Pretty stunning figure, eh? Also pretty easy to achieve, if we just think very slightly out of the box and make a commitment.
Most people continue to think that budgeting, service return, and the like is a zero sum game. To get more services you must pump in more money, or to save money you must cut services. Lean concepts disprove that erroneous concept every day.
But $1 trillion?
In 2008, U.S. health-care costs exceeded $2.4 trillion and are expected to climb to $3.1 trillion by 2012, according to The National Coalition on Health Care. As a health-care quality consultant, I know that 25-40 percent of these costs are caused by delay, defects and deviation. That's $600 billion to almost $1 trillion dollars a year in unnecessary costs. And that's just the cost to the health-care industry; it doesn't include the cost to society, which is perhaps 10 times higher.
While most visits to the ER take two hours or more, Robert Wood Johnson University Hospital in New Jersey does it in 38 minutes on average. They offer a 30-minute door-to-doctor guarantee. They did it by rethinking the emergency experience from the patient's point of view.
I worked with one company that found ways to reduce denied claims from a single insurer and start reaping an extra $330,000 a month.
The solution is simple. The methods of lean manufacturing can be applied to health-care.
Rule No. 1: Walking is waste. When medical facilities are redesigned to prevent unnecessary movement of clinicians and patients, patient flow improves. When you stop watching the doctors and nurses and focus on how long the patient is waiting for the next step in their care, it's easy to see how to improve the process. But doctors and nurses have to be willing to trade 100 years of tradition for progress.
Rule No. 2: By focusing on the 4 percent of the health care that causes 50 percent of the delay, defects and deviation, health care could easily boost quality, cut costs and increase profits without breaking a sweat. But everyone from the CEO to the cleaning crew has to be on board with the effort. America voted for change, but I have found that most people want someone else to change; they don't want to have to change.
This is a huge opportunity and the time is right. We have a new President committed to change, and an electorate that voted for him. Now we just have to think outside of the box, forget the zero sum mindset, use known and proven principles and methods, and improve.