Abstract
BackgroundThe costs of investing in health care reform initiatives to improve quality and safety have been underreported and are often underestimated. This paper reports direct and indirect cost estimates for the initial phase of the province-wide implementation of Lean activities in Saskatchewan, Canada.MethodsIn order to obtain detailed information about each type of Lean event, as well as the total number of corresponding Lean events, we used the Provincial Kaizen Promotion Office (PKPO) Kaizen database. While the indirect cost of Lean implementation has been estimated using the corresponding wage rate for the event participants, the direct cost has been estimated using the fees paid to the consultant and other relevant expenses.ResultsThe total cost for implementation of Lean over two years (2012–2014), including consultants and new hires, ranged from $44 million CAD to $49.6 million CAD, depending upon the assumptions used. Consultant costs accounted for close to 50% of the total. The estimated cost of Lean events alone ranged from $16 million CAD to $19.5 million CAD, with Rapid Process Improvement Workshops requiring the highest input of resources.ConclusionsRecognizing the substantial financial and human investments required to undertake reforms designed to improve quality and contain cost, policy makers must carefully consider whether and how these efforts result in the desired transformations. Evaluation of the outcomes of these investments must be part of the accountability framework, even prior to implementation.
Highlights
The costs of investing in health care reform initiatives to improve quality and safety have been underreported and are often underestimated
In order to quantify the number of hours devoted to each Lean event, we reviewed the corresponding project forms available at the Provincial Kaizen Promotion Office (PKPO) Kaizen database [23]
To understand the ways that rapid process improvement workshops (RPIW) they were implemented in Saskatchewan and to estimate the average number of participants in RPIWs, as well as their job titles, we reviewed the RPIW project forms for all RPIWs that took place in the four largest health regions in the province (Saskatoon Health Region [Saskatoon health region (SHR)], Regina Qu’Appelle Health Region [RQHR], Five Hills Health Region [Five hills health region (FHHR)], and Prince Albert Parkland Health Region [PAPHR]) during 2013
Summary
The costs of investing in health care reform initiatives to improve quality and safety have been underreported and are often underestimated. Process management theory suggests that the best way to reduce costs is to improve quality [5]. Lean is a management system originating over 50 years ago as the Toyota Production System, a method to improve production by eliminating waste [8]. In the field of operations management, the most frequently cited definition of Lean is offered by Shah and Ward, who define Lean as a complex intervention in the form of ‘an integrated socio-technical system to eliminate waste by concurrently reducing or minimizing supplier, customer, and internal variability’ [9]. Lean management is often described as a continued commitment to
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