“During my year in business school, I learned two different methods for improving modes of production, Kaizen and Lean Six Sigma,” says Sam Goldberger, MD, MBA in his book A Method That Works: How to Take Your Ophthalmology Practice to the Next Level and Have More Time for Tennis. “I desperately wish I had known them while I was running my practice” before, he adds. Both approaches are common in manufacturing, but they can be adapted to service industry contexts like medical practices.
When World War II ended, allied forces stayed behind in Japan to help rebuild a decimated country. The Americans there witnessed Japanese businesses applying the Kaizen as they worked to rebuild themselves. Kaizen means “change for the better” in Japanese, and refers to standardized processes that are continuously tested and refined to eliminate waste and boost quality. You may have heard of Kaizen because it was part of The Toyota Way.
More recently, we began to see it in hospitals, where it was also dubbed “continuous performance improvement” or CPI. Hospitals and health systems have achieved huge savings simply by refining surgical instrument sterilization procedures, purchasing generic surgical markers instead of Sharpies because they’re only used once per patient, improving patient flow, and so on. Practices don’t see quite the raw dollar impact because of the smaller scale, but you can make changes that affect your overall profitability.
You and your staff need emotional intelligence to apply Kaizen in ways that benefit your practice. “It’s all about mindset,” Dr. Goldberger explains. “If you and your staff operate under the assumption that everything can always be improved, and should be, through a series of small steps, then everyone’s work will reflect that understanding.” If your staff doesn’t buy in, Kaizen could be much more difficult.
Lean Six Sigma is a subset of Kaizen, and it’s all about reducing waste. In the medical practice, “waste tends to take the form of patients waiting to be helped, misuse of exam rooms or ASC operating room space, and overlapping staff functions,” Dr. Goldberger explains. What Lean is not about is cutting corners on patient experience. Some practices make this mistake, and patients end up feeling like cogs in an assembly line. If they feel this way, they will leave or worse, leave unfavorable reviews of your practice on sites like Healthgrades® and Yelp. Instead, Lean is about making changes that are neutral to patient experience or even improve it.
Intelligent Ideas: Don’t be the genius with a thousand helpers. To elicit the best ideas, inspire genius in others.
To jumpstart a Lean culture, explain the concept and collect cost savings ideas from all employees—they can submit as many as they want over a two-week period with their names. Have a small selection committee identify best ideas that you want to try at your practice. Celebrate the best ideas with a staff celebration or coffee gift certificates for the winners, for example. If someone submits an original idea that results in significant cost savings when you try it, reward the individual or team with a performance bonus once you see results in your financials.
To learn more about counting and cutting your costs with Kaizen, LEAN Six Sigma, Value-Stream Mapping, 5S, Traction-inspired KPI system for staff, equipment leases and financing—pick up your copy of Financial Intelligence for Physician Practices.