International Journal of Health Care Quality Assurance

Lean practices for quality results: a case illustration

Pauline Hwang David Hwang Paul Hong

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Lean practices for quality

results: a case illustration

Lean practices
for quality
results

Pauline Hwang
Department of Nursing, Pennsylvania State University, Hershey,
Pennsylvania, USA

729

David Hwang
Department of Finance and Supply Chain Management,
Shippensburg University of Pennsylvania, Shippensburg,
Pennsylvania, USA, and
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Paul Hong
Department of Information Systems and Operations Management,
University of Toledo, Toledo, USA

Abstract
Purpose Increasingly, healthcare providers are implementing lean practices to achieve quality
results. Implementing lean healthcare practices is unique compared to manufacturing and other
service industries. The purpose of this paper is to present a model that identifies and defines the lean
implementation key success factors in healthcare organisations.
Design/methodology/approach The model is based on an extant literature review and a case
illustration that explores actual lean implementation in a major USA hospital located in a Midwestern
city (approximately 300,000 people). An exploratory/descriptive study using observation and followup interviews was conducted to identify lean practices in the hospital.
Findings Lean practice key drivers include growing elderly populations, rising medical expenses,
decreasing insurance coverage and decreasing management support. Effectively implementing lean
practices to increase bottom-line results and improve organisational integrity requires sharing goals
and processes among healthcare managers and professionals.
Practical implications An illustration explains the model and the study provides a sound
foundation for empirical work. Practical implications are included. Lean practices minimise
waste and unnecessary hospital stays while simultaneously enhancing customer values and
deploying resources in supply systems. Leadership requires clear project targets based on
sound front-end planning because initial implementation steps involve uncertainty and ambiguity
(i.e. fuzzy front-end planning). Since top management support is crucial for implementing
lean practices successfully, a heavyweight manager, who communicates well both with top
managers and project team members, is an important success factor when implementing lean
practices.
Social implications Increasingly, green orientation and sustainability initiatives are phrases that
replaced lean practices. Effective results; e.g. waste reduction, employee satisfaction and customer
values are applicable to bigger competitive challenges arising both in specific organisations and
inter-organisational networks.
Originality/value Healthcare managers are adopting business practices that improve efficiency
and productivity while ensuring their healthcare mission and guaranteeing that customer values are
achieved. Shared understanding about complex goals (e.g. reducing waste and enhancing customer
value) at the front-end is crucial for implementing successful lean practices. In particular, this study
shows that nursing practices, which are both labour intensive and technology enabled, are good
candidates for lean practice.
Keywords Quality management, Assessment, Process management, Quality healthcare,
Lean practices, Fuzzy planning, Shared vision, Clear goals
Paper type Research paper

International Journal of Health Care

Quality Assurance
Vol. 27 No. 8, 2014
pp. 729-741
r Emerald Group Publishing Limited
0952-6862
DOI 10.1108/IJHCQA-03-2014-0024

