A prescription for hospitals

An article in the Boston Globe lays out a way for hospitals to run like a Toyota manufacturing plant. Patients, staff, and doctors at Cincinatti Children's Hospital love it.

Good flow keeps costs down and customers happy.

In hospitals, nobody expects - or even wants - “fast” care, but everyone in the building benefits when the flow of patients from one part of the system to another is smooth. Backups in one part of the hospital can cause backups in others, leaving, for example, patients sitting for hours in the waiting room or highly trained surgical teams cooling their heels with no patient. A smoothly flowing hospital saves time and money, but it also reduces stress on the staff and the risk of mistakes.

Unfortunately, the typical US hospital is a model of bad flow: The average emergency room wait, for example, is four hours. The problem is actually quite simple, Litvak says. Nearly every department is run separately, making today’s hospital a nest of competing kingdoms rather than a smooth-running, cooperative organization. Hospitals often have limited power over doctors, who can schedule patient appointments without regard to the hospital’s needs. Effectively, one of the most important industries in America is in the hands of people who, for all their talents, have little expertise at running a business.

As a result, Litvak says, American hospitals only think they’re overcrowded because they have a chronic problem managing their flow. Patients simply pile up at certain times. In 2006, for instance, US hospitals were typically only 65 percent full, far less crowded than the 84 percent occupancy in Britain and the 90 percent occupancy of Canadian hospitals. But when US hospitals get much more than 65 percent full, the whole system starts to become stressed. Then, to boost their capacity, hospitals expand, at an average cost of $1 million per new bed.