IHI's Trillion Dollar Aim - Reduce Healthcare Waste by 50% by 2025

Improvement Insights Blog

IHI’s Trillion Dollar Aim – Reduce Healthcare Waste by 50% by 2025

IHI set a goal to reduce healthcare waste by 50% by 2025. Here’s how to do it with the Trillion Dollar Prescription.

“Hi, I’m Jay Arthur, author of “Lean Six Sigma for Hospitals.” We were just out at the Institute for Healthcare Improvement conference in Orlando, Florida. [There were] like, 4500 medical doctors and nurses and CNO’s and CNMO’s and people all involved in improving healthcare quality. This is their 31st annual conference. (I can tell you based on what I was looking at on the posters, people are not really aggressively going after change…)

“The IHI announced that it’s tackling what they call the “Trillion-Dollar Checkbook.” Their goal is to cut health care waste by 50% by 2025 – that’s five years from now. You know, that’s a big, hairy, audacious goal. Two hundred billion [dollars] would pay for the Affordable Care Act, three hundred billion [dollars] would start to pay down the national debt, right? (Can you say [offsetting the cost of] Medicare, boys and girls?)

“This is a huge opportunity, but we can’t go at it the way we’ve always gone at it, you know? You can’t wait a month or four months for somebody to get trained as a Green Belt or Black Belt and then wait 16 months for a project to finish. No, you’ve got to start getting results right now, right? You need speed, and you’re going to need software to do it.

“The thing is, you don’t have to fix everything there is in a hospital. As little as four percent; narrow your focus. Four percent of what’s going on is producing half the waste and rework. That’s why if we just narrow it down with some data and figure out exactly where the four percent is, fix that, we can get that 50 percent easy! I think we could do it in 24 months if we wanted to instead of five years; I think that’s kind of delaying it. (My guess is they’ll wait until the last year and then there’ll be a huge race to prove that something got better…)

“Here’s the deal: I keep finding people out there that are changing the way they’re approaching Six Sigma and they’re doing it much the way I’ve done for the last 20 years. Here’s my book “Agile Process Innovation. Hacking Lean and Six Sigma for Maximum Results.” This could help hospitals get to Zero Harm pretty fast. It’s a one day training; one day. Then you’re going to need QI Macros software and you’re going to have to give that to everybody so that they can start to make improvements and do data analysis to find the 4%. I find too many people are out there trying to figure out how to save a few nickels and dimes on software, as opposed to trying to maximize the benefit of the improvements that they create with that software.

“Anyway, this is just my observation. I think there’s this opportunity to really dramatically reduce unnecessary costs in health care. A trillion dollars of waste, cut it in half in five years and start paying down lots of debt and things of that nature. Now, you know a lot of our political candidates are out there are saying, “Let’s find some way to tax the rich (or the whatever or businesses or something) to pay for all these social programs we want.” Nobody, but nobody’s thinking about “How do we reduce the costs that are out there?” If we reduce health care costs by 50%, that’s going to dramatically improve how much we pay through Medicare and so on. Nobody’s talking about “How do we reduce the cost of government?” because we know at least a third of that is waste. Nobody’s talking about that.

“So anyway, that’s my Improvement Insight for this week. Let’s create hassle free health care; let’s create a hassle free world. Let’s go out and improve something this week.”