Lean Saves Hospital Nearly $50 Million a Year
I wrote last week about a Texan city saving millions of dollars by applying lean six sigma methodologies.
News hit the stands recently about a hospital achieving similar results. Denver Health utilised lean six sigma on over 400 projects last year, achieving savings of around $50 million in just one year, and over $135 million over the course of the project.
The company chose five core areas to focus their lean efforts on:
- revenue cycle
- community health
- primary care
- hospital flow
- the operating room
Patricia Gabow, CEO of Denver Health revealed the benefits of their lean approach.
"We have shown that if you get rid of waste, not only is there a financial benefit, but there is a quality benefit," Gabow said. "To think that waste improves quality is incredibly difficult for me to understand."
Gabow said Denver Health has seen a 60 percent drop in expected mortality. Each value stream has an executive sponsor and a steering committee that meets monthly. Gabow also reviews metrics every month for these projects.
Since launching the lean project in 2006, the company has trained nearly 250 managers in lean methodologies, who have conducted over 400 projects. Impressively, Denver Health has achieved the high quality marks and boost to the bottom line without reducing the workforce.
"We have shown that if you get rid of waste, not only is there a financial benefit, but there is a quality benefit," Gabow says. "To think that waste improves quality is incredibly difficult for me to understand."
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