Saint Göran Hospital

May 28th, 2013 at 3:00 pm by David Farrar

The Economist reports:

SAINT GORAN’S hospital is one of the glories of the Swedish welfare state. It is also a laboratory for applying business principles to the public sector. The hospital is run by a private company, Capio, which in turn is run by a consortium of private-equity funds, including Nordic Capital and Apax Partners. The doctors and nurses are Capio employees, answerable to a boss and a board. Doctors talk enthusiastically about “the Toyota model of production” and “harnessing innovation” to cut costs.

A hospital owned by equity funds and run like a car company? The instinct would be to deplore it as everything that a hospital shouldn’t be. But what is the reality?

The hospital today is organised on the twin lean principles of “flow” and “quality”. Doctors and nurses used to keep a professional distance from each other. Now they work (and sit) together in teams. (Goran Ornung, a doctor, likens the teams to workers in Formula One pit stops.) In the old days people concentrated solely on their field of medical expertise. Now they are all responsible for suggesting operational improvements as well.

So staff are empowered.

One innovation involved buying a roll of yellow tape. Staff used to waste precious time looking for defibrillator machines and the like. Then someone suggested marking a spot on the floor with yellow tape and insisting that the machines were always kept there. Other ideas are equally low-tech. Teams use a series of magnetic dots to keep track of each patient’s progress and which beds are free. They discharge patients throughout the day rather than in one batch, so that they can easily find a taxi.

The best ideas are often simple. My staff came up with the idea of using Facebook to organise rosters. It turned what was teh most challenging part of our operations to simplicity – as it allowed staff to arrange their own replacements.

St Goran’s is the medical equivalent of a budget airline. There are four to six patients to a room. The decor is institutional. Everything is done to “maximise throughput”. The aim is to give taxpayers value for money. Hospitals should not be in the hotel business, the argument goes. St Goran’s has reduced waiting times by increasing throughput. It has also reduced each patient’s likelihood of picking up an infection. However, scrimping on hotel services means that it has to invest in preparing patients for admission and providing support after they are released.

Sounds all positive. Reduced waiting times, reduced infections, better pre and post admission support.

has gone further than any other European country in embracing the purchaser-provider split—that is, in using government money to buy public services from whichever providers, public or private, offer the best combination of price and quality. Private firms provide 20% of public hospital care in and 30% of public primary care. Both the public and private sectors are obsessed with lean management; they realise that a high-cost country such as must make the best use of its resources.

I think it is a pity the funder provider split was never fully implemented in NZ.

St Goran’s also acts as a hare for Capio, one of Europe’s largest -care companies, with 11,000 employees across the continent and 2.9m visits from patients in 2012. Sweden is Capio’s biggest market, accounting for 48.2% of its sales (France comes second with 37.6%). The firm performs 10% of all Swedish cataract operations, and much more besides. Capio thinks it can make huge savings in other countries by transferring the lessons it has learned in Sweden. The average length of a hospital stay in Sweden is 4.5 days, compared with 5.2 days in France and 7.5 days in Germany. Sweden has 2.8 hospital beds per 1,000 citizens. France has 6.6; Germany, 8.2. Yet Swedes live slightly longer.

A great stat.

Tags: ,

8 Responses to “Saint Göran Hospital”

  1. Adolf Fiinkensein (2,913 comments) says:

    Charter Hospitals, eh?

    What are we waiting for?

    Wonder if they’ll have room for all those Muslims with bullet wounds next week?

    Vote: Thumb up 1 Thumb down 1 You need to be logged in to vote
  2. hmmokrightitis (1,595 comments) says:

    They follow a Kaizen Lean – from Toyota – way of working, which calls for constant improvement. Works well in any environment where ‘flow’ is a part of an extended organisational view of the supply chain – in this case beds, patients etc.

    Had several discussions around this with DHB’s in NZ. Will not work here whilst the beauraucrats have the hotel view, and Dr’s think they know how to deliver process change.

    Get to the gemba and find out dammit!! :)

    Vote: Thumb up 3 Thumb down 0 You need to be logged in to vote
  3. Data (22 comments) says:

    Social Democracy in Sweden has always been built on partnership between the government, corporations and unions combined with generous welfare and high taxes. Interesting to see you promoting it, DPF.

    Vote: Thumb up 1 Thumb down 1 You need to be logged in to vote
  4. burt (8,294 comments) says:

    Will never work here… If it were tried and worked it would be reversed as soon as Labour next take office.

    The key question for Labour will be: Has it increased union membership numbers and therefore increased donations to the Labour party ?

    Vote: Thumb up 5 Thumb down 0 You need to be logged in to vote
  5. Kimble (4,442 comments) says:

    Gay marriage and adoption.
    A market for organs.

    Check your real reaction to either of those statements.

    The most negative of your reactions is how too many people feel when they hear ‘private sector healthcare’ for anything to change in NZ.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  6. GPT1 (2,122 comments) says:

    Time for another Young Nats sell the hospitals remit

    Vote: Thumb up 0 Thumb down 1 You need to be logged in to vote
  7. Rex Widerstrom (5,354 comments) says:

    Of course when the Swedes actually manufactured cars, they went bust. Which saddens me to say as I loved Saabs and until earlier this year had driven four of them in succession, but now parts are getting too hard to find, as are people who know how to service them.

    They were excellent cars – none of mine ever let me down – stylish and reliable, if slightly quirky (like most things Swedish in fact). They just didn’t ever get the business model right.

    However, scrimping on hotel services means that it has to invest in preparing patients for admission and providing support after they are released.

    I suspect this has much to do with their success. Successful private prison operators also realise that follow-up after release might seem an unnecessary expense but in fact saves money (in their case by reducing recdivism, a measure on which they’re paid). Institutions, even efficient ones, are incredibly expensive to run compared to community-based interventions.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  8. Viking2 (11,541 comments) says:

    Will not work here whilst the beauraucrats have the hotel view,

    Hotel view eh?

    No self respecting hotel would employ the caterer’s the DHB’s do. 8O

    And while unions can strangle management to protect their salries and Maori’s can insist on nurses learning that dumb as language it can never ever succeed.
    Indeed if it weren’t for proping up the scribble faces brigade our hospitals would automatically be more efficient.

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote