mprovements in the Manufacturing Industry Versus Health Care Industry

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1) As health care looks at continuous improvement (as done in manufacturing), one of the most prominent questions that has arisen is, “Can the principles that worked in manufacturing really transfer over to health care? Taking care of a patient is not like building a car on an assembly line. Can standardized processes really work in a setting that focuses on humans and their needs?”

2) Write a paper of 1,000–1,200 words that takes a position on this argument. Justify the rationale for your position.

3) Refer to the assigned readings to incorporate specific examples and details into your paper.

4) Prepare this assignment according to the APA guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.

5) This assignment uses a grading rubric. Instructors will be using the rubric to grade the assignment; therefore, students should review the rubric prior to beginning the assignment to become familiar with the assignment criteria and expectations for successful completion of the assignment.


Working Harder Versus Working Smarter


As health care entities begin the struggle to adapt to the changing environment that is being pressed upon them by the new health care reform legislation, the growing refusal of employer-based health plans to subsidize the cost of care provided to Medicare, Medicaid, and self-pay patients, and the increasing pressure to operate more effectively, there is increasing pressure to examine current system functioning for opportunities to improve. When revenues begin to diminish as double digit costs of care are reined in, it forces all entities in the health care delivery system to re-examine the processes and procedures of care delivery. The question of identifying and removing waste and inefficiency must be answered. In this module, we will examine some of the basic principles in which the quality and process improvement drive is grounded, how these principles have operated in health care agencies that have implemented them, and the lessons learned from those experiences.

Why Does This Have To Be Done?

In the early 1970s, the Japanese began to implement the lessons they learned from W. Edwards Deming after World War II by introducing high quality, lower cost cars into the American economy. There was a great rush to understand how they accomplished the feat of turning around their shattered manufacturing base and overcoming the image of cheap, easily broken or damaged goods coming from the East. Companies such as Toyota, Honda, Mitsubishi, Sony, and others began to create a new image, that of high quality at reasonable or lower costs. The Japanese economy began to rise in importance, becoming a financial powerhouse through several decades. Notwithstanding the issues of quality that have recently plagued Toyota in particular, it is still useful to study how the Japanese pulled it off. American manufacturing companies began to study Japan’s techniques and implement them. Chief among these were the focus on efficiency and effectiveness. However, during this period, health care providers remained distant and unengaged in looking at what they basically considered the business of manufacturing. Physicians and hospital executives reassured themselves that they were different, that the provision of health care was too complex and difficult to reduce it to an assembly line platform, that there were no lessons to be learned from car makers on how to help people back to a healthy state. During all this, health care costs continued to rocket to new levels, becoming an increasingly large component of the gross national product and driving health care expenses into double-digit levels year by year. However, by the early 1980s, the first cracks in the wall of indifference were beginning. When Medicare changed its method of compensating providers from a simple fee for service to a flat payment for diagnosis-related groups (DRGs) in 1983, it sent a shock wave through the health care community. That was followed over the next decade by many experiments in different payment methodologies. The message throughout was the same: health care costs were becoming too expensive for the nation to afford and had to be reduced. Slowly the system began to move in a different direction, but the changes came very slowly indeed. However, in the early 2000s, a general consensus began to emerge from all stakeholders that the system was not sustainable, both financially and from an outcomes perspective. The rate of medical errors, when revealed by the Institute of Medicine in the late 1990s, complicated the discussion, as the rate of increased cost did not correlate with hoped-for improvements in care. As mentioned in earlier modules, people who were not shielded from the true reality of health care costs by their employer-subsidized health insurance were getting a shocking introduction into charges from a hospital stay that could run into six figures. The Patient Protection and Affordable Care Act (PPACA), which was passed in March 2010, began the large task of attempting to control the rising spiral of health care costs through a variety of methods. Health care providers have become painfully aware of cuts in reimbursement, coupled with requiring hospitals to refund monies paid to them if they billed for the care that resulted from preventable errors. All providers are seeing the early rise of major system changes that must reduce costs over the long run and make a system that is sustainable for the distant future. Many of them are beginning to take a careful second look at the achievements seen by the formerly dismissed manufacturing facilities in reducing costs and improving quality of outcomes.

