What Can Lean Do for the Healthcare Business Office?

Daisy asked,

What can lean do for the Healthcare business office? The billers, the insurance follow up staff?

Lean can do a great things for the healthcare business office. I have asked Chris Schrandt to answer this one. Chris has been doing a lot of work recently teaching lean on the payer side of healthcare. The process on the payer side (insurance companies) is a mirror image of the billing and insurance follow up within a hospital that Daisy is asking about. Here is Chris’ real world answer:

The problems I’ve observed show up mainly as waiting time and redundant processing as a result of errors and missing information. This is caused by a lack of built in quality in the process, which in turn is a result of a lack of standard work.

The incoming information is incomplete. It’s not always clear what is needed in terms of information. There are differences in requirements between insurers, differences in forms, differences in who handles the incoming information, and how it’s handled. It’s not standardized. This results in a lot of back and forth, which has become part of the default “standard work”! Instead of saying “this is crazy!” people just accept it.
Don’t accept poor quality. You need to stop and say “How could we have avoided this?” or “How can we fix this?” whenever there is a problem that keeps you from doing your job right the first time. You need to ask, “Why do we do this?” And then do 5 why problem solving. Design the process so all of the information is there and correct. That’s what built in quality and kaizen is all about.

Once you recognize that it’s not right to go back and forth 5 times, you can start to standardize many simple things. Don’t make 12 phone calls about every claim. Design the system so there is no back and forth. Mistake proof the forms. Standardize the media for delivering the information, whether fax, phone or email.

Map the process and learn to see the 7 wastes in your process. Learn to see that emails and phone calls are a type of transportation and motion waste. You are searching for information and then sending that information on to someone else to handle. If it comes back to you, it’s the waste of correction. If it sits in your inbox, it’s inventory. None of that adds value.
Another thing you can do is to begin cross training so that eventually one person can handle the whole claim. That way you avoid the waste of handing off, waiting, work in process and other ambiguities. One person can do one piece flow.

The first step is to recognize that back and forth is bad, and the rest is simple.

Hope that helps.


Chris spent 10 years at TMMK as a quality manager before implementing the lean system at GM in Brazil and Argentina for another 10 years. He is a TPS expert who has lived built in quality inside and outside of Toyota. He enjoys teaching problem solving and brings a unique perspective to lean.