The Eight Types of Waste in Healthcare Processes Today

Posted on October 18, 2011 by Dr. David Edward Marcinko MBA MEd CMP™

 The Industry Must Identify and Avoid These Traps

By Mark Matthews MD

www.Creative-Healthcare.com

Operative Definitions:

Noun:
Processes: A series of actions or steps taken to achieve an end.

 
Verb:
  1. Perform a series of mechanical or chemical operations on (something) in order to change or preserve it: “the stages in processing the wool”.
  2. Walk or march in procession: “they processed down the aisle”.

 

Waste in healthcare processes can be classified into 8 different subtypes:

  • Overproduction: This term refers to the performance of redundant work. Examples include duplicate charting, multiple forms with the same information, copies of reports being sent automatically, and multiple caregivers asking the patient for the same information.
  • Motion: This term refers to the extra steps taken by employees in order to complete a task (part or all of a process). People working in healthcare facilities or offices often spend a large part of their day moving around the environment searching for people or information, gathering supplies, moving items, dropping off records, etc.
  • Waiting: This is epidemic in most healthcare settings and is often referred to as “queuing.” Waiting for items like medical records or radiographs, or a patient waiting for providers is simply inactive time with no value content at all.
  • Transport: The unnecessary movement of patients, supplies or materials that are necessary for, involved in or produced by a process. Examples include delivery of medication from a distant central pharmacy, procurement of an unexpected surgical pack to the operating room, staff needing to travel a great distance to retrieve supplies, or transporting patients large distances from the emergency room to obtain diagnostic tests. This movement adds time to a process and contains no value.
  • Over-processing: Excess processes that do not add value from the patient’s perspective. The most prevalent example of this in healthcare is the processing of regulatory paperwork or the inclusion of extra steps merely to satisfy a regulatory condition. Also included are activities like order clarification due to poor handwriting or erroneous abbreviations, missing medications from a pharmacy area leading to a delay in treatment, and redundant charting or paperwork.
  • Inventory waste: Seen when too much product is acquired ahead of actual demand. This leads to a risk that items may become outdated or expired, leading to waste and excess cost. This is most often seen in healthcare in association with poor inventory management. Inspection of the average hospital storeroom will yield many items that will not be needed for months to years ahead. In addition, catering to the individual needs of all surgeons in the operating room leads to the accumulation of multiple trays and costly instruments that are used infrequently.
  • Rework: This term refers to work that contains errors or defects that require correction. In healthcare, this is seen in coding and billing errors requiring reprocessing, medication errors requiring additional reconciliation, patient mishaps requiring reporting and perhaps additional treatment, and surgical errors requiring re-operation.
  • Not using people to their full potential capabilities: This is often referred to as the “8th form of waste” because it was described after the original 7 forms of waste related to manufacturing were defined. It refers to a mismatch of a particular task to the skill set of the person assigned to perform that task. It is common to see significant variation in the ways different people will perform the same task. This often arises when there is an unclear expectation set forth by management or a lack of standard processes. Matching tasks to skill sets can lead to improved quality of work, employee satisfaction, and employee loyalty.

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About the Author

Dr. Mark Mathews has 20 years of active clinical practice in the field of Anesthesiology. Located in Scottsdale, Arizona, he has served on the management board of his large multi-specialty anesthesiology group in the Phoenix area as well as various committees within the Scottsdale Healthcare System. Currently, he is developing simulation models mimicking various medical inpatient and outpatient processes with an emphasis on improving Patient Safety through the application of Lean and Six Sigma analysis. After receiving his Bachelor of Science and Medical Degrees from the University of Arizona, Dr. Mathews completed his residency training in Anesthesiology at the University of Minnesota. Subsequently, he received specialized fellowship training in Neuroanesthesiology from the Barrow Neurological Institute in Phoenix, Arizona. Currently, he is a Diplomat of the American Board of Anesthesiology and maintains numerous memberships in professional medical societies. 

