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What Does Car Manufacturing Have to do with Health Care?

By Dr. David C. Pate, News and Community
November 27, 2012

Editor's note: My article that follows originally appeared as a column titled "What hospitals can learn from car manufacturers" in the Idaho Statesman's Business Insider last month.

High-performing organizations learn from others, no matter the industry, and St. Luke’s Health System is transforming in part by adopting from best-in-class performers in other fields.

We have been using lean methodology, an approach often associated with the automobile industry and frequently referred to as the Toyota Production System, as our operating management system since January of 2010. 

People sometimes respond to this by observing that taking care of patients is not the same as building cars, and they are right about that. But we can’t be too quick to dismiss all that can be learned from what the auto industry has done to pioneer and develop lean principles. 

Lean is a systematic methodology for process improvement that involves the relentless pursuit of waste. Waste is anything that does not add value to the customer. Defects, overproduction, waiting, non-utilized resources, transportation, inventory, motion, and excess processing are broad categories of ways to view waste.  

Let me give you an example of waste in health care. 

Let’s say that 80 items are routinely used to perform a particular surgical procedure, and that about 5 percent of the time, a situation arises where you need another 20 items. All of these items must go through inventory, sterile processing, packaging, and tray assembly. 

If we put all 100 items on each tray so that surgeons will have everything they need for every case, we are incorporating the wastes of overproduction and excess processing 95 percent of the time.

If instead we process these additional 20 items in a separate tray that is available when needed, we have eliminated these two wastes.

Of course, we still need to make sure the additional tray has gone through sterile processing and packaging or we will introduce the waste of waiting (on the part of the surgical team and the patient under anesthesia). And if we don’t make sure that it is located in a predictable location, we can create the waste of motion when a staff member has to track it down.

This may not seem like a big deal until you consider how many times each of these processes with built-in waste occurs. What we have found is that as we teach staff about lean, they quickly begin to realize the opportunities for improvement.

In health care, there is so much irrational variation that can be minimized with the application of lean principles and the removal of waste through standardization. Standardization at St. Luke’s has resulted in savings of more than $10 million since we began with lean thinking. We call it TEAMwork: Timely – our commitment to do the right thing at the right time, every time; Effective – continually seeking the best practices for our daily activities; Accountable – taking responsibility for results and improvements; and Measureable – measuring everything we do.

While we are constantly looking for opportunities to improve our efficiency, TEAMwork is helping us accomplish much more. We’re also using it to improve safety, our patients’ experience, and our quality results system-wide.

Health care delivery is overdue for repair. Applying lean principles is one way to be part of that repair.

About The Author

David C. Pate, M.D., J.D., is president and CEO of St. Luke's Health System, based in Boise, Idaho. Dr. Pate joined the System in 2009. He received his medical degree from Baylor College of Medicine in Houston and his law degree from the University of Houston Law Center.