How does the evolution of Lean evolving into healthcare Long Term Care (LTC) affect you? As our average life span increases with advancing medical practices, the chances increase that someone close to you, or, you yourself, will require LTC. The Quality Practices of a LTC facility should be the key criteria in making the best facility choice for yourselves.
Most importantly in this moment, LTC is a very challenging business environment, and if Lean practices show benefits when applied here, it underscores Lean can be applied as a quality advancement anywhere.
Long Term Healthcare isn’t a topic that comes up around casual conversations often, though, it should more often than it does. If it did arise, topics other than Quality dominate the talk. Often, the discussion is blandly about location, referrals from friends, and the facility service offerings.
However, quality programs should be the primary focus, because it determines everything else as far as satisfaction in making the best choice for a loved one or yourself, and the end costs.
I’ll make my case.
Quality programs, here I focus specifically on Lean practices, have advanced into and uplifted healthcare for well over a decade now. “Lean” as a quality program, focuses on reducing waste while increasing efficiencies. A small sampling of just four accomplishments in general healthcare settings:
One project reduced coding of Medicare recipients and resulted in $857k gain in net income, another reduced patient visit times, and improved staff scheduling. The project saved $800,000, increased through put by 25% and freed up an additional 14 positions to fill open jobs. Another initiative reduced the amount of time for adding a physician to medical plans. The new process produced $3M per year in savings. The final sample is a project for reducing surgical supplies, bringing an immediate savings of $163,410 and saved an additional $841,540 over the projects life cycle. (1)
You’ll agree – these are more than significant numbers. These successes are no doubt eyebrow raisers ! These hospitals are ones I would prefer to go to, given a choice. They demonstrate quality focus, and cost savings.
So, how about the inroad of Lean to LTC? Not so much so. Believe it or not, it’s still relatively rare. The reasons are quite numerous, but the nucleus is that LTC is still dominated by a top down management approach that stifles most modern quality initiatives right from the start. The real quality differentiators in any organization are the ground floor operators. Another root reason for a very slow shift from top down management style is the palatable legal risks and strict regulations dealt with on a daily basis. Both of these factors are unrelenting in LTC. This makes LTC quality initiatives highly difficult beasts to implement.
So, while healthcare in general has seen significant benefits from Quality Programs, they have been slow to be adopted into the LTC segment. While many LTC businesses market themselves as being value based, caring organizations, they often don’t produce numbers to support these mostly subjective claims.What this means for you, is that a LTC facility that does implement programs such as Lean, is way ahead of the pack in customer satisfaction and administration efficiency. They will have transparency to statistics that prove their performance.
However, as more and more business models in LTC will be forced into Medicare Pay For Performance models which are gradually dominating healthcare in general, the shift to bottom up management styles will become a “do or die” necessity. Top down management will become unsustainable to foster boosts to bottom line numbers to maintain the business. These changes aren’t looming on the horizon. Medicare and Medicaid has adopted Pay For Performance programs since 2012 to encourage hospitals to improve quality of care and cut costs. Some state Medicaid programs have extended pay for performance for nursing homes because they realize LTC play an important role affecting readmission rates. (2)
LTC facilities eventually will be pushed to adopt quality programs such as Lean/ Lean SixSigma or alternatively suffer financial consequences of business loss to modernized competitors.
Here are a few samples of successful Lean practices already applied in LTC settings:
- Response to hospital discharge planners improved from 40 minutes, to 15 minutes for at least 85% of the referral. saving $31,000. The downstream effect was a 1% increase in admission rates, meaning a $305,000 annual increase in operating revenue. (3)
- Decreased pressure ulcers by 60% in one year. (4)
- Immediate and impressive results of reducing Avoidable Rehab Unit Overtime Cost: overtime decreased by half and projected annualized saving is $12,000 … Importantly, nurses are leaving for home on time. (5)
In other words, Lean has improved admission rates, patient satisfaction, and staff satisfaction. Given these success stories, you’d think LTC would have embraced quality programs everywhere, but the truth is that such stories in LTC are rare today. This is why finding an LTC facility that has a working Quality Program is important to you. Quality Programs increase the facility revenue, decrease costs – which translates into a better day to day experience for everyone.
LTC is a unique business model. Some of its challenges parallel other business types – human resources, administration overhead, financial flow and optimizing efficiency in daily operations. What makes LTC a rare breed, is well expressed in an article by Lean Consultant Sean Cary (see citation #6). These added hurdles are in not engaging innovation, old school strict top down management hierarchy, near-constant risk of regulatory and legal action, and measuring performance of the business primarily on post process numbers rather than the deployment point of resources (reactive vs proactive). (6)
This is a story of how Lean in everyday life can affect you – when the time comes for you to discuss LTC options for yourself or a loved one, put Quality first. Seek out an organization that embraces modern quality culture, and your best options will surface quickly. While many LTC organizations market themselves through subjective slogans, those that implement Quality Programs such as "Lean" will have real measures for you to gauge their actual performances.
Its also a great example of how Lean can work in even the most challenging circumstances, toward continuous improvement.
While fewer options exist at present, the healthcare industry will continue pushing long term care organizations to perform better, smarter, and more efficiently.