What Is Starting to Happen?

Hospitals in particular have always been the most expensive part of the health care continuum of care. Their focus on high-acuity patients who need focused patient care services and high technology to provide those services have also led to the highest costs in the system. Hospitals have begun to recognize that they must change their former ways of operating in favor of ways that allow them to reduce costs while improving quality and diminishing errors. The methods that came out of Japan appear to offer a road map on how to do this.

What are the common factors in the Japanese approaches?

There are multiple names for the improvement processes originally developed from the 14 Principles of W. Edwards Deming. They include LEAN, Six Sigma, Continuous Improvement, and several others. However, the bulk of them have very similar principles:

·Eliminate the waste of repeated mass inspections by building quality into each step of a work process, and enable all workers to “stop the line” to correct a problem at the moment rather than passing it on to someone else.

·Minimize total cost by standardizing processes and steps, thus reducing variation.

·Constantly improve every process and work function by vigilance, awareness, and a willingness to experiment with a better way.

·Break down barriers between departments, teams, and staff, so that work flows smoothly from one site to another.

·Promote seamless communication between all aspects of the process and all locations where the process happens.

·Eliminate all types of waste by removing non-value-added steps in each process, or steps that are unnecessary in order to achieve the final outcome.

These concepts are fundamental to a mindset of continuous improvement, which is the foundation for making changes that improve efficiency and effectiveness. It generally begins with dividing a defined process, such as the admission of a patient to a hospital, into its individual steps. This may take hours or even days, as various members of a redesign team observe the process in action, identify and measure each of the steps, and assess whether they provide value to the outcome of the process (in other words, are they essential to make the outcome occur?) Once this initial evaluation is completed, the redesign team then looks at each step to see if it can be eliminated, redesigned, or consolidated with another step in order to shorten the process. When the new process is finally assembled, it is then tested and monitored to ensure that it is functional, efficient, and effective in delivering the anticipated outcomes. It is also assessed for the need to retrain workers to use it. A measuring and monitoring plan is developed in order to determine if the process is being used, is working effectively, and is delivering outcomes. A communications plan to stakeholders must be designed and implemented, with the goal of building understanding and engagement on the part of all affected by the new process.

How Do These Concepts Work?

Some examples of how these concepts have been used in health care settings include the following:

1.A team of staff in a hospital magnetic resonance imaging department worried that their room turnover (the time it takes to remove one patient from the scanner, clean and prep the room, bring in the next patient, and begin the next scan) was too long. They examined their process by identifying its definition (the start step of the process and the end step of the process), its component steps, its expected outcomes, the time it took on average, and the resources it consumed. They then constructed a time line for each step, examined the value of each step, and looked for opportunities to improve. After removing several steps that they assessed as not adding value, and after looking at the process as two different processes that had been running consecutively, they came up with a new process that cut their average room turnover time from 18 minutes to 4 minutes. This resulted in an addition of up to one hour per day where they could scan additional patients, reducing patient waiting time for an appointment and increasing revenue. Since the staff, using internal consultants to help them, designed the new process, they were proud of the results and their efforts. Their implementation of the new process was seamless and is sustainable months after the change.

2.A surgery team was interested in finding ways to reduce the amount of time it took to set a room up for a surgical procedure. As they looked at their process and each of the steps, they found that approximately 30 to 40 minutes could be used up by the surgical tech in hunting down the correct surgical packs, trays, and instruments required by the surgeon for a particular case. They came up with a process that utilized prepacked trays and instruments that were prepared by an outside company and delivered on a cart to the surgical suite. The surgical tech simply wheeled the cart into the room, and the bulk of the supplies and equipment needed were immediately available. This reduced room prep time by 20 minutes or more per case.

