Iowa business researchers use efficient manufacturing principles to help contain rising health care costs

Dec 5 2009

A group of researchers at the University of Iowa's Tippie College of Business is using the principles of more efficient manufacturing processes in an effort to help contain ever-increasing health care costs.

"Whether you're talking about health care or manufacturing, 'Lean' manufacturing provides a framework to systematically improve service and lower costs," said Barrett Thomas, assistant professor of management sciences in the Tippie College and a Lean expert.

Barrett and other Lean experts on the Tippie faculty work with students to teach the principles of Lean operations so they can help their organizations operate more efficiently.

Lean manufacturing is a comprehensive process that involves everyone in the organization, from the CEO down to the people on the line, Thomas said. Changes could be as major as redesigning an entire assembly line, or as basic as simply moving a single piece of machinery or equipment storage area.

For years, manufacturers have been using the Lean manufacturing principle to streamline their factory operations, improve product quality and strengthen their bottom lines. Pioneered by Toyota, Lean is a process improvement system that offers simple tools to identify and eliminate waste in an organization's processes.

Health care is one of the Tippie researchers' focuses, and the students have hands-on opportunities to see how Lean principles are applied in the field at the University of Iowa Hospitals and Clinics and Mercy Hospital in Cedar Rapids. The two organizations already have extensive Lean systems in place.

"Lean is not just brainstorming, it's making things happen during an ongoing period of time," said Philip C. Jones, Sylvia and Clement T. Hanson professor of Management Sciences in the Tippie College and a Lean expert. "If something doesn't work, then you tweak it a little bit until it gets better one day at a time."

While the principles are the same, Lean health care and Lean manufacturing are different enough that there is no one-size-fits-all template. After all, the Lean goal in manufacturing differs significantly from the Lean goal in health care.

"In manufacturing, Lean principles are about adding value to a product," said Sabi Singh, who coordinates the Lean program at the University of Iowa Hospitals and Clinics as assistant vice president for operations excellence and quality/safety. "In health care, the focus is on improving the patient's experience, which leads to eliminating waste and non-value added steps, which in turn improves finances."

Lean in health care is as comprehensive as it is in manufacturing and involves administrators, doctors and nurses to look at the process from different points of view.

"You map the process from a patient's perspective," said Singh, who has been a part of an ongoing Lean process with University of Iowa Health Care. He said the Lean analyses have increased clinical capacity and improved flow in clinics and inpatient settings.

For example, Singh points to a nurse's suggestion that led to a change in one of the hospital's chemotherapy clinics so that supplies were stored on carts near the patients, instead of in a supply room elsewhere in the building that required a long walk for the nurse. The chemotherapy patients were also arranged in pods assigned to nurses, so the individual nurse who cared for the patients in each pod wasn't walking from one end of the room to another as often. "Those two simple changes reduced the nurse's walking time by 90 percent, reducing the patients' waiting time and increasing the number of patients the clinic could care for in a day," said Singh.

Singh said the Operations Improvement Team at UIHC also provides Lean and six sigma training to frontline staff and leaders at UI Health Care as well as employees from outside health care facilities.

The Lean process is one of the teaching focuses of the Tippie School of Management's MBA program, including Lean health care. In one course, students have participated in Lean events at both Mercy Hospital and University of Iowa Hospitals and Clinics.

Thomas is also active at the national level, as he was part of a project at the Massachusetts Institute of Technology that developed a new curriculum for teaching Lean in health care. A pilot course for the project was taught this past summer at a Veteran's Administration hospital near Boston.