IJHCQA
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730

Introduction
Increasingly, researchers note the major challenges facing the US healthcare system,
which include rising costs, mounting quality challenges and threats to organisational
integrity (Waring and Bishop, 2010; Landsbergis et al., 1999). Constrained health
insurance coverage is problematic in an accelerating healthcare cost context (Gowen
et al., 2006). However, merely controlling healthcare costs creates rather than resolves
healthcare complexity. Growing consumer demand for comprehensive care and shifting
government policies affect healthcare. Rising healthcare cost causes are diverse and
include aging populations, expensive diagnostic tests and treatments, and densely
crowded megacities (Dillon and Prokesch, 2010). Between 1990 and 2009, national health
expenditure increased from $724 to $2,486.3 billion and even with comprehensive
healthcare reform, the overall cost effects are unclear (National Center for Health
Statistics, 2011; Ding, 2014). Growing elderly populations and reduced health insurance
coverage are grave concerns for American families. Naturally, efficiency and
productivity pressures are mounting (Gowen et al., 2006; Dillon and Prokesch, 2010;
Elg et al., 2011). In this context, healthcare managers employ lean practices to reduce
costs, enhance patient quality and safety, avoid waste and enrich jobs (Koning et al.,
2006; Elg et al., 2011; Varkey et al., 2007). However, implementing lean practices is not
a simple matter; the challenges involved in healthcare are unique compared to
manufacturing and other service industries. It is crucial for healthcare providers to better
understand lean implementation in complex situations beyond the operational level. It is
unclear how managers develop shared vision and understanding fuzzy front-end
planning and what specific steps are needed to implement lean practices effectively
(Rauniar et al., 2008; Yang et al., 2011). Thus, our aim is to present a research model that
defines key lean implementation success factors in healthcare organisations.
Literature review
Adopting lean quality practices is a strategic imperative for many healthcare providers
(Long et al., 2008; Towill, 2009; Esain et al., 2012). Lean practices are defined processes
that maximise customer value while minimising waste (Endsley et al., 2006; Koning
et al., 2006); i.e. lean practices create customer value using fewer resources. Toyotas
lean practices for meeting complex performance requirements are well established
(Tomino et al., 2009; Yang et al., 2011). Successful examples inspired many healthcare
providers to adopt lean practices in their organisations. The lean practice ultimate goal
is to achieve organisational efficiency and greater productivity while providing quality
services at lower cost (Koning et al., 2006; Shook, 2009; Smart et al., 2003); i.e. managers
optimise product flow across technologies, assets and departments (Womack and
Jones, 2005/2009). Since lean practices were developed and implemented in manufacturing
industries, effective implementation in the healthcare sector has required communication
and shared understanding about lean practices among employees and key shareholders
(Worley and Doolen, 2006). Lean principles that reduce waste include: specifying
customer value, identifying value streams, creating flow processes, highlighting
demand and prioritising problem resolution (Waring and Bishop, 2010; Yang et al.,
2011; Staats et al., 2011). Various lean studies tend to focus on efficiency; e.g. the
Virginia Mason Medical Center staff in Seattle, Washington report that radiation
oncology staff cut the time from when patients check in to the time they leave the
department from 42 to 15 minutes after lean practices were introduced (Panchak, 2003).
LaGanga (2011) reports a 27 per cent increase in service capacity and a 12 per cent
reduction in the no-show rate after implementing lean. Analysing 876 US hospitals

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also shows that clinical quality capability reduces adjusted length of stay (LoS) and that
the conformance accorded by standardized clinical practices improves healthcare
stability and reliability (Nair et al., 2013). These examples suggest that lean practices are
beneficial from a productivity standpoint. However, in dynamic healthcare systems, lean
practices are receiving mixed responses. Healthcare managers focus on organisational
productivity, while healthcare professionals expect improved service quality (Panchak,
2003; Popescu et al., 2011). The challenge is to understand how healthcare professionals
view lean practice; nurses in particular are in a good position to examine lean practices
and their impact owing to their direct care role and their awareness of productivity
requirements in a labour-intensive field (Hodgkinson et al., 2006; Long et al., 2008).

Lean practices
for quality
results
731

Organisational process for lean practice implementation

Increasing healthcare costs requires eliminating waste and working towards effective
resource management. Yet, healthcare providers, unlike manufacturers, serve the
needy, sick and dying. They are not merely producing tangible products; their purpose
is to ensure quality care for people who are suffering. Thus, it is important to
address complex issues related to lean implementation. Our study explores three lean
implementation aspects: shared vision, fair implementation processes and outcomes.
In the organisational literature, shared vision is crucial when implementing strategic
and operational initiatives such as lean practices. Senior managers should clarify their
organisational goals and reduce uncertainty in leans early planning stages (Hong et al.,
2004). Medical doctors may feel that patient care is the first priority while managers
naturally consider cost implications. Lean management is by nature an organisational
change initiative. Many process aspects remain ambiguous and uncertain when
starting any major organisational change. Thus, avoiding fuzzy planning requires staff
to examine, discuss and clarify the projects nature, scope and outcomes among diverse
cross-functional participants in the early stages (Doll et al., 2010; Rauniar et al., 2008).
Communicating lean practices allows leaders to gain a shared understanding about the
implementation processes and outcomes (i.e. shared vision). The more frequently and
clearly organisational goals are shared among the senior managers and professional
staff as a common vision, the more likely individual employees understand, accept
and commit to the project (Locke and Latham, 1990). Successful organisation-wide
implementation also requires key stakeholders to be represented fairly and participate
meaningfully in decisions regarding implementation timing, rules, roles and
responsibilities, and key deliverables (Kim and Mauborgne, 2003; Hong et al., 2011).
Such fair implementation processes allows staff to resolve conflicts (e.g. how and where
to allocate resources), promote teamwork and move towards shared goals.
Figure 1 shows a conceptual framework for effective shared vision and integrative
leadership. Our study examines how effective integrative implementation enables
healthcare providers to achieve comprehensive lean practices. Effectively implementing
lean practices requires fair processes that involve sharing management plans, benefits
Effective Integrative Implementation Mechanism

