This year KAIZEN™ is particularly focused on further supporting the healthcare sector. For most of you, KAIZEN™ in Healthcare might look something new and different, but leading health institutions in North America, Europe and Asia are already using Continuous Improvement as a way to achieve their goals.
Recent research from McKinsey and Company suggests that if the healthcare industry delivery could rely more on labor productivity to meet the demand growth in the U.S., by 2028 the total spend could be up to $550 billion less than current national health expenditures (NHE) projections. The research also suggests that moving into a productivity-driven growth model could generate a cumulative savings over the next decade of $2.3 trillion.
Another interesting study from Harvard Business Review explains, “why major hospitals are losing money by the millions”. Several big-name hospitals report significant declines and even net losses to their Fiscal Year 2016:
• MD Anderson Cancer Center lost $266 million on operations in FY 2016 and another $170 million in the first months of FY 2017.
• Prestigious Partners HealthCare in Boston lost $108 million on operations in FY 2016, its second operating loss in four years.
• The Cleveland Clinic suffered a 71% decline in its operating income in FY 2016.
• On the Pacific Coast, Providence St. Joseph Health, the nation’s second largest Catholic health system, suffered a $512 million drop in operating income and a $252 million operating loss in FY 2016.
• Two large chains, Catholic Health Initiatives and Dignity Health, saw comparably steep declines in operating income and announced merger plans.
Additionally, the following issues are related to the pressure that the health care system has to deal when their revenue goes down:
• Purchasing redundant, expensive medical equipment and creating excessive demand
• Highly paid specialists providing complex procedures with diminishing value (restricted payments by Medicare and other insurances)
• Tolerating inefficiency in care delivery especially during the weekend.
Our current clients and others within healthcare can benefit from having their processes improved. The KAIZEN™ foundation is to start by identifying what is value added for the patients/clients and do everything we can to improve it toward it.
At Kaizen Institute, we help organizations by promoting a structured organizational transformation, dedicating time to teaching organizational leaders to see real wastes. As behavior matures, leaders can better define organizational targets and lead the change.