January 5, 2012
Move to Lean Concept Belated, but Also Absolutely Worthwhile
Terry Neefs, Saskatoon Star Phoenix, January 5, 2012
Neefs is a resident of Saskatoon.
After 38 years in business, a stint in the health-care system, experience with Fortune 100 companies along with being a part of successful "Lean" implementations, I believe the Health Ministry's plan to adopt this business concept is good news.
Implementing "Lean" in health care certainly is a game changer, but it's definitely running very late in the game.
So what is Lean? American engineer Edward Deming developed this concept after the Second World War. However, the successful and booming United States economy of the time was not interested in his teachings.
Deming took his Lean road show in the 1950s to Japan, where Toyota was one of the first to embrace the concept. The company's rise to success since then is truly remarkable, as is Japanese industry in general that also embraced Lean. The guiding principle of the program is to eliminate waste by streamlining processes, to significantly improve efficiency and quality.
This fiscal year, the cost of health care in Saskatchewan amounts to $4.5 billion, or almost 42 per cent of government program spending. The labour component of that is 80 per cent, which is huge at $3.6 billion and a good cause alone to consider Lean.
To gain a clearer perspective, the health system currently employs 43,000 persons in one way or another. So the spending works out to average wages and benefits of $84,000 per employee. The remaining 20 per cent - $900 million - is what is left to spend on everything else, such as infrastructure, medical technologies and test equipment, and the building and maintenance of hospitals.
The estimate for the children's hospital still hovers around $250 million. The StarPhoenix has reported that the Royal University Hospital has a deferred maintenance liability of $230 million that's growing, and will be essentially deferred forever at this rate.
RUH is only one of about 100 aging health-care facilities in Saskatchewan.
Lean is crucial because none of these costs are sustainable on the backs of current and future taxpayers.
There needs to be a quantum shift in how healthcare funds are allocated.
No amount of lotteries or donations ever will be enough to supplement our taxes at the current rate of spending.
Remember the Patient First Review several years back? It was basically a customer survey through the eyes of patients and highlighted many areas that need improvement, including customer service and long wait times. The Frontier Centre for Public Policy recently ranked the performance of Saskatchewan health care ninth among the 10 provinces. We have a long way to go.
And what about the electronic health record, which is needed to deliver timely and accurate information to ensure safe patient care? Electronic lab results are making progress along with diagnostic imaging, but we are a long way from comprehensive and lifelong patient eHealth records.
The Saskatoon Health Region recently received $10 million to upgrade its aging and ailing IT infrastructure, but that barely makes a dent toward the total cost of an EHR system. Some of the funding comes from Canada Health Infoway, but still leaves a huge unfunded gap.
Lean is not a silver bullet, but it is definitely the right course and a tough one. We need leadership and commitment for Lean business practices, with advocacy by the Health Quality Council. However, the single biggest challenge for health care will be the culture change that's needed.
This is a serious business that requires high standards and due diligence, and it primarily needs true business leaders at the helm.
Change brings fear of the unknown. There will no doubt be confrontations from naysayers including politicians, administrators and labour representatives.
We can only hope they wake up and get the message to stay the course for the long term.
Our financial and personal health and well-being depend on it.
By the way, Deming died in 1993 and is a recognized hero in Japan.
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."