Waste and Cost Control

Posted on February 15, 2012

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In December’s Architect, an article on Crisis Response Centers caught my eye. The renderings and photos were bright, the designs cool and, of course, it was about healthcare. The general theme was cost containment in light of buildings that need to last in a healthcare environment.

A couple paragraphs into the story was the first quote of the article, by Henry Chao, an architect and principal at HOK, regarding keeping building costs under control:  “The best way to control costs is to reduce waste.  Waste comes from medical error. Your best bet is to create the best care in the first go-round.”

I agree with two of Mr. Chao’s three sentences, but the one I disagree with I disagree with so much it really negates my support in his overall point. His statement that “waste comes from medical error” is not remotely true. Medical error can create unnecessary cost (among other things). Medical errors are also potentially dangerous, ineffective care, which can be construed as a type of waste. But medical error does not generate waste.  Waste is a byproduct of an inefficient system, and medical error is a byproduct of an inefficient treatment system.  Medical error is a result, not a cause.

Let me channel Lean thinking here to recap the 7 Wastes, which are specific to processes, like design and construction, or like the treatment processes at work in a hospital:

  1. Overproduction
  2. Motion
  3. Inventory
  4. Transportation
  5. Waiting
  6. Defects
  7. Overprocessing
  8. Underutilized People (unofficially #8, but not included in Lean orthodoxy)

The presence of any of these items suggests waste, and therefore opportunity for cost savings.  David Chambers provides a good summary for those who want to brush up on Lean, which is focused on reducing waste.

Number six above, Defects, is where medical error falls in. Medical error is a defective outcome, which is the antithesis of efficiency and a Lean process. Defects require a “redo” or “rework” to receive an acceptable and useful outcome, and are a type of waste.

Mr. Chao could have been misquoted for the article, but now that Mr. Chao’s erroneous statement is clarified, I agree whole-heartedly with his belief cost control is best done through the elimination of waste. In speaking with a Lean expert for healthcare clients, the consultant related there is so much waste in hospital processes he routinely accomplishes “30% savings without even trying”. The savings through Lean is particularly valuable because it is efficiency savings that immediately registers with the hospital via:

  • Productivity (more work in less time)
  • Quality (less duplication of work; less need to redo)
  • Staffing (same work by less people)
  • Facility (more throughput in same space – for an existing hospital, or same throughput in less space – for a new hospital design)

These concrete savings also help more subjective measurements important to hospitals, like patient safety and satisfaction, and crucial risk management issues like infection control—all of which affect revenue.

The reduction of medical waste is a laudable and forward-thinking goal for an architect, and something we definitely can positively affect on some level. However, identifying waste and understanding cause and effect in a system is crucial to design success. Let’s rely on established Lean analysis to help eliminate waste and provide more affordable, robust, and lasting design for crisis response centers and other facilities of healthcare excellence.

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Posted in: Lean Design