Creating An Operational Excellence Strategy For Hospitals



Health care professionals assess a patient’s state of wellbeing and devise short-term tactics and long-term strategy for excellence in managing the patient’s care. Likewise, a health care organization needs to assess its own organizational well-being and create and implement plans for excellence. This means not only excellence in providing quality health care, but also in delivering to meet the organization’s targets for productivity, costs and other key performance indicators. An operational excellence strategy provides the framework for these organizational efforts.


What is Operational Excellence?

We can define operational excellence (OpEx) as building a sustainable competitive advantage through operations management. If that seems like a statement that applies only to a manufacturing process, consider some of these undesirable health care situations:


  • An emergency department has average wait time of 80 minutes for nurse examination and 6 hours for discharge or hospital admission, hardly “emergency support.”
  • Patient customer feedback surveys indicate an average 3.9 satisfaction level, with scale of 0 (fully dissatisfied) to 7 (fully satisfied).
  • A hospital’s surgical complication rate has been “worse than the national rate” for the last three assessments.
  • The gastroenterology ward “can’t go a day” without an accidental needle stick…and all the related medical follow-up, documentation, stress, and very real health risks.
  • A state inspection identified serious flaws in the hospital’s biohazard waste program.
  • Nursing staff members complain of endless—or not enough—overtime.
  • A department’s operating costs have increased by 15% year-on-year, without clear explanation of the reason(s).

Situations like these become not only distracting, but also unsafe, unsatisfying, and unsustainable when health care professionals simply want to focus on their patients. Both health care professionals and administrators can benefit from the use of an operational excellence strategy to fix these and other problems. Your teams can apply structured continuous improvement efforts to manage these and other issues in your operations to improve patient outcomes and drive lasting organizational improvements.

Sustainability is an important aspect of improvement efforts. Doctors may develop unique personal styles in their areas of expertise; after all, they are special in that they do save lives on a daily basis. However, variability can lead to entropy and chaos, so your OpEx strategy will incorporate the use of best practices to reduce variability and drive sustainable excellence across the organization.

Competitive advantage is important too, whether you’re a private hospital needing to deliver profit or a public hospital vying for government funding. Patients in today’s world of access to limitless information can clearly make alternative choices if they sense another facility will offer something better in terms of quality, timing, cost, or other factors important to them.


OpEx Strategy Starts with a Vision

Your organization likely has a vision for patient care, perhaps something like this one from Carolinas HealthCare System: “To be the first and best choice for care.” That’s great, exactly what patients and other stakeholders want. OpEx builds upon this vision with a compelling statement of what the overall vision means within operations.

For example, being first and best might mean improving patient satisfaction and reducing costs. On the other hand, it could mean increasing accessibility and protocol compliance. Ultimately your OpEx vision will be a motivator toward a challenging but achievable and measurable set of goals that are relevant for your organization’s overall vision, mission and goals.  


Assess Your Operational Excellence Needs and Opportunities

Before jumping in to major investment in operational excellence education and implementation efforts or application of one-off tools, it’s important to assess your organization’s current health, just as your doctors and nurses assess their patients’ health before diagnosing and prescribing care. This is not the time to fix problems, but instead to identify problems and opportunities.

A small team of forward thinkers from across the organization can drive this assessment, considering questions such as these:


  • What metrics do you currently have for performance in safety, quality, productivity, and cost?
  • What areas have the biggest gaps between where you are now and where you need to be?
  • What areas are important but don’t even have metrics?

Just as you’re probably using evidence-based medicine for individual patient care, you will want to use observable and quantifiable information to care for your operations. From this assessment, your team can lay out a strategy with overall long-term goals and a timeline for tactics in areas of education and implementation. The strategy should address opportunities in pareto order.


Engage the Staff to Get Things Started

Many in the medical field are expert in technical areas, skilled and personable in bedside manner, or knowledgeable in regulations, yet they may have little to no experience in systematic operational improvements. Your staff may doubt that Lean Six Sigma and related methods that have driven amazing improvements in manufacturing, banking and other areas have any relevance in medicine. They do, of course.

Show your team examples of OpEx successes from other healthcare organizations; there are plenty, in medical procedures, administration, and all functions across the hospital. For example, Dr. Peter Pronovost of Johns Hopkins Hospital demonstrated that use of a simple checklist, one of the basic quality tools of Lean Six Sigma, practically eliminated hospital-acquired infection, reduced mortality, and dramatically decreased costs. This tool is an example of the type of major improvements that can come from your focused operational excellence program.

Start within your own operations with a pilot OpEx effort. The Cleveland hospital of Carolinas HealthCare System delivered Lean education to a cross-functional leadership team with a project-based approach, working together to reduce Emergency Room wait time. The site has improved and is now sustaining performance significantly better than state and national levels.  


The Path to Operational Excellence is a Slow and Steady Journey

Sometimes enthusiastic OpEx participants attempt too many activities in their earnest efforts to start making improvements as quickly as possible. It’s similar to bombarding a patient with too many different pills, protocols and therapies: not manageable, not in the best interests of the patient and not likely to achieve the desired outcome. It’s best to start OpEx with managed efforts to guarantee early successes, then leverage progress to build more enthusiasm and involvement. Small successful efforts can build a very positive continuous improvement spiral.

Ultimately your overall OpEx strategy will address staff practices from floor nurses to operating room staff, cleaning crew and billing coders, in other words, all employees. Leadership behaviors are just as big a part of operational excellence as are the structured methods of problem-solving approaches and continuous improvement tools and techniques. As you begin to train your team and implement improvements, you’re likely to change the rituals and routines of the organization, modifying the very culture to move beyond good patient care to excellence.  

Operational Excellence can help you help each member of the organization improve processes every day, enhancing patient outcomes and creating a better patient experience efficiently and effectively.  

About the author

Nancy Bach

Nancy Bach has spent more than 20 years in the industry as a quality and operational excellence practitioner and manager. In private consulting, she creates and delivers a Lean Certification course, provides Green Belt training and works with multi-functional organizations to develop strategy and implement process improvement.