What a Waste – Up to $1 Trillion Annually is Wasted in Healthcare

As healthcare reform transitions from an abstract idea to a foregone conclusion, healthcare leaders are focused on uncovering inefficiencies in their systems.  Instead of merely slashing reimbursements or providing less care, we have a clear opportunity to do more — and provide the right care — with less waste and less spending. I recently read Mark Graban and Rob Harding’s article Cut Costs by Reducing Redundant or Inefficient Activity, in Hospitals & Health Networks, and agree with them that there is even more hidden waste to cut.

There are estimates that 30 to 50 percent of all healthcare spending can be described as waste — activity that provides no benefit to patients. Lost and mislabeled specimens and expiration of inventory due to poor rotation are two of the major areas of hospital waste that are listed in the article. This adds up to a staggering $1 trillion-plus a year in the United States alone. If we are to experience true healthcare reform, this clearly has to stop.

So, what is the solution to a $1 trillion problem?  While I don’t believe there can be one solution to such a massive problem, I do believe waste can be identified more easily when different departments of the organization work together to create integrated solutions.  For example, in our world of healthcare transportation, different departments of a health system frequently send their own drivers to make pickups at the same location.  A laboratory driver, pharmacy driver, blood bank driver and materials management employee could all be in the same building at the same time.  That kind of overlap is an example of the hidden waste to which Graban and Harding are referring.  It is not apparent to the system, but can be remedied with an integrated solution (and a partner that knows how to find it).

At MedSpeed, we are subscribers to the principles of Lean Six Sigma.  We train our team to persistently evaluate current situations and pursue new ways to drive out waste.  In fact, we have a dedicated quality department that oversees operational improvement and waste reduction for our clients. By providing a proficient transportation network, clinicians spend less time searching for items and more time concentrating on patient care.

As we all prepare for the next step in healthcare reform, let’s apply Lean principles to increase efficiencies and enhance the quality of healthcare. Let’s not waste this opportunity.

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