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HealthFebruary 01, 2021

Does lean management impact hospital performance? Results from a national survey

By: Sarah Handzel, BSN, RN
As spending for hospital care surges, a growing number of hospital systems are exploring ways to save money while also improving the patient experience and quality of care. For many, this has led to the adoption of a style of management known as “lean management.” First developed by Toyota, administrators in almost all industries, including healthcare, manufacturing, and more have turned to this approach to eliminate waste and improve work culture and performance.

Lean management implementation varies among healthcare organizations, but there have been no comprehensive national examinations of how the adoption of the management style impacts hospital performance measures. The authors of a new study in Health Care Management Review1 took on this challenge to help determine how beneficial this management style really is.

Key aspects of lean management style

Lean management is defined as an overall management or operational system using a continuous improvement culture to empower frontline workers, enabling them to better solve problems and eliminate waste. This is accomplished by standardizing work which, in turn, improves the quality of care patients receive.

To accomplish these goals, hospitals using lean management techniques generally adopt a new set of practices and tools to help assess, improve, and monitor work performance among employees. These may include value stream mapping, visual tracking charts, or regular huddles in which nursing staff and others discuss the status of each unit’s operations. In most cases, nurse leaders round on individual units to better understand the typical workday and problems staff members frequently encounter.

It’s thought that the greater the implementation of lean management practices, the more a hospital’s performance will improve over time. For this study, two hypotheses were put forward:

  1. Lean management adoption should be negatively associated with Medicare spending per beneficiary, adjusted for certain factors such as inpatient expense per discharge and 30-day unplanned readmission rates.
  2. Lean adoption is positively associated with hospital earnings before interest, taxes, etc., adjusted for factors such as patient satisfaction and operating profit margin.

Study methods and variables

Rundall, et al. developed a 20-minute online survey to help measure lean adoption and implementation in hospitals nationwide. The survey was sent to 4,500 acute care general medical and surgical hospitals—of these surveys, a total of 1,152 hospitals responded. Questions covered a variety of topics, such as the date of lean management adoption, the extent of its current use, and the hospital’s approach to implementing this new style of management.

The study independent variable—whether or not a hospital adopted lean management—didn’t change. In addition to this variable, 10 dependent variables were used to help measure hospital performance. These involved frequently used measures of financial performance, patient outcomes, and patient satisfaction, such as:

  • Medicare spending per beneficiary
  • Adjusted inpatient expense per discharge
  • Adjusted operating profit margin
  • Earnings before interest, taxes, depreciation, and amortization (EBITDA) margin
  • 30-day risk-adjusted mortality index
  • Death rate in low-mortality diagnosis-related groups (DRGs)
  • Pressure ulcer rate
  • Death rate among surgical inpatients with serious treatable conditions
  • 30-day unplanned readmission rate
  • HCAHPS score

Control variables associated with financial performance, patient outcomes, and patient satisfaction were also considered, including hospital ownership, bed size, and market concentration.

Study results and conclusions

Information gathered during the study showed that only one out of seven predicted negative associations between lean management adoption and hospital performance measures were supported—Medicare spending per beneficiary was significantly associated with a hospital’s adoption of lean management. None of the information gathered supported the authors’ second hypothesis with any statistical significance.

The authors of the study speculate that, if lean management is to contribute to hospital performance improvement across various measures, leaders must be fully aware of what the adoption of lean management actually means for their organization. This management style may work well in single units, but hospital-wide success requires a broad, ongoing commitment to using lean management tools and processes.

Sarah Handzel, BSN, RN
Freelance Health and Medical Content Writer, Wolters Kluwer Health
Sarah has over nine years’ experience in various clinical areas, including surgery, endocrinology, family practice, and pharmaceuticals. She began writing professionally in 2016 as a way to use her medical knowledge beyond the bedside to help educate and inform healthcare consumers and providers.
  1. Rundall, Thomas, et al. “Adoption of Lean Management and Hospital Performance: Results from a National Survey.” NursingCenter, 2021, nursingcenter.com/journalarticle?Article_ID=5711548&Journal_ID=289730&Issue_ID=5710851.
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