This Blog was originally uploaded in January 2010. Given the recent postings related to Lean Thinking, this Blog has new meaning. So with some minor modification, I am recycling this Blog.
There are unique rewards when teaching at the collegiate level. One never knows when a question or series of questions will inspire the instructor to look at a concept and approach to management or an issue from a different perspective. In recent months it is logical to assume that instructors have been bombarded by the same question asked over and over again. Given the responsibility, the reductions in reimbursement, the requirements and the transparencies created by Medicare.gov portal (i.e.: Nursing Home Compare), how does a health care executive or more specifically, a nursing home executive get it all done? Indeed that is the question.
Teaching health care management and nursing home administration requires an instructor to link the core tenets of financial management, with the realities of what executives do, identified in a classic Harvard Business Review article (the article appeared in the July-August 1975 HBR and reappears periodically), written by Henry Mintzberg. So for a quick review, not that the reader needs one, the core elements of financial management are: planning, controlling, organizing & directing, and decision. Mintzberg identified ten roles that leaders (specifically CEOs) play and aspects of these roles: interpersonal (figurehead, leader and liaison), informational (monitor, disseminator and spokesperson) and decisional (entrepreneur, disturbance handler, resource allocator and negotiator). These roles have an impact on managers at all ranks at various levels of intensity and responsibility. At the conclusion this portion of the lecture, many students have “deer in the headlight look on their faces,” often asking, how do we do it all. When the instructor adds the impact of the regulations and another role – the fiduciary, the rest of the students have that expression. After the shock wears off the question is asked: how does a nursing home executive get it all done?
Nursing home leadership followed a logical course to all assure that it all gets done. When funding was better, we had levels of management who took on a variety of responsibilities. Organizations were able to absorb these expenses as we grew them, often with innovative programs that vertically expanded our capability to serve chronically ill seniors. As funding was cut, organizations ultimately had to reduce these ranks and this solution wasn’t as available as it once was.
Another solution was the limited but important role of contracted services for: legal issues, labor relations, marketing, public relations, reimbursement, planning and others. The scope of the role varied based upon the facility and issues it faced. The rolls could be narrowly defined as well. Many of the contractors developed close working relationship with the facilities even though they were a contractor, billing an hourly rate plus expenses. These contractors remind the nursing home executive that their services pay for themselves, although organizations may have to wait a bit to fully recover these expenses. Given reimbursement cuts and cash flow challenges, even these relationships are changing as the nursing home leadership balanced the need for these important services versus reduction in reimbursement. The long term solution that hospitals seem to select and nursing homes should consider is Lean Thinking.
Lean Thinking is based on concept of maximizing consumer value while minimizing waste. This approach requires organizations to create products/services that maximize customer value with fewer resources. Lean Thinking was developed and is used in manufacturing and there are still many who believe it only works in manufacturing. Lean Thinking works in any organization that has process and system including long term care. It can be effective because Lean Thinking is a mindset and a culture that can lead to quality outcomes and efficiencies that reduce the cost of operation.
Lean Thinking can be applied to day to day operational issues, including controlling supplies expenses and eliminating waste. As students learn, these are the variable costs that should change as occupancy and/or intensity changes. Often this does not happen, mostly because management is focused on other issues that are deemed a higher priority (of course the nursing home executive is deciding on priorities). Yet we need to monitor those expenses somehow because we do indeed have to get it all done. In today’s environment organizations need to consider an innovative approach so that this task is handled consistently and properly. Caretech has the solution.
Working in collaboration with your management team, Caretech will help your organization reduce supply expenses, while providing timely information that assures your organization is moving towards its goal of becoming a Lean organization. Caretech acts on the behalf of the organization based upon a defined framework. As your strategic partner, we will benchmark, identify trends and provide information to help manage these issues. Additionally, Caretech can enter into a unique financial relationship built around shared risk and benefit that underscores our ability to be your strategic partner. The strategic partner is part of the Lean Thinking approach. The creation of a Lean organization (including mindset and culture) is an effective answer to the question, no matter who is asking, on how to get it all done.