Shared Vision
of
Lean Practices

Fair
Implementation
Process

Lean Practices
Comprehensive
Outcomes

Figure 1.
Shared vision and due
process for lean practice
effectiveness

IJHCQA
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732

and costs associated with implementation. It also involves sharing potential challenges,
opportunities and expected outcomes among cross-functional team members (Kim and
Mauborgne, 2003). Such interactive information-sharing practices enable project team
members to gain a clear understanding, develop shared goals and maintain flexibility
with changing roles (Doll et al., 2010; Youn et al., 2012a). Lean aims to improve more
than a single performance measure, such as reduced cost or increased productivity.
Rather, the desirable outcomes are organisational competitiveness through waste
reduction, quality patient care and satisfied healthcare professionals. Thus, the lean goal
is comprehensive and includes financial and non-financial measures (OHolleran et al.,
2005; Panchak, 2003; Paul, 2006; Peltier et al., 2009).

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Lean implementation process

Figure 2 shows the implementation process. Lean practices involve Plan-Do-CheckAdjust (PDCA) cycles (Baker et al., 2009; Liker and Franz, 2011). PDCA is a four-phase
continuous improvement model. The cycle is continuous and iterative and designed to
meet changing needs and customer expectations, providing products and services that
are valuable to customers:
.

Plan represents an opportunity to design a change by gathering basic knowledge

and information.

Do is observing and analysing current processes, designing an improved process

and testing the change.

Check means reviewing the change, monitoring the outcome and evaluating
the results.

Adjust means modifying and making improvements as needed.

If the change did not produce the desired results then the cycle begins again (Beloff
et al., 2005; Baker et al., 2009).
In healthcare, the PDCA cycle is implemented to achieve the following goals: reduce
cost; increase patient satisfaction and enhance employee satisfaction.
Reduce cost
For decades, US hospitals have been known for their high costs (Porter and Teisberg,
2006; Ding, 2014). Various legislative actions are related to reducing healthcare costs to
make services affordable (Paul, 2006; Oh, 2011; Groszkruger, 2011). Therefore, it is

Adjust

Plan
Continuous
Learning and
improvement

Figure 2.
Lean practice cycles for
sustainable learning
and improvement

Check

Do

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natural for healthcare managers to explore ways to decrease their waste, increase
productivity and increase efficiency. Reducing cost is the main reason for adopting lean
practices for many healthcare managers.
Increase patient satisfaction
Wadhwa (2002) states that influencing patient perception is increasingly recognised in
healthcare systems. Patient perception is positively linked to their healthcare quality
perceptions. She also stresses that when patient perceptions are positive, their clinical
experience and outcomes are more likely to be positive. She examined four areas that
consumers most appreciate, which influence healthcare outcomes: information access,
provider relationship, information availability and participation. Improving access by
providing convenient, culturally sensitive programmes in prenatal care; improving
physician-patient relationships and interactions; providing patients with relevant and
useful information and allowing consumers to direct their own healthcare all positively
influences patient healthcare outcomes. Berczuk (2008) emphasised wastes meaning
in lean practices specifically, wasted time and motion. Eliminating wasted time and
motion increases efficiency, productivity, employee and patient satisfaction. Patient
satisfaction and successful hospital outcomes are correlated; i.e. OHolleran et al. (2005)
investigated the relationship between patient satisfaction and positive outcomes.
High patient satisfaction is highly related to lower stays and high-quality care. Lean
practices can help ensure positive outcomes for patients; therefore, it is important and
better to communicate lean practice outcomes as patient satisfaction.

