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example lean health care

Health care funding varies significantly around the world. It is also an emotional and deeply
political issue. In many European countries (e.g. the UK) some people shudder at the thought
of private companies profiting from providing health care. However, some claim that private
health care companies can have advantages. First, they are more likely to make services provi-
sion more efficient because they benefit directly from the savings. Second, they are better at
persuading their staff to embrace innovation. Third, it is in their interests to spread the adop-
tion of new ideas. One health care operation that is cited as demonstrating these advantages
is Stockholm’s Saint Goran’s Hospital, which is run by a private company, Capio. Yet, for the
patient, St Goran’s is the same as any other Swedish public hospital. St Goran’s gets nearly all
its money from the state and treatment is free, apart from the small charge that is charged at
all Swedish hospitals.
This is the setting for one of the more successful examples of lean management in health-care
services. Britta Wallgren, the hospital’s chief executive and an anaesthetist by training, admits
that she never heard the term ‘lean’ when she was at medical school, yet now it is the central
philosophy driving St Goran’s approach to organising its medical care. The hospital’s lean con-
cept is based on the two lean principles of ‘flow’ and ‘quality’. It has reduced waiting times by
increasing throughput. Everything is done to try to ‘maximise throughput’, so as to minimise
cost and ‘give taxpayers value for money’. Nor should hospitals be in the hotel business, they
say. So, to minimise the time patients spend in hospital, they invest in preparing patients for
admission and providing support after they are released. Before the adoption of lean principles,
doctors and nurses used to ‘work in parallel’; now they work together in teams. No longer do
staff concentrate exclusively on their field of medical expertise, they are also responsible for
suggesting operational improvements. The drive to save costs also runs to how patients are
treated. The hospital has been called the medical equivalent of a budget airline. There are four
to six patients to a room and the décor is ‘institutional’ rather than opulent. Similarly, staff are
included in establishing improved working practices, many of which are relatively ‘low tech’.
For example, staff used to waste valuable time looking for equipment such as defibrillators. Then
someone suggested marking a reserved space on the floor with yellow tape and insisting that
the machines were always kept there.
Of course, none of these ideas is new. Even in health care there are several examples of lean
principles being used to increase throughput, reduce waste and keep costs down while main-
taining (or improving) quality. The question here is whether the strategic funding decisions
made by the Swedish government are, at least partly, responsible for its successful deployment.
Sweden has gone further than other European countries in using state funding to buy pub-
lic services from whichever providers, public or private, offer the best combination of price
and quality. Yet there are plenty of examples of publicly funded providers who have adopted
lean. And that is the point. The argument is not so much about the effectiveness of lean as an
operating philosophy. Rather, it is about the relationship between how a health care system
is organised strategically, and the system’s ability to effectively use important, but essentially
operational, ideas such as lean.

business process reengineering (bPR)

Business process reengineering (BPR) originated in the early 1990s when Michael Ham-
mer proposed that rather than using technology to automate work, it would be better
applied to doing away with the need for the work in the first place (‘don’t automate,
obliterate’). In doing this he was warning against establishing non-value-added work

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