Now is the time to deploy “Lean” in healthcare construction

When COVID-19 took hold in the U.S. in March 2020, it interrupted more than 50 years of steady revenue growth in the healthcare industry. While patient visit volumes rebounded as the pandemic waned, labor shortages and macroeconomic issues are reinforcing the need to protect and preserve revenue.

Healthcare organizations are responding by encouraging their employees to do more with less. But that’s a tall order in a competitive market. How do you eliminate waste and cut costs while at the same time enhancing the patient experience and attracting skilled workers? One approach that some providers are taking is to apply the same lean management principles they use in delivering healthcare to non-core activities like construction.

What is lean management and why is it relevant for healthcare construction?

Lean is a management philosophy conceptualized by Dr. James Womack in 1990 based on his observation of Toyota Motor Corporation’s production system. In general terms, a lean production framework is designed to eliminate waste without also reducing quality or productivity. Lean principles achieve this by defining value from the customer’s perspective and then continuously improving the way that value is delivered.

Hospitals and clinics have applied lean to the delivery of medical care for many years. But many healthcare organizations have neglected to extend those same principles to what is arguably the most resource-intensive endeavor outside of their core business.

According to the recently released Outpatient Fit Out Guide, the national average per-square-foot cost to renovate an outpatient facility has increased from $266 to $355 over the past five years. Many of those projects could be a substantial source of waste. For example, 66% of respondents to a 2020 Levelset survey of 540 construction businesses said they spend more than a quarter of their work hours waiting for other work to be done due to lack of jobsite coordination and inefficiencies embedded in the construction process.

Waiting time is just one of several issues that the lean approach addresses to help healthcare organizations make the most of their construction budgets.

Combating the eight wastes of lean in healthcare construction

A construction manager who follows lean principles focuses on relationships, handoffs, and communication, bringing all parties together to work as one team. The primary objective is to address eight areas of waste inherent in construction projects). Eliminating waste ultimately reduces costs while improving quality and productivity.

DOWNTIME: The Eight Wastes of Lean

• Defects: Materials that need to be replaced or work that must be redone
• Overproduction: Building something before it’s needed or building more than is required
• Waiting: Periods of inactivity due to bottlenecks, improper handoffs or issues in other parts of the project
• Non-Utilized Talent: Not using people to their full potential, or allowing them to spend time on activities that don’t create value
• Transportation: Handling of material multiple times before it is delivered to the work area
• Inventory: Having more material on-site than is needed, or before it’s needed
• Motion: Movement that doesn’t add value, such as time spent looking for tools
• Extra processing: Redundancy in processes, such as having to get multiple signatures on forms

Lean construction in action

Recently, a children’s hospital on the east coast had to grapple with a tight construction schedule on a small urban site with limited space for staging. To address both the time and space issues, the engineer of record and the mechanical and electrical trades agreed to prefabricate building modules and standardize fittings for easier installation. This practice of constructing elements of a project off site for just-in-time delivery tackles several of the eight “DOWNTIME” waste factors.

Most hospital rooms include a wall that is fitted with regulators for medical gasses used in patient care, in addition to power and data outlets. For this project, these “headwalls” were fabricated at a warehouse rented by the project. Pump and piping systems were also assembled off site and brought to the site as a single unit. Each night, crews would deliver only the materials and modules that would be installed the next day.

This approach required up-front planning and ongoing coordination between stakeholders to ensure that off-site production kept pace with progress on-site. But those few extra hours of time and effort likely prevented the squandering of whole days and thousands of dollars.

Lean methodology includes tools to tackle every source of waste and inefficiency, but this example demonstrates how applying just one or two elements of lean can make a big difference.

Implementing lean healthcare construction doesn’t have to be all-or-nothing

While diehards of lean philosophy tout it as a top-down, transformative approach, going all-in may not be desirable—or even possible—for most organizations. There are ways to start slowly with lean, achieve some small successes and then build from there. Adopting lean construction principles doesn’t have to happen all at once or supersede what you already have in place.

A good place to start is by incorporating lean into your vendor assessment strategy. When you're hiring general contractors and architects, ask them to what extent they’ve applied lean principles in other projects, and prioritize working with vendors that have lean construction experience.

Once you’ve identified providers that are open to using elements of lean methodology, a construction consultant can help you develop a roadmap for implementing lean principles that’s tailored to your organization and projects. Some construction consultants may even have in-house capabilities to facilitate elements of the lean system.

When it comes to doing more with less, lean principles can make a little change go a long way

The pandemic and ensuing volatility have compelled many healthcare organizations to be more vigilant about expenditures. At the same time, hospitals and clinics must continually enhance the patient experience and invest in new facilities to meet the healthcare demands of an aging population. Add to that workforce shortages that are forcing providers to increase wages, and it’s clear that a little efficiency can go a long way towards relieving cost pressures.

Now is the right time for hospitals and clinics to begin implementing lean, not just at their nurse’s stations but in their construction projects as well.

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