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OM in the News: Process Improvement In Hospitals

June 10, 2012

The New York Times (June 3,2012)  writes that there is some good news about our  health care system. A growing number of hospitals, doctors, employers and insurers are using the process improvement tools of Chapter 7 to reduce the cost of delivering medical care while maintaining or improving quality.

Seattle’s Virginia Mason Medical Center, for example, has conducted reviews to eliminate waste and inefficiency. It says that after doctors were required to use a checklist of the medical circumstances needed to justify a costly imaging test, CT scans for sinus conditions dropped by 27% and M.R.I.’s for headaches by 23%. It placed nursing teams and supplies closer to patients, freeing nurses to spend 90% of their time on direct patient care, far more than the 35% at most hospitals. The time needed to process insurance claims was sharply cut by consolidating steps.

Virginia Mason also collaborated with Starbucks and the company’s insurance provider, Aetna, to find better ways to treat patients with back pain, a costly burden to Starbucks. At the start, all patients complaining of back pain typically waited many weeks to see a specialist, who would then prescribe a costly, unnecessary M.R.I. before finally sending them on to a physical therapist. Using process analysis to separate out the uncomplicated cases,  the medical center was able to send them directly to a therapist on the day the patient requested an appointment, and the vast majority were able to quickly return to work.

Premier Inc., a 2,600 hospital group, has also reduced unnecessary laboratory and screening tests and reduced labor costs by eliminating inefficient processes, like multiple re-entries of the same patient data for admitting, scheduling, discharge and billing. It has started  using administrative assistants rather than nurses to call patients to remind them of appointments. Premier reported  that over a three-year period, 157 of its hospitals in 31 states saved almost 25,000 lives and reduced health care spending by nearly $4.5 billion, a 12% savings.

Discussion questions:

1.  What are the benefits to Starbucks, Aetna, and Virginia Mason from their new approach?

2. Why is OM such an important topic in hospitals today?

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2 Comments leave one →
  1. June 11, 2012 9:23 am

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Supply Chain Management Research

Andreas Wieland’s supply chain management blog for academics and managers

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