Lean practices
for quality
results
733

Increase employee satisfaction

Increasing patient satisfaction is also a lean goal. Employee satisfaction is deeply related
to patient satisfaction, while Peltier et al. (2009) state that employees have a critical
role in organisational performance enhancement. Employee engagement and satisfaction
are highly correlated with customer satisfaction and overall customer experiences.
Unsatisfied healthcare employees negatively affect care quality, which adversely affects
patient satisfaction and loyalty to a hospital (Atkins et al., 1996; Al-Mailam, 2005).
Therefore, when patient satisfaction increases, employee satisfaction also increases,
thus benefitting patients and staff. Table I presents St Marys Hospital outcomes
specifically, employee satisfactions relationship to lean practices (Hickman, 2010).
Table I shows that as employee satisfaction increases, patient satisfaction also
increases. Therefore, employee satisfaction also should be another important goal when
implementing lean practices. However, there are mitigating factors associated with lean
practices. Leaders roles within healthcare organisations are fundamental factors for
sustaining the organisational mind-set required to promote and maintain lean practices.
Unfortunately, top managers may not adequately understand the lean practices nature
and benefits. Lamming (1996) suggests that a truly lean system requires space to
Indicator
ALOS
Overtime (%)
Turnover (%)
Employee satisfaction
Patient satisfaction (%)

February 2007

March 2009

January 2010

4.50
3.20
16.00
3.53
18.4

3.72
2.60
1.60
4.73
77.9

3.55
2.00
4.55
4.70
99.4

Table I.
Outcomes

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734

experiment, time to think and measure bottom line performance. Therefore, instead of
adopting lean practices as a system-wide project, many top leaders have treated it lightly.
Case illustration
A single case study is useful in certain contexts. In the healthcare sector in particular,
a single case study is adopted when a subject requires comprehensive investigation from
multiple perspectives (Yin, 2003). The method is often appropriate for examining how
complex, e.g. lean, practices are implemented in a hospital system. Lean practices require
cross-functional involvement because waste reduction requires system-wide efforts
(Yang et al., 2011). At the same time, lean practices require champions that bridge
front-end organisational processes and back-end organisational processes; e.g. in
cross-functional product development, the design engineers role is considered crucial in
bringing marketing and operations together in a manufacturing setting (Hong et al.,
2012; Doll et al., 2010). Thus, to implement lean practices successfully, healthcare
providers should share how lean practices can work in their organisation. Additionally,
fair implementation processes are required, such as clarifying targets and strengthening
leadership. Implementing lean practices successfully brings effective outcomes in the
healthcare sector, such as cost reduction, patient satisfaction and employee satisfaction.
Facing the operational reality for the hospital mission
The hospital in this study is located in a mid-western US city (300,000 population)
where many changes have recently occurred. Owing to decreasing reimbursement from
the government in 2005, one in three healthcare providers reported net operating losses
(Weisman, 2012). The staffs mission is to extend their healing ministries to the poor
and under-served, but losing money is not beneficial. To fulfil the organisational
mission and deliver excellent patient care, staff decided to adapt lean practices to
eliminate waste and add customer value (Murray and Berwick, 2011).
Front-end planning for shared vision and understanding
Initially, the senior managers regarded costs and quality as trade-offs. Their typical
perspective is illustrated in the following quotation: To increase customer values,
then we must expect cost increases. Efforts were made to communicate lean practice
principles to key decision makers (e.g. focus groups with physicians, nurses, operational
managers, etc.). The goal was to ensure what lean practice meant; e.g. costs and benefits,
practical implementation challenges and their misconceptions. After several meetings,
this cross-functional focus group delivered a presentation to a larger group about lean
practices. Prior to implementation, staff formally defined waste as time, resources and
activities that do not contribute to satisfying patient needs. Additionally, staff identified
several specific waste issues: waiting and transportation time, over-processing,
inventory problems, absent innovative problem solving.
Pilot work
Specific departments were chosen to pilot lean practices. The first was an orthopaedic
supply project. The implementation team identified several waste issues (Table II).
Specific lean practices were designed to eliminate wasteful inventory and simplify
the workflows in the floor supply system, which were not well organized; e.g. the
supply room was cluttered with items that were never used. Leans specific goals were
to enhance inventory visibility, simplify supply-handling and increase workflow
flexibility with patients needs in mind.