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Examining the College Credit Bubble

Posted on October 18, 2011 by Dr. David Edward Marcinko MBA MEd CMP™

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Expensive – Even for Medical Professionals!

By Rick Kahler CFP®, MS, ChFC, CCIM

The latest bubble forming on the horizon isn’t in real estate or stocks. It’s the cost of a college education, up four times the rate of inflation since 1985—twice as much as health care costs.

What’s Driving this Stratospheric Rise?

Just like the housing crisis, easy credit and poor government policy.

The Federal Government as Champion

For decades governments have championed making a college education affordable for all, just as they did home ownership. Since some segments of society couldn’t afford an education or a house, the answer was to encourage lenders to make loans they wouldn’t normally have made. This was done by guaranteeing lenders that if the loans went bad; the government would take them over.

Dual Results

There were two results of this seemingly noble policy. First, with easy credit available, almost any jobless teenager could borrow up to $250,000 for a college degree without a worry in the world of paying it back until graduation.

Easy credit drives up prices, as the increased demand exceeds supply. Colleges increased tuition at a dizzying rate, simply because they could easily fill classes with students who could easily pay the tuition by painless borrowing. Normal market forces were thwarted, and prices rose exponentially and consistently. Four years of tuition that cost $50,000 in 1985 costs $200,000 today.

The second result is a replay of the housing crisis. According to an article by Malcolm Harris in the September/October 2011 issue of Utne Reader, students now owe more than $800 billion in outstanding student debt, of which only 40% is in active repayment. The majority of student loans are in default or deferment. Since these debts are guaranteed to the lenders,U.S. taxpayers are on the hook for them.

Unintended Consequences

The government’s artificially gaming markets to give credit to those the market would normally deny, while well intended, causes unintended consequences. The distortions create a new set of problems, sometimes as bad as or worse than those that inspired the attempted fix in the first place. More often than not, most of the parties to the transaction ultimately lose.

The Students

Among the losers are the students themselves. Few take the time to calculate the overt cost of obtaining their education with the corresponding salary it prepares them to earn. But, Laurence Kotikoff, professor of economics at Boston University, describes the hidden costs in the September 2, 2011, InvestmentNews. These include the time spent learning rather than earning, plus the progressive income tax which taxes annual earnings rather than lifetime earnings. According to a recent study by economists Stacy Dale and Alan Krueger, going to more selective colleges and universities makes little difference to future income.

Of Doctors and Plumbers

Kotikoff compares two students, neither of whom borrows for their education. One becomes a doctor and the other a plumber. The doctor spends 11 years of her life in school in order to earn $185,895 annually. The plumber spends two years and earns $71,685. The bottom line is that the plumber’s sustainable spending is equal to the doctor’s.

Re-Gaining Affordability

If the government stopped guaranteeing college loans, the initial result would be significantly less demand for a college education. Tuition rates would plummet, eventually becoming affordable once again as the source of easy credit dries up.

Assessment

Without easy borrowing as an option, parents and students would be encouraged to begin college saving early. Students would have new incentive to earn money for college and also do well in high school to qualify for scholarships. The result would be more students graduating without debt and feeling less pressure to take the first job available. Then, the money that today’s grads apply to student loans could instead be invested in retirement plans.

The Author

Rick Kahler, Certified Financial Planner®, MS, ChFC, CCIM, is the founder and president of Kahler Financial Group in Rapid City, South Dakota. In 2009 his firm was named by Wealth Manager as the largest financial planning firm in a seven-state area. A pioneer in the evolution of integrating financial psychology with traditional financial planning profession, Rick is a co-founder of the five-day intensive Healing Money Issues Workshop offered by Onsite Workshops of Nashville, Tennessee. He is one of only a handful of planners nationwide who partner with professional coaches and financial therapists to deliver financial coaching and therapy to his clients. Learn more at KahlerFinancial.com

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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