Hospitals See Benefits of Lean and Six Sigma

Contact:
Christel Henke
414-332-2933
chenke@hansondodge.com

ASQ Releases Benchmark Study Results

Milwaukee, Wis., March 17, 2009 — Hospitals across the United States are beginning to embrace lean and Six Sigma business management strategies in attempts to reduce costs and improve productivity, according to a new national benchmarking study by ASQ. The ASQ Hospital Study, to which 77 hospitals responded, is the first study to investigate the implementation of lean and Six Sigma in U.S. hospitals.

While applied in manufacturing extensively—and applicable to all industries—these management methods have moved into healthcare recently, but with little substantive data available for hospitals to assess the worth of the methods. Lean emphasizes removing waste from organizations and processes while focusing on and delivering more value to customers. Six Sigma focuses on variation reduction in processes, products and services.

According to the ASQ study, 53 percent of hospitals report some level ("minor," "moderate" or "full") of lean deployment, and 42 percent of hospitals report some level of Six Sigma deployment. Few hospitals participating in the study report "full deployment" of either lean (4 percent of hospitals) or Six Sigma (8 percent). The reasons that neither method has been deployed in hospitals include: the need for resources (59 percent of hospitals), lack of information (41 percent), and leadership buy-in (30 percent). Eleven percent of hospitals surveyed were not familiar with either method.

"During these turbulent economic times when healthcare costs continue to rise, it is crucial that U.S. hospitals look to methods like lean and Six Sigma to become more efficient, said Dr. James Levett, chair of ASQ’s Healthcare Division and chief medical officer for the Physicians’ Clinic of Iowa. "This study indicates that many healthcare systems are still in the ‘infancy stage’ when it comes to using these vital cost-cutting tools."

Reasons hospitals use lean and/or Six Sigma

Primary factors that hospitals deploy lean and/or Six Sigma are:

Lean:

  • Improving hospital throughput (73 percent of hospitals)
  • Business/cost need (68 percent)
  • Quality need (56 percent)

Six Sigma:

  • Business/cost need (69 percent of hospitals)
  • Quality need (62 percent)
  • Improving hospital throughput (41 percent)

Hospitals report the biggest challenges in implementing lean or Six Sigma include sustaining improvements, competition from other initiatives, leadership commitment and availability of resources. Hospitals surveyed report a median investment of $25,000 for their 2007 lean initiatives and a median investment of $96,485 for their 2007 Six Sigma initiatives.

Top areas for lean and/or Six Sigma, and success of efforts

Hospitals were asked to identify the departments where lean and/or Six Sigma have been deployed, as well as the general rate of success for those efforts. While the data returned is for a small sample of hospitals that have actually deployed Six Sigma and lean (and, thus, statistically has a wide margin of error), it nonetheless provides a starting benchmark for the industry for location of efforts and potential for returns.

The locations most likely to have lean and/or Six Sigma in place are:

Clinical deployment

  • Lean: Surgery/operating room (61 percent of hospitals) and emergency (60 percent)
  • Six Sigma: Emergency (72 percent) and surgery/operating room (66 percent)

Ancillary/support services deployment

  • Lean: Admissions/discharge (43 percent) and radiology/imaging (43 percent)
  • Six Sigma: Admissions/discharge (56 percent) and radiology/imaging (53 percent)

Non-clinical/support deployment

  • Lean: Purchasing/supply (36 percent), information systems (24 percent) and administration (24 percent)
  • Six Sigma: Purchasing/supply (53 percent), information systems (24 percent) and maintenance (22 percent)

Hospitals deploying in the following areas report the following success rates:

Clinical success ("somewhat" or "highly" successful)

  • Lean: Operating rooms (95 percent of hospitals) and emergency rooms (86 percent)
  • Six Sigma: Operating room (95 percent) and in-patient areas not including mental health, rehab or ICU (95 percent)

Ancillary/support services success ("somewhat" or "highly" successful)

  • Lean: Admissions and discharge (94 percent) and sterilizing/reprocessing (89 percent) and radiology/imaging (87 percent)
  • Six Sigma: Admissions and discharge (90 percent), radiology/imaging (89 percent) and pharmacy/pharmaceutical services (88 percent)

Non-clinical/support success ("somewhat" or "highly" successful)

  • Lean: Information systems (89 percent) and administration (87 percent)
  • Six Sigma: Administration (100 percent) and information systems (91 percent)

About the ASQ Hospital Study

Seventy-seven hospitals across the United States responded to the ASQ Hospital Study via an online questionnaire, with results received and compiled by a partnership of two independent research organizations, the MPI Group and Industry Insights. Note: Overall study responses provide a confidence interval of approximately ±11 at a 95 percent confidence level; subquestions for only lean and/or Six Sigma deployers are less statistically significant, but all study analysis provides a range of benchmarks for hospitals considering lean and/or Six Sigma.

About ASQ

ASQ, www.asq.org, has been the world’s leading authority on quality for more than 60 years. With more than 90,000 individual and organizational members, the professional association advances learning, quality improvement and knowledge exchange to improve business results and to create better workplaces and communities worldwide. As champion of the quality movement, ASQ offers technologies, concepts, tools and training to quality professionals, quality practitioners and everyday consumers, encouraging all to Make Good Great®. ASQ has been the sole administrator of the prestigious Malcolm Baldrige National Quality Award since 1991. Headquartered in Milwaukee, Wis., ASQ is a founding partner of the American Customer Satisfaction Index (ACSI), a prominent quarterly economic indicator, and also produces the Quarterly Quality Report.

MEDIA NOTES:

To schedule interviews with Dr. James Levett, ASQ Healthcare Division chair and chief medical officer for Physician’s Clinic of Iowa; or John Brandt, CEO of MPI Group or one of the participating hospitals in the study; and to request a fact sheet including more information on the ASQ Hospital Study including hospital demographics, please contact Christel Henke at chenke@hansondodge.com or 414-332-2933.

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