According to the article, every hospital in the United States will need to cut, on average, $2.6 million annually from its budget in order to meet the demands of President Obama’s proposed healthcare reform.
Hospital CEOs believe that these cost reductions are possible through the implementation of lean business principles that have not yet been implemented in most hospitals, according to the report.
Mr. Aviles successfully saved his hospital $5 million by instituting a “just-in-time” inventory system and doing away with supply storage, according to the article. Health and Hospitals Corp. also reduced the variety of supplies available, allowing them to negotiate prices at a greater quantity. By offering two varieties of rubber gloves instead of 20, the health system was able to save $4 million in one year alone, according to the article.
The article also mentions various cost-cutting efforts at hospitals across the country who have introduced lean management systems, including Denver Health, whose CEO reported savings of $27 million due to efforts to cut costs and increase productivity.
