A Bundle of Nerves

Hospital Efficiency: More Than One Way to Skin That Cat

You can learn a lot from Toyota. But can it help you run a more efficient hospital? Pat Hagan, CEO of Seattle Children’s Hospital, is a believer after the manufacturer’s philosophy of Continuous Performance Improvement, or CPI, helped his institution increase admissions while decreasing medication error rates, average length of stay, and wait times for appointments. In the process, the hospital has netted an estimated $23 million in annual savings, and avoided another $200 million in capital costs.

By directly involving hospitalists and other staff members in a range of efficiency efforts, the hospital is now able to run smoothly at 85% occupancy, up 50 beds from its normal peak of 70% occupancy. It’s just one example of how hospitals around the country are calling upon hospitalists to assist with ambitious initiatives to raise quality, increase efficiency, and rein in costs. Don’t call it bundling, but many of the efforts are achieving the same goals and priming doctors for a future in which bundled-payment systems might feature more prominently.

To learn the principles of CPI, a team of doctors and administrators from Seattle Children’s traveled to Japan and observed factories for Yamaha pianos, mattresses, and, yes, Toyota automobiles. “For us, we had to get past the fact that it was manufacturing, so what we talked a lot about is not what Toyota did or does, it’s how they did it,” Hagan says. How they do it, his team discovered, is through a core philosophy of focusing on the customer and supporting employees in their work and problem-solving.

An efficient supply system taken right out of Toyota’s playbook now saves time, money, and confusion among Seattle Children’s Hospital staff. Color-coded boards provide updates on patients. And the hospital recently hired more hospitalists to be its eyes and ears on the midnight shift. “If we’re going to have uniformly consistent practices around the clock,” Hagan says, “we need to have our resources and our people effectively allocated around the clock as well.”

Similar to the goals of bundling, Hagan says, Seattle Children’s is bringing staff together to jointly figure out how best to provide care for a patient or group of patients. To do that, the hospital is using the concept of “value streams” to map the value of care delivered throughout each patient’s hospital experience, from the patient’s perspective. By approaching such work through the eyes of the patient, “it literally forces us to think in terms of what are known now as bundles,” Hagan says. “It also forces us to look beyond our four walls, because it’s very clear that what we’re doing here has an impact on what occurs to the patient and family after they’ve left the hospital.”—BN