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Expand specific work processes

Other important waste-reduction goals included decreasing unnecessary hospital
stays, increasing speed, improving quality and increasing patient satisfaction; patients
stayed longer with problems that occurred unexpectedly, but healthcare providers
claimed only fixed money from patients insurance companies, Medicare and Medicaid,
owing to the pre-defined allotted money for each diagnosis and procedure. To improve
operational efficiency, healthcare providers created a clinical care coordinator (C3) and
StatCom, which focused on real-time data collection and analysis. The C3 nurses
focused on patient movement through every step from admission to discharge. By
coordinating total patient-care service workflow, staff eliminated unnecessary waiting
times and reduced the time patients spent in the hospital. To collect real-time data,
healthcare providers used large StatCom monitors, which were placed on each unit and
in other areas. StatCom is a patient flow and logistics software, which shows patients
initials, room number, nurse, attending physician and care coordinator names, and
symbols that indicate each patients status. StatCom helps coordinate patient care by
providing physicians and staff members with visible information and real-time data
about their patients. After implementing the care-coordination system, the observed-toexpected ratio was 1:11 for April, compared to 1.16 for March. The average
LoS dropped from 4.9 days in March to 4.4 days in April (Figure 3). Consequently,

Lean practices
for quality
results
735

Before applying lean concepts

After applying lean concepts

Supplies were difficult to find

Supply scan was not used properly
Bin quantities were incorrect
Restacking supplies was also a challenge
The supply room was cluttered with
many items that were rarely used
Patients room was used for equipment
storage

Instituted a visually controlled inventory system that

reduced the number of out-of-stock items
Visually managed (color coded) supply room will improve
workflow for CDR staff and nursing staff
Main objective and stretch projects were accomplished in
a 2.5-day period
Reclaimed patients room with two beds with potential
Table II.
revenue of $1,044$/bed/day
Lean practices in the
Increased flexibility for patient placement within the unit ortho-floor supply project

Non-value-added
(white space)

Value-added
(diagnose, treat, procedures)

Length of stay (LOS)

Average = 5.1 days (OLD)

Length of stay (LOS)

Average = 3.5 days (New)

Benefits
Decrease Cost/case
Increase capacity(higher turns)
Reduce process defects and safety concerns

Figure 3.
Average LoS

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IJHCQA
27,8

staff exceeded budget month over month and in 2010 improved the budget goal by
$11.7 million, while increasing the operating income nearly 60 per cent in one year.
Figure 4 shows the results of implementing lean practices at partner hospitals
(Hospital A is the target hospital for this study and others are its partners). As shown,
other partner hospitals show decreased LoS.

736

Measuring patient satisfaction

Healthcare providers reinvested revenue into the service and technologies so that
hospital staff could improve their service quality. In 2009, healthcare providers offered
$77.9 million in community benefits, which represented 9.7 per cent of their total
expenses. In that way, healthcare providers can accomplish the hospitals mission.
Figure 5 provides information about patient satisfaction and shows that 73 per cent
who stayed in Hospital A recommended the hospital to their friends and family.
The percentage is higher than the average for all reporting hospitals in the USA.
Figure 6 shows increased customer satisfaction and patients who left without being
seen (LWBS) decreased from 3.5 per cent in 2009 to 1.8 per cent in 2011. The StatCom
information enhances employee satisfaction by enabling them to access real-time
information about their patients. Physicians can obtain high-quality, efficient, real-time
data, which enables them to deliver better healthcare with less wasted time. Staff
members also know where medical supplies are and spend more time with patients by
eliminating wasted workarounds. Generally, hospital changes are assessed on specific
service improvements, such as pastoral care, shift-change procedures, pharmacy
6

