Examples of not expanding the ED – improving flow (only 16 rooms instead of 24 at Avera)Riverside clinic – in the black for the first time ever with leanLean techniques have helped Denver Health's doctors see more patients — mainly by eliminating paperwork and rearranging offices so that the physicians don't have to do as much walking. In just one clinic, such moves have generated an extra $520,000 in revenue since 2007.As part of fixing the revenue cycle, Burnette's team zeroed in on patients whose care is partly paid for through grants. The hospital often recouped the grant-funded portion of the patient's bill while neglecting to bill insurance for the rest, potentially missing out on as much as $18,000. The team came up with a reliable communications system between the grant oversight office and the patient-billing department, boosting revenue by $2.3 million.No new people or no new equipment or no new space unless you look at it with Lean first.
  • At Allegheny General Hospital, the average payment for a patient who developed a central line-associated bloodstream infection (CLAB) was $68,894, but the actual average cost of treating the patient was $91,733, leading to a gross loss of $26,839 per case. The hospital had 54 such cases in the medical intensive care unit and coronary care unit between July 2002 and June 2005. The infections resulted in a total economic loss to the hospital of $1,449,306. 2,000,000 Estimated infections per yearX$15,275(Average additional hospital costs when apatient contracts an infection)= $30.5 Billion
  • Toyota is not a luddite company. They do indeed use software. Their factories aren’t run using the traditional MRP planning methods that most non-Lean manufacturers would take for granted. But Toyota certainly uses computers for many appropriate functions, including long-term forecasting for their supply chain. They use technology that serves their process and their people. Technology serves them, as opposed to changing your processes to fit the “best practices” embedded in some software system (whether that’s ERP for manufacturers or EMR for hospitals).


  • 1. Lean Hospitals
    Improving Quality, Patient Safety and Employee Satisfaction
  • 2. Challenges Hospitals Face
    Increasing Cost of Providing Care
    Decreasing Reimbursements
    Quality & Patient Safety Problems
    Increasing Patient Populations
    Staffing Shortages
    Increasingly Complex Information Systems
    Decreasing IT Staff & Budgets
  • 3. Examples of Lean $$ Results
    ThedaCare (WI)
    $27M savings over 4 years
    Doubled operating margin
    Park Nicollet (MN)
    $7.5M savings in 2004
    Florida Health System
    $11M building cost avoidance
    Dr. Sami Bahri, D.D.S.
    Increased volume & prod.
    Paid off office mortage
    New York H&HC
    $5M savings from JIT
    $4M savings from rationalizing O.R. supplies
    Delnor Hospital (IL)
    Defer $80 capital expansion
    Denver Health
    Increased revenue $520k at one clinic
    Total savings $29M
    $2.3M revenue boost
  • 4. Quality & Cost
    “Lean is a quality initiative, it isn’t a cost-cutting initiative. But the end result is, if you improve your quality, costs will go down.”
    Bill Douglas, CFO of Riverside Medical Center (IL)
    Allegheny Medical Center:
    Reduced central line infections by 95%
    Hospital lost $26,839 per case (~16 cases/yr) = ~$500k/year
    Beth Israel Deaconess Medical Center:
    Avoided 300 V.A.P. cases in one year
    $12M cost savings
  • 5. 5
    “Equally important pillars”
  • 6. Waste in Primary Care
    670 ft for single procedure prep
    (pre-Lean walking pattern)
    MDs, PA, RNs:
    Poor organization
    Supplies in inconvenient locations
    Missing information
    The system causes this
  • 7. Simple, Team-Based Solutions
    Restocking Checklist
    • Created standardized cart
    • 8. Along with standardized rooms, eliminated the need to leave the room during patient encounters
  • Types of Information Waste In Hospitals
  • 9. With today’s technology, why do our processes wait on interoffice envelopes, push carts, and committee meetings?
    Identify Your Waste
  • 10. The Toyota Way – Technology
    Principle #8 (of 14):
    Use only reliable, thoroughly tested technology that serves your people and processes
  • 11. The Information Manager’s Role In A Lean Hospital
    Manage Information Effectively & Efficiently
    Provide Broad Value Stream Solutions
    Eliminate Waste, Including Redundant Information Collection
    Reduce Potential For Human Error
    Provide Automation Solutions
    Supporting Processes, Workflow, and Patient Flow
    Allowing Skilled Workers To Focus On Their Core Competencies Rather Than Simple Tasks
    Leverage IT Tools Wisely
  • 12. How IT Can Support a Lean Hospital
    Get End Users Involved in System Selection, Design & Implementation
    Synchronize Workflow & Software
    Don’t Just Automate the Waste
    Participate in “Kaizen Events” as Team Member
  • 13. Q&A
    Contact info: