International productivity expert Blanton Godfrey predicts health reform will produce a lot of “big winners and big losers” among the nation’s 5,000-plus hospitals.
Godfrey, who co-founded the Institute for Healthcare Improvement, recommends hospitals take a page from industry and concentrate on workflow improvement in order to be in the winner’s circle.
“Better flow is the reason Toyota was producing a car in the late 1980s at 30 percent less labor cost than Mercedes because they focused on process,” he says, adding that he had “watched parts for Panasonic VCRs come off the truck and out the other end as finished products in two hours flat.”
“This is a time of rapid change, and rapid change produces big winners and big losers. What we’re really talking about is how do we manage the flow from the time the person comes into a hospital until the time the person goes out and how to make this work better?”
With cutbacks in staff and services having reached a point of diminishing return, more hospital managers are embracing a trend used by industry and commerce – the “real-time enterprise” – to streamline flow, care for more patients, and drive rapid revenue increases.
Real-Time Capacity Management™ automates a hospital’s functional operations and powers live information to the entire hospital in an easy-to-read summary format on such things as patient tracking, staff locating, asset management and critical workflow process improvement. Everything can be presented on graphics-rich “digital dashboards” that provide executives, managers, and placement specialists with a live “motion picture” of their institution. Using that information in real time – decision-makers can increase patient throughput and revenue while maintaining high quality care delivery.
For example, Methodist Healthcare System of San Antonio, Texas increased transfer volume by 300 percent in a year and a half. That improvement alone accounted for more than a quarter of the system’s $78 million margin contribution for the period.
The volume increase was the result of a concerted effort to automate and centralize patient logistics, optimize patient flow and manage all capacity in the eight-hospital system from a single location.
In the decade ahead, the ability to better use existing resources will be critical. Optimizing hospital operations is perhaps the most immediate way to improve margin and control increased demand for access.
These next-generation systems promise to deliver bottom line impact that may be greater and more immediate than the conversion to EMRs, and much less expensive. According to venture capitalist Vinod Khosla, the man widely credited with inventing the term “real-time,” every one percent of revenue spent on real time should return 1.5 to two percent in revenue increases.
In healthcare, the payoff also includes better infection control, faster transfers, and most importantly, better patient outcomes.
For a full copy of “Real-Time” Health Reform: Using capacity more efficiently may be the fastest way to generate hospital revenue”, our Executive Briefing from Becker’s Healthcare Review, click here.