Hospitals must become “focused factories”

EDITOR—I agree with Wilson that we will see many more specialised, niche-type healthcare facilities in the future rather than the all purpose giant mammoths that dominate the hospital landscape currently.1 I believe, however, that this paradigm change will be brought about for reasons of operational efficiency as much as through technological advances.

There is a steep learning curve for most medical interventions. Centres that have a higher volume of cases generally report better clinical outcomes at a lower cost than do centres with a lower volume of cases.2 3 This phenomenon seems to hold true for most interventions irrespective of the technological sophistication involved.2 3 The experience of Shouldice Hospital in Ontario, Canada, is typical. The hospital performs only abdominal hernia repair, a relatively low tech procedure. Yet its excellent outcomes, low relapse rates, and relatively low costs have prompted former patients to celebrate anniversaries of their operations with a gala banquet every year. What is so special about the hospital? It is a “focused factory.”

The term focused factory was first coined by Skinner, a Harvard Business School professor, when he argued that complex and overly ambitious factories were at the heart of the American productivity crisis in the late 1960s and early '70s. He concluded that “simplicity and repetition breed competence.”4 The parallel with the current healthcare industry is striking. Costs are soaring while most health indicators have remained static. In short, there is an efficiency and productivity crisis in healthcare provision.

Previous attempts to rectify this problem have met with little success: managed care has so far failed to satisfy Americans, and reforms of the NHS have yet to deliver its promise. It is high time for hospitals to learn how to focus on a limited and manageable set of services. Hospital chiefs must learn to structure policies and supporting services so that they focus on a few explicit objectives instead of many conflicting and inconsistent goals from different clinical departments.5 Only then can they realise the enormous clinical and financial economies of scale that have made Shouldice Hospital the envy of general surgical units everywhere.

Procedure (or organ system) based focused factories are already proliferating in the form of centres of excellence in some parts of the world.1 I believe that we should continue to move towards the focused factory model in delivering hospital services. Therein lies one solution to our current efficiency and productivity crisis.