Avoiding Errors and Reducing Waste:  Toyota’s Lean Production System in Healthcare Delivery

Avoiding Errors and Reducing Waste: Toyota’s Lean Production System in Healthcare Delivery

When dealing with national healthcare expenditures, a great part of the goal of controlling spending is curbing its increasing slope while improving patient outcomes. It is possible to achieve both of these goals without rationing care by looking at systemic flaws in the system that drain resources that would be better allocated to patient care. In the United States, healthcare spending attributable to waste accounts for $750b in waste alone (Institute of Medicine 2012) – a huge figure depicting a health service delivery process prone to inefficiencies. The objective of better allocating resources by minimizing errors and maximizing performance has been further incentivized for hospitals by the CMS’ 2008 pay-for-performance rewards. (Olive & Brown 2009)


Perhaps the healthcare industry could gain some insight into the best practices of efficient organizational patterns by looking at how private sector firms have responded to the same issue. By deconstructing healthcare’s framework into basic components, it can be understood in terms of a production system that provides a good (medical services) to a client (patient, community). A firm of particular success in resource management is the Toyota Production System (TPS), which used a system of lean production to improve service while increasing productivity.

Stream mapping the complicated process of a patient visit would break the event down into individual steps to make each part more efficient for the patient and the provider. (Weinberg 2011) The scientific management method of identifying sources of financial and time waste in this map are key as the goal would be to reduce patient waiting, movement, over-processing, lack of coordination, and impractical inventory. Hospitals like Virginia Mason who have instituted the TPS method to their healthcare practices have reported reduced liability costs by 60% while being able to phase out the use of waiting rooms entirely. This has increased direct contact with patients while avoiding unnecessary steps through common-sense methods like having supplies and drugs bedside in hospital rooms instead of having nurses collect them at a central storage room. (Brown & Bowser 2012) These supplied would be stocked using a just-in-time system of supply management, where medical supplies are not only available where they are needed, but more are ordered exactly when they are needed. This supply system reduces costs by reducing inventory and lowering costs associated through waste like passed expiration dates. (Weed 2010)

Example of stream mapping applied in a medical context.

Toyota’s lean production process is rooted in the concept of kaizen, or continuous performance improvement, where employees can improve their own work patterns by implementing approaches to eliminate non-value added activity. For instance, having all the materials needed to prepare an IV in a small kit within every room would be a low-cost kaizen idea which would save time and better serve the patient. (Congdon 2012) Giving more tacit leeway for medical professionals to try their own workplace solutions values their contribution and provides a means of reducing costs through employee-driven innovation rather than through layoffs or budget constraints. Strengthening the position of medical practitioners relates to Dr. Sanfilippo’s case study where intra-hospital friction was reduced by agreeing on a collective mission and enabling them to increase the performance of the system as a whole.

Further applications of kaizen to the healthcare field also mean greater teamwork and individual judgment in ensuring good patient outcomes. Rather than structured around a rigid hierarchy where second-guessing is discouraged, the TPS form of healthcare would make every employee expected to report a serious concern they may have. The TPS system of increased voice and accountability was specifically brought up by Dr. Wolf as a means of avoiding medical error and the risk of malpractice prosecution. Similarly to how a Toyota workers can stop the entire assembly line if an issue is detected, kaizen healthcare would allow anyone to halt a procedure if they believe that there might be an error with medication, charts, etc. Through dynamic feedback and documentation of the ‘near misses’ as well as the actual errors, it thus becomes possible to focus on the root causes of common medical issues. This proactive approach would permit physicians to avoid these problems from occurring in the first place rather than just accommodating for it after the fact. (Dunn 2009)

Understanding the concept of kaizen‘s lean production system and applying it to the healthcare system is a particularly interesting opportunity for system-wide reform. The methods that Toyota applies to its production lines have the potential to revolutionize the field by empowering workers and maximizing the efficiency of human capital. However, it remains important to consider whether these efficiency-oriented goals are as suitable for a hospital as they would be for a factory. While industrial production systems may not be adequate to factor in certain aspects of care, such as chronic care or psychological distress, I believe that they still hold important lessons for making healthcare more efficient while improving patient care. Due to the very nature of healthcare, time is often a precious commodity that patients may not have much left of – proper treatment should take this into account by making the process as smooth as possible and therefore giving patients as much time outside of the hospital as possible.

Works Cited

Brown, Jeffrey, and Betsy Ann Bowser. “Rooting Out Waste in Health Care by Taking Cue From Toyota Assembly Lines.” PBS. 24 Oct. 2012. Public Broadcasting Station. <http://www.pbs.org/newshour/bb/health-july-dec12-health_10-24/#the-rundown>.
Congdon, Ken. “Kaizen: The Key To Lean Healthcare?” Health IT. 2 May 2012. Health IT Outcomes. <http://www.healthitoutcomes.com/doc/kaizen-the-key-to-lean-healthcare-0001>.
Dunn, Lindsey. “5 Key Principles for Hospitals From Toyota’s Lean Production System.” 17 Sept. 2009. Becker’s Hospital Review. <http://www.beckershospitalreview.com/news-analysis/5-key-principles-for-hospitals-from-toyotas-lean-production-system.html>.
Olive, Mike, and Mike Brown. “Toyota Production System: Transforming Healthcare Organizations for the 21st Century.” PSQH. Nov.-Dec. 2009. Patient Safety & Quality Healthcare. <http://www.psqh.com/novemberdecember-2009/314-toyota-production-system-transforming-healthcare-organizations.html>.
“Transformation of Health System Needed to Improve Care and Reduce Costs.” Press Release – Institute of Medicine. 6 Sept. 2012. Institute of Medicine of the National Academies. <http://www.iom.edu/Reports/2012/Best-Care-at-Lower-Cost-The-Path-to-Continuously-Learning-Health-Care-in-America/Press-Release.aspx>.
Weed, Julie. “Factory Efficiency Comes to the Hospital.” NYT. 10 July 2010. The New York Times. <http://www.nytimes.com/2010/07/11/business/11seattle.html?pagewanted=all&_r=1&>.
Weinberg, David. “US Hospitals Turn to Toyota for Management Inspiration.” VOA. 2 May 2011. Voice of America News. <http://www.voanews.com/content/us-hospital-turns-to-toyota-for-management-inspiration–121165799/163553.html>.