Faculty Guest Post: Using an Operations Management Focus to Improve Healthcare

The challenges facing our healthcare system are well documented.  Simply put, U.S. healthcare costs are too high, while providing performance at levels that are often lower than those in other countries.  The system is far from efficient.  While legislative efforts to tackle this problem continue to make headlines, there are additional approaches from the business world that can also offer significant benefits.

For decades, manufacturing firms around the world have worked hard to improve their efficiency and effectiveness.  Productivity has risen steadily through changes in technology and management techniques.  And so has the standard of living.  This march has its roots in the industrial revolution, and has continued through such techniques as Lean and Six Sigma improvement programs.  But what does a manufacturing plant have to do with running a hospital better?

Increasingly, attention has been paid to trying to transitioning decades of learning about processes and operations into this realm. I’ve recently led with a team as we translated and applied the core ideas of Lean and similar lessons from the acclaimed Toyota Production System into the management of Healthcare processes.  Obviously the environments are VERY different.  But when care is taken to examine the activities in healthcare like a process that can be managed and improved, there is a lot of low hanging fruit!

Similarly there are tremendous opportunities to transfer other frameworks and lessons from manufacturing decision making into hospital operations, providing insight and direction into how to most effectively manage the process of healthcare delivery.  The goal is not to impact the clinical procedures (i.e. how and when medical procedures should be administered), but rather, to methodically examine the processes and decisions surrounding these procedures with an eye on improving outcomes such as length of patient stay, costs, and mortality rates.

This examination of the operations of healthcare explores the impact of different structural and infrastructural decisions on performance.  What are the performance benefits (if any) of specialty – focused hospitals?  When investing in healthcare IT systems, what type of technology is most beneficial?  Should some system types be implemented before others to achieve the most benefits?  The field of healthcare is in need of help, and there is a great opportunity to provide solutions to real problems by using an operations view to examine the challenges we face in this important and exciting field. 

Christopher M. McDermott is an associate professor at the Rensselaer Lally School of Management