“New pandemic” calls for stepping up lean management in healthcare

There is a sustainability crisis in today's healthcare system, the result of factors that are already known but still poorly understood. It is creating new difficulties and losses for organizations. And it heightens, even further, the need to improve management systems and, therefore, to adopt and optimize the lean journey.

Several factors are behind this new phenomenon.

One of them brings together recent changes in the characteristics of the individuals who seek healthcare services. For example, the rise in the average age, with an ever-growing number of older people, producing a shift in the demographic profile of patients.

The number of individuals over 60 has been growing and is expected to increase even more in the coming years. This is a distinctive population. These patients stay longer in the hospital, with more comorbidities and higher costs for organizations.

There has also been a recent change in people's relationship with healthcare treatments. They show, increasingly, concern for and pursuit of prevention and care. They have greater access to information, both about health and about the organizations in the sector. And, therefore, they are more demanding, in a more sophisticated way, regarding the experience they need or want to have in their healthcare.

All of this is compounded by the consequences of a “backlog” of procedures. This phenomenon is, moreover, a consequence of the recent pandemic years. And it has led to more frequent use of healthcare systems. This has increased both the loss ratio of health insurance plans and the demands on SUS (Brazil's Unified Health System). Thus, the private and public sectors find themselves, once again, somewhat unprepared to reconcile operational structures and financial needs.;

This becomes even more problematic with new and recent contextual issues that affect the “financial health” of organizations. For example, inflationary instability, which, combined with the rising loss ratios of health plan operators, causes difficulties in the payments passed on to organizations. These, in turn, are left with ever smaller “cash reserves” to  carry out and operationalize their deliveries.

In the wake of this process, on the side of organizations such as hospitals and clinics, the increase in the nursing salary floor and the rising costs of equipment and supplies... reduce the investments that could be used to improve “deliveries” to patients and their companions.

Thus, all this “new complexity” demands, perhaps as never before, starting or stepping up lean implementation. Only by evolving management will it be possible to effectively plan, manage, and deliver more quality, safety, and positive experience,  considering that we will have the same resources or fewer. Lean is, more than ever, the most efficient “answer” to the increasingly complex contexts of the healthcare sector.

How can this be achieved? On several fronts.

For example, by strengthening the formulation, deployment, and execution of strategy. This means starting with a lean perspective right from the drafting of a well-defined strategy, that is, a well-thought-out and well-executed hoshin kanri. And tied together by alignment, across the whole organization, of the purposes it needs and wants to achieve.

Daily Management (DM) is also a powerful and successful tool to support institutions in this necessary transformation. When well designed, deployed, and effectively used throughout the organization, it generates positive impacts. It helps uncover problems and directs the execution of effective countermeasures. It also strengthens psychological safety between leaders and their teams.

It is no news that the healthcare sector has always been historically complex. However, recent years have created new directions that no one ever foresaw.

During the pandemic, in 2020, 2021, and 2022, efforts were concentrated on understanding and treating the new disease. And the expectation was that, in 2023, things would return to the 2019 flow and recover lost profitability and cash. However, that did not happen. The year now ending brought firsthand experience of the new elements of complexity described here. And they are only expected to intensify in the coming periods. It is as if it were a “new pandemic”. Not of a new disease, of course, but of management problems and challenges.

In this context, it is worrying to note that healthcare organizations that fully commit to lean implementation are still a minority. Although significant growth in this direction can already be observed, those with truly advanced journeys to show are rare.

So there is no other alternative. We must intensify the improvement of care management. Strengthen the daily review of processes. Increase team training, not only regarding the challenges of diagnosis and treatment, but also on how to manage all of this.

The challenge, therefore, is to focus on management in order to minimize the negative economic impacts of the “new pandemic”. And thus be able to deliver more value, with less waste. Only in this way will we succeed in consolidating a truly efficient healthcare management system.