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Hospitals are Driving toward a Leaner Organization Essay

To obtain sustainable organizational efficiency and service quality, many hospitals have adopted an Open Systems Perspective by using “lean management” procedures borrowed from leading car manufacturers, in an effort to “reduce and remove waste from work processes”. These processes improved organizational efficiency reduced costs and provided better patient care. i What ‘seems’ to be the Problem: Secondary Symptoms

Full waiting rooms, long wait times, inefficient use of supplies and budgets, needless stress and high mortality rate is feedback from the external environment that the hospitals are not meeting the needs of their stakeholders, or fitting in with their environment. Before adapting lean management processes, hospital staff and patients alike shared the burden of what appeared to be the inevitable consequences of health care delivery and a closed systems perspective.ii These problems are manifestations of organizational deficiencies which negatively affect the quality of patient care, the distribution of hospital resources and employee morale.

The Real Reasons Hospitals are Facing Difficulties: Primary Problems The secondary symptoms are indicative of underlying issues, highlighting their poor organizational-environmental fitiii and the ineffectiveness of communication between Internal Subsystems.iv To a large extent hospitals have not adapted to their external environment nor have hospitals managed it effectively.v Hospital management, for example, has not adequately promoted the appropriate use of hospitals as opposed to family physicians.

The departmentalization of hospitals has unintentionally caused a disconnection between internal subsystems. The lack of coordination between hospital management, physicians, hospital staff and patients prevents the flow and use of information within the organization. The ultimate result is that resources (staff, equipment, financial resources) are not allocated to their optimal use causing superfluous procedures and purchases.vi Solutions, Recommendations and Implementation Plan:

Open Systems Perspective and Lean Management strategies will promote organizational efficiency and resolve the underlying problems. Steven L. McShane explains that collaborative efforts between internal subsystems have proven to reduce the time, efforts and costs contributing to the primary problems. vii Hospitals can use information technology and incentives to staff to share information about where efficiencies can be realized.

For example, those responsible for hospital purchases will be greatly assisted by pertinent information from those using the equipment and supplies. The strategy will be financial costly in the short to medium term as the costs associated with implementing such a system will not be compensated for until efficiencies realized over the long run exceed its cost.

Furthermore, cost and effort may be required to change the organizational and departmental cultures within hospitals to foster the collaboration necessary for the exchange of information. Including hospital staff in decision making of management may also increase job satisfaction and morale. Efficiencies discovered through information sharing will take stress of budgets and savings may be allocated to areas in need of more resources.

A second organizational fit strategy is to transfer resources from underutilized areas to areas in need of greater health care services. Hospitals have likely not allocated their resources to respond demographic changes. Transferring health care resources will almost certainly result in public discontent in areas from which some health care resources are removed. There is also a financial cost and time associated with transferring resources from one geographic area to another more needy one, such as construction costs.

In the medium to long term, however, moving resources from areas where they are not needed to an underserviced environment increases efficiency which addresses long wait times, lower quality of care and higher mortality. A further strategy from the Open Systems perspective is to manage the environment by engaging and educating the public about how to more efficiently access health care services.

Hospital management will be required, in pursuing this strategy, to spend resources on promotion and education which may exacerbate wait times and the other secondary problems discussed earlier. In the medium to long term, the more efficient use of hospital resources on those that truly require them and diverting other potential hospital users to the appropriate health care provider, such as a family physician, will necessarily alleviate wait times, increase quality of care and improve hospital budgets.

Finally, from the internal sub-systems perspective, through expending resources on gathering empirical data concerning the relationship between resources and health care outcomes, as well as developing and employing greater diagnostic testing, physical resources and time can be managed more efficiently. Hospital management must implement a system and allocate resources to data gathering and analysis.

Physicians must participate in providing data and expertise. Through continuous improvement the benefits of not expending hospital resources superfluously may be realized in the medium to long term. These solutions will positively impact full waiting rooms, long wait times, inefficient use of supplies and budgets, needless stress and potentially contribute to a decrease in the mortality rate. This allows hospitals to better fit and manage their environment.


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