5.1

4.8

5
4

4.3
3.8

3.9

4.0

4.7

4.4

4.4
3.9

4.3
3.8

3
2

Figure 4.
Reduced LoS at
partner hospitals

1
0
Hospital A

Hospital B

Hospital C
Starting ALOS

Hospital D

Hospital E

53%

Hospital C

66%

Hospital B

73%

Hospital A

Figure 5.
Patients recommending
hospital to friends
and family

Hospital F

Current ALOS

Average for all Reporting

Hospitals in Ohio

69%

Average for all Reporting

Hospitals in The USA

69%

0%

20%

Source: Hospital Compare.gov

40%

60%

80%

% LWBS
4.00
% LWBS

3.50

Lean practices
for quality
results

3.00
2.50

737

2.00
1.50
1.00

Figure 6.
Left without being
seen (LWBS)

0.50

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0.00
2009

2010

2011

layout optimisation, lab cycle time reduction, supply delivery reliability (e.g. neonatal
intensive care unit), surgical supplies inventory reduction and patient transport
efficiency. Other measurable evaluation took place in three areas: reducing
cost; increasing patient satisfaction and increasing employee satisfaction.
By implementing lean practices, staff reduced the surgical supply inventory by
600,000 items. Patient satisfaction also increased. Patient readiness for transport
was improved from 46 to 90 per cent, which means that diagnostic testing increased
to 90 per cent. Additionally, lab throughput delay was decreased from 58 to 44
minutes on average. Empty transport runs were reduced by 25 per cent. Employee
satisfaction increased and shift-changeover was reduced from 30 to 15 minutes on
average. The distance that pharmacy technicians walked was reduced by 274 miles
per year. Additionally, the distance that RNs walked to retrieve supplies was reduced
by 626 miles per year. Overall, these changes create better experiences for patients
and employees.
Conclusions
This study features several, useful practical implications. First, sharing lean practice
is crucial for successful implementation. The changing healthcare system requires
managers to adopt flexible insurance coverage and contain rising healthcare costs
while responding to increasing customer expectations. Thus, implementing lean
practices is designed to achieve both customer satisfaction and cost competitiveness.
Practically, leans purpose is to reduce waste by using resources effectively while
maximising customer value. Developing and clarifying a shared vision facilitates fair
decision-making processes among stakeholders. Thus, organisational resources are
better directed towards greater inter-department cooperation (e.g. nursing with direct
patient contact and lab operations with indirect service support). Second, integrative
leadership requires various functional units for effective organisation-wide lean
implementation (Hong et al., 2004; Cooper and Kleinschmidt, 1994; Youn et al., 2012a).
The senior managers role is to communicate consistently the shared vision and larger
goals (e.g. organisational sustainability). Heavyweight managers must communicate
both to top managers and cross-functional project team leaders about practical
implementation issues (Rauniar et al., 2008; Worley and Doolen, 2006). Various
functional specialists (e.g. nursing professionals) support lean-practice through their

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738

direct service contact with patients using IT-enabled work systems. Increasingly,
lean practices are associated with several terms, such as green orientation and
sustainability initiatives; i.e. goal-oriented organisational change programmes (Yang
et al., 2011; Youn et al., 2012b). By achieving effective results through minimising
waste, increasing employee satisfaction and delivering broad customer value,
lessons from lean practices are applicable to other strategic initiatives (e.g. green and
sustainability initiatives) (Youn et al., 2013). We suggest that future studies empirically
examine drivers, strategies, operational practices and outcome measures related
to implementing expanded lean practices in specific organisational units and their
supplier networks.
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Corresponding author
Dr Paul Hong can be contacted at: Paul.Hong@Utoledo.Edu

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