Hospitals: Attempting to Save $155 Billion

by MK Strupe on Wed, Sep 30, 2009 @ 11:03 AM

With all of the controversy and criticism spanning the networks and filling the newspapers, one thing is certain: It's time for healthcare to go Lean.

As outlined by President Obama's Healthcare Reform plan, the 5,700 hospitals that operate in the United States must cut an average of $2.6 million annually over the next 10 years. An overwhelming task to say the least, but for an industry that is flooded with inefficiencies, it is a revolution that would benefit all parties involved. Many people fear change and reform; however, many hospital executives are welcoming the demands to meet lean standards of operation, confident that it will bring about improved patient care and reduced costs.

Delnor Hospital in Geneva, Illinois, for example, was considering an $80 million maternity ward expansion project; however upon the implementation of Lean principles the hospital discovered that signing discharge papers was the bottleneck in the process, keeping patients waiting for hours to be approved to go home. Not only is this costly to the patient (as some would spend an extra day), but it is also costly to the hospital in terms of available beds and the ability to accept and treat new patients. Delnor was able to side-step the expansion project by simply hiring an additional nurse and designating her to handle discharge papers. Nonetheless, it makes you wonder- where else in daily operations are hospitals (and, in effect, patients) wasting money?

Other hospitals have been accused of wasting $10+ billion in unused medical supplies due to over- ordering items and letting them expire. Simpler Consulting CEO, Marc Hafer, in an interview with USA Today, estimated that "90% of the time and cost in hospital care is wasted and $19 billion could be saved each year if all hospitals were to get serious" about reform.  For hospitals this means:

  • implementing just-in-time inventory purchasing
  • following lean principles and business disciplines
  • eliminating unnecessary steps, tests, and procedures
This is where Business Process Management (BPM) Software makes sense. BPM Software is a solution for hospitals looking to reduce costs and achieve operational efficiency. Using a full circle approach, BPM allows you to improve your organization's operations by: Modeling, Automating, Managing, and Optimizing your business processes.

Business Process Management Software

Through this 4 step approach, MAMO (Model, Automate, Manage, and Optimize), your organization has the ability to:

  • Map out your current business process to identify bottlenecks and workflow inefficiencies
  • Test your process in a virtual environment simulation to ensure efficiency prior to automation
  • Automate your workflow including electronic forms, email notifications, and process alerts
  • Manage the process and usual events, patients scheduling, industry changes, etc.
  • Continuously optimize and refine the process to ensure your organization is always operating at Lean levels of operation.
Moreover, BPM Software is more than just a process improvement tool; it is a platform upon which to support, run, and integrate your existing software applications into a single, easy-to-use interface. This being said, is your healthcare organization prepared to meet the changes being demanded? Is your hospital throwing away millions of dollars on wasted medical supplies and process bottlenecks?  Has your healthcare organization looked into Business Process Management Software?


Related Posts:

Getting Started with Process Management

Business Processes: Recognizing You Need Process Improvements

Lean Healthcare?


Mary Katherine Strupe
Marketing Coordinator

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This post was written by MK Strupe