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FRIDAY, JUNE 23, 2017
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Industries Healthcare Is Healthcare the Next Big Thing?

Is Healthcare the Next Big Thing?

I’ve had a lot pf people asking me about healthcare lately. As in, “Now that big corporations and the automotive companiesare reeling, with the stimulus coming and promises of healthcare reform, isn’t it a great time to move out of the manufacturing sector andinto process improvement in healthcare?”

Well, it’s true that thereare vast opportunities for improvement in healthcare. No one has the corner on perfection in care processes (although we’re all working madly on it, especially now that there’s public posting of healthcare quality – check out “Hospital Compare“) or in the support processes like patient accounting and billing. If I had my way, there’d be an improvement professional as a permanent part of every department’s budget.

But, just think a moment. Who pays for healthcare in the US? First of all, the federal government, which is desperately trying to shrink the amount it pays for healthcare even as it’s talking about access for all. Many hospitals have 40 – 60% of their revenues coming from Medicare and/or Medicaid. Frequently the government reduces reimbursements with very little warning. It’s an interesting thing, these days, to try to budget for healthcare when your major source of revenue pays 10% – 15% less every six months or so.

Then, there is the second largest healthcare revenue source, and that would be employers. Specifically, those same big corporations and automotive companies that are in a bit of trouble these days, along with their suppliers and vendors. As these companies have massive layoffs, and shrinkbenefits for the remaining workers, what’s the outcome? People will tend to utilize preventative services less frequently (because of those big copays and deductibles). And out-of-work employees have usually have a little coverage with COBRA (Consolidated Omnibus Budget Reconciliation Act) benefits, but then may have trouble paying the premiums – thousands of dollars a month. Therefore, hospitals are bracing for huge increases inemergency care visits which will either be reimbursed at lower rates (Medicare / Medicaid) or not reimbursed at all. So there will be less revenue there as well.

Now, back to those opportunities. If you were a hospital executive, knowing that less-costly processes would have a positive impact on your contribution margin, wouldn’t you invest heavily in the very people who can do this work for you? Why wouldn’t you want to have a trained group of healthcare Black Belts or Lean Practitioners at your hospital or healthcare company?

Well, because of the decrease in insurance revenue and the hit everyone’s pension plan took with the stock market plunge, there just aren’t enough dollars to fund everything that needs to be supported. Hospital executives are having to make hard choices – and believe me, they’ll lay almost anyone off before they lose nurses or other direct care staff.

So, while ideally every healthcare company and organization would be heavily into process improvement, the truth is that if you’re trying to go from a manufacturing or transactional position into healthcare, it’s almost like “out of the frying pan, into the fire.” Admittedly, I’m from Southeastern Michigan where we are really feeling the impact of the uncertainty in the automotive industry. However, the economic downturn has affected just about everyone in healthcare, whether they were prudent with their pension fund investments or not.

As an optimist by nature, I’m sure we’ll pull out of this slump and eventually be able to look on the bright side of life once again. In the meantime, if you’re looking for a healthcare position, do your research and speak with those already involved, so you go in forewarned and forearmed!

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Comments

Stephen C. Crate

You make a great point that lean practitioners may be the first cuts to be considered when looking at budget reduction. In our state government project Bend the Curve we have solved some of this by offering lean thinking training to direct care professionals and supervisors so they can use lean process analysis such as 5S and Kaizen in their day to day practices AND… when a project needs mobilizing they can form a project group to complete a Value Stream map other analysis and then return to their work at the end of the project. This serves two purposes. First it gives direct care professionals a break from the intense day to day attentiveness of direct care AND slowly changes the culture from within by having all staff participate in tranforming the organization.

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Healthcare Market Reports

Hey, its a very interesting post, I have benifitted a lot by this post, Keep posting.

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