3.An emergency department (ED) team felt that they were spending too much time counting the inventory of their supplies and restocking them on a daily basis. They reviewed their procedure, and implemented a new system that utilized two bins per supply item on the supply carts. One bin sat directly in front of the other, and each was stocked with the same supply and in the same amount. The ED staff pulled the supply item whenever they needed it, and when the first bin was empty, they placed it on a specified location in the supply storage area and pulled the second bin forward. The staff from central supply picked up the empty bin (which was labeled with the supply item and number to be placed in it), refilled it, and replaced it behind the bin that was currently in use. Thus, there was no need to count the supply each day, the caregivers never had to worry about running out, and the supply restocking process was simple for the central supply staff. Staff satisfaction with this system zoomed.

What Works and What Does Not?

When implementing this type of change, it requires continuous discipline, a relentless focus on the ultimate goals, and engagement of all parties affected by the change. It takes years to learn to do this type of fundamental culture change well. Some key issues to consider include:

·The need to involve physicians from the start. Particularly in the acute care setting, physicians are key to the success of any major change in process. In addition, they are also a key variable that contributes to variation from standard processes. Most physicians have developed their own patterns of care and preferences for equipment. Once they have become comfortable with these, it is very difficult to get them to change. The introduction of evidence-based practice changes can be very difficult for the surgeon, for instance, who has acceptable patient outcomes from his particular approach, but whose patients stay in the hospital two days longer than those of his colleagues. Physicians need to be active participants in looking at data, reviewing relevant research, and changing the protocols of care as a result. If they are not involved, the new change initiative will stop right at the physician’s order sheet. Physicians control the utilization of care resources to a major degree and are essential players to engage in this type of change.

·The need to involve staff from the start. In the examples listed above, the staff of the particular areas were the ones most familiar with current processes and opportunities for improvement. Once they were given the training and redesign support, they were creative and excited to take control of waste and inefficiency, which they had seen for years and felt helpless to do anything about. The engagement of staff is also important as a means to overcome the mindset of “this is how we’ve always done it”, which is often the most stubborn resistance-to-change factors of all.

·When involving staff, encourage them to experiment with changes that may make their work lives easier. The surgical techs who did not have to spend time chasing down equipment and supplies welcomed the idea of having their supplies delivered to their rooms on carts because it saved them time and effort. This is a powerful reinforcer to encourage staff to keep looking for other ways to become more efficient and reduce the amount of wasteful work they do.

·The importance of listing specific outcomes from the beginning. When the redesign teams know that they are looking for ways to accomplish a certain outcome, it helps them to stay focused during the design phase and gives them a benchmark to measure their progress against. If the outcomes are not achievable, it is the earliest indicator to back up, try again, and do something else in a different way.

·Set up display boards in each department so everyone knows what projects are in play and there is a consistent way to present new ideas for consideration. This enables people working on improvement teams to see the results of their progress. Measuring and monitoring outcomes is the last critical step in success.


There are a multitude of pressures on health care facilities and providers to find ways to reduce the rapidly growing costs of the current system. The methods that manufacturing has used for several decades to improve quality while reducing cost are now gaining a beachhead in the health care industry, and providers across the country are deeply engaged in learning how to use the techniques that Deming taught the Japanese with such startling results. An organization that is self-learning, constantly improving, and running efficiently is one that will survive the changes of health care successfully.


Electronic Resource

1. Edward Deming’s 14 Principles: Business Quality Improvement

Read “Edward Deming’s 14 Principles: Business Quality Improvement,” located on the more website. Resource

1. Extreme Toyota: Radical Contradictions That Drive Success at the World’s Best Manufacturer

Read chapters 1, 6, and 11 in Extreme Toyota: Radical Contradictions That Drive Success at the World’s Best Manufacturer by Osono, Shimizu, Takeuchi, and Dorton (2008).^B&bookid=25116&refid=C3VGQ

2. Failure IS an Option

Read “Failure IS an Option,” by Scannell, from Cio (2013).

3. Introducing Quality Improvement

Read “Introducing Quality Improvement,” by Kurth and Morton, from Pediatric Anesthesia (2013).

4. The Fit Organization: How to Create a Continuous-Improvement Culture

Read “The Fit Organization: How to Create a Continuous-Improvement Culture,” by Markovitz, from Rotman Management (2016).

5. The Key to Success is Staying Focused on the Customer

Read “The Key to Success is Staying Focused on the Customer,” by Blanchard, from Material Handling and Logistics (2016).

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