Process improvement in stanford hospital’s operating room

SCASE: OIT-41 DATE: 11/23/2004

PROCESS IMPROVEMENT IN STANFORD HOSPITAL’S OPERATING ROOM
I’ll tell you something. When you’ve got a patient there, you haven’t got time to get on the telephone or anything. And I think that’s what’s happening. Now they want us to write this thing, like this paper and all that. You just have to take care of your patient. —Operating room nurse, Stanford Hospitaland Clinics

The office was silent as each of the four operating room (OR) Material Flow Committee (MFC) members considered the question before them. What was the next step for process improvement in the OR? Finding an answer to this question was urgent. Though notable progress had been made in the recent past, complaints from surgeons, nurses and technicians regarding the availability ofsurgical instrumentation had reached an all-time high. Executives at the highest levels of the organization were demanding a solution. The MFC had been formed to create and implement a plan of action. It was June 2004 and Martha Marsh, CEO of Stanford Hospital and Clinics (SHC) was expecting an answer in just under a week; it was crucial they all be in agreement on how to move forward. The committeeconsisted of Sridhar Seshadri, vice president for Process Excellence, Nick Gaich, vice president for Materials Management, Candace Reed, director of the Sterile Processing Department (SPD), and Joann Rickley, director of the OR. Seshadri was a recent addition to SHC’s senior management team. An alumnus of the Wharton School of the University of Pennsylvania, Seshadri joined SHC in June of 2003. Priorto SHC, Seshadri was the vice president and general manager of Healthcare Solutions with GE Medical Systems. Healthcare Solutions was responsible for adapting GE’s Six Sigma methodology and offering it to healthcare providers to increase quality and efficiency of care delivery. His new role in SHC Process Excellence required that he integrate the ideas and concerns of all stakeholders in order toensure a project’s success. Gaich was a sixteen-year veteran of SHC. Gaich had seen change efforts come and go at SHC; he felt that it was time to embrace instrumentation sterilization and processing as a core competency and invest in the compensation and training of employees in that area. Reed was a former OR nurse who had since received an MBA and returned to health care as a consultant andmedical sales representative. Reed had SHC as a client prior to her acceptance of the director position; thus Reed was acutely aware of which areas were most in
Kate Surman and Elena Pernas-Giz prepared this case under the supervision of Professor Stefanos Zenios as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation.Copyright © 2004 by the Board of Trustees of the Leland Stanford Junior University. All rights reserved. To order copies or request permission to reproduce materials, e-mail the Case Writing Office at: cwo@gsb.stanford.edu or write: Case Writing Office, Stanford Graduate School of Business, 518 Memorial Way, Stanford University, Stanford, CA 94305-5015. No part of this publication may be reproduced,stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means –– electronic, mechanical, photocopying, recording, or otherwise –– without the permission of the Stanford Graduate School of Business.

Process Improvement in Stanford Hospital’s Operating Room

OIT-41

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need of capital investment. She believed SHC should focus on investment in additionalinstruments and information technology to improve efficiencies. Rickley had been with SHC for 7 years. In her leadership position, she managed a significant portion of the OR budget and she had a unique understanding of both the surgeons’ and OR nurses’ perspectives. She felt strongly that instrumentation issues resulted in large part from low morale and a lack of cross-functional camaraderie and...