Health systems need to change how they look at waste to reduce costs, expert says

By | June 28, 2020

Health systems need to rethink how they view wasteful practices to reduce costs, according to Rhonda Stewart, the senior transformation sensei at the Virginia Mason Institute.

“What I want to talk about is to hopefully inspire [health systems] to think about reducing costs differently,” she said in a session at the Healthcare Financial Management Association digital Annual Conference. “Not to do the same old thing that we’ve always doneā€¦ but by really having focused improvement activities that eliminate waste.”

Eliminating waste can be done in any of the processes of a healthcare system, according to Stewart. It can be done within financing, administration and in the hospitals and clinics themselves.

Finding waste is the first step. In order to do so, Stewart prompts health systems to ask themselves questions such as:

  • What costs can be avoided? What projects could be delayed?
  • What could have long-term cost savings? What are the quick wins?
  • Are the right people doing the work? Have our staffing models changed?
  • Can we make decisions quickly? Do we have a culture of problem-solving?
  • How are we using our space? Are we innovative?
  • Is a process to complex? How can we simplify it?
  • Is a process repetitive? Can it be automated?

Another strategy to find waste within an organization is to physically search it out. Stewart recommends going on “waste walks.” These can serve as practice for looking at how things operate differently to spot waste.

“Go look in your area, whether that’s patient-financial services, accounting, payroll, accounts payable,” she said.  “What are the wastes that you’re finding?”

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For an organization to create an innovative environment, leaders need to be open to change.

“They need to allow those ideas to come up from the staff,” Stewart said. “The staff, doing the work, they know what that burden of work is. They know where those wastes are. They know where the costs are.”

Once a wasteful practice is found, Stewart urged leaders to be mindful of their employees when approaching them.

“This is a sensitive topic,” she said. “Sometimes the word ‘waste’ doesn’t really sit well with people. So we want to make sure that we are being respectful, we’re listening to understand, we’re asking the right questions, or we’re quietly just listening and watching.”

From there, the entire team needs to be on board and filled in on the new strategies that have been put in place to avoid waste.

“I saw that with COVID,” Stewart said. “I saw that it was an all-hands-on-deck. There were people in clinical and non-clinical areas doing work they’d never done before.”

After a system has found the waste and worked together to eliminate it, the final step is to prepare for the future.

“Where are you going to go after COVID?” Stewart said. “What’s the next step? If there’s a second wave, how are you going to manage that? How can we improve things today so we can get ready for the future?”

Systems can do so by making annual goals that are tied to each department and member of the staff.

That way, every part of the team can ask “how am I helping remove waste and decrease the cost and improve the efficiency in our organization?”

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