APPLYING LEAN IN DUTCH NURSING HOMES?

APPLYING LEAN IN DUTCH NURSING HOMES?

Thesis

Master of Science in Business Administration

Specialization: Organizational & Management Control

University of Groningen

Faculty of Economics and Business

Author: W. Verschuuren

Student no: 1779575

Address: Vlasstraat 16A

9712 KT Groningen

Tel nr: 0613282788

Supervisor: dr. H. Vrolijk

Second supervisor: prof. dr. H. ter Bogt

Date: 21-08-2013

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ABSTRACT

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Table of Content

2.2. The Application of Lean in Health Care ... 14

2.3. Lean Production & Lean Accounting in Health Care ... 15

2.4. Conclusion ... 19 3. RESEARCH METHODS ... 21 3.1. Research design ... 21 3.2. Data collection ... 21 3.2. Selection criteria ... 22 3.3. Validity ... 23 3.4. Reliability ... 23 4. ANALYSIS ... 24

4.1. The nursing Home Sector & Geriatric Rehabilitation Care ... 24

4.2. Surplus Zorg & Zorggroep Groningen... 26

4.3. Interview findings ... 27

4.3.1. (A) Specify value ... 27

4.3.2. (B) Value stream ... 30

4.3.3. (C) Flow... 33

4.3.4. (D) Pull ... 35

4.3.5. (E) Perfection ... 37

5. DISCUSSION ... 40

5.1. (A) Specify value ... 40

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5.3. (C) Flow ... 42

5.4. (D) Pull ... 42

5.5. (E) Perfection ... 43

6. CONCLUSION, LIMITATIONS & FUTURE RESEARCH ... 44

6.1. Conclusion ... 44

6.2. Limitations & Future research ... 45

7. REFERENCE LIST ... 47

8. APPENDIX ... 53

8.1. Appendix 1 ... 53

8.2. Appendix 2 ... 54

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1. INTRODUCTION

Since the start of this century, health care costs are rising every year in the Netherlands by 4.5 per cent, more than three times the structural growth of the economy. They have reached a total of 92 billion Euros in 2012: 25 per cent of the government’s collective expenditures (CBS, 2013). This unrestrained growth of collective expenditures is untenable in the long run (Taskforce Beheersing Zorguitgaven, 2012). Therefore, it is critical to undertake action in order to control the health care costs in the Netherlands. A large part of health care costs are issued by nursing homes. 36.6 billion Euros were disbursed by the wellbeing care suppliers, which includes the nursing homes.

Since January 2013 the financing structure has changed for nursing homes in the Netherlands. The geriatric rehabilitation care made a transition from budget based financing to performance based financing. Furthermore, the government transferred the Home Care Sector procurement to local authorities. Nursing homes are therefore forced to supply good care against a low cost price, which in reality means that they have to develop a more efficient way of work.

A variety of process improvements have been proposed to address the reported inefficiencies in the health care delivery (Kim, Spahlinger, Kin, & Billi, 2006). One of the methods that could address and help to control the extremely high costs and inefficiencies is lean manufacturing or lean production. The management philosophy of lean production is coming from the manufacturing industry, where it is pioneered by the Toyota Motor Corporation. The lean management philosophy focuses on creating value for the customer and eliminating non-value adding activities in all layers of the organisation. Implementing the lean strategy is reflected in lean production and lean accounting. Lean production is the production process based on the management philosophy of value creation of the customer, waste elimination and the creation of pull production. Lean accounting is focusing on providing information and process control to obtain insights in the results of lean production. Besides, implementing lean should be supported by the employees in the organisation who need to back up the principles of lean thinking.

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complementary decision-making and control system (Fullerton & McWatters, 2004). In order to see if the implementation of the lean method is successful and meaningful organisations that adopt the lean strategy should focus on the adaptation of their accounting systems. Traditional accounting systems are not sufficient to support the lean strategy (Maskell & Baggaley, 2006). The organisations accounting system has to be corresponding to the changed process methods, derived from lean production (Chenhall, 2003). It appears that several companies which changed their business operations still use conventional accounting systems (Fullerton & McWatters, 2002). When the accounting systems aren’t adjusted to the changed processes it isn’t possible to obtain the right information about performances.

In the Netherlands the government introduced several reforms to obtain a better control of performances and costs in health care institutions. In literature it is stated that lean production and especially lean philosophy can be applied in the health care sector. Because of these reforms nursing homes could benefit by introducing a lean method. To obtain an optimal control of performances and costs these lean methods should be supported by accounting systems. This research aims to answer the following question by a case study of two nursing homes:

How can production in nursing homes be lean, and supported by lean accounting?

The two committed nursing homes are Zorggroep Groningen in Groningen and Surplus Zorg in Zevenbergen. To execute this research there is chosen to revise one process within both nursing homes. This process takes place at the department of geriatric rehabilitation care. In order to answer the research question, the main concepts of this research need to be answered. These concepts are lean accounting and lean production in a health care setting. With the use of a literature study the following sub-questions will be answered:

 What is lean production and lean accounting?

 How can lean production be applied in geriatric rehabilitation care?

 How can lean production be supported by lean accounting in nursing homes providing

geriatric rehabilitation care?

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2. THEORETICAL BACKGROUND

In order to see if lean is applied and measured in Dutch nursing homes an introduction in the concept of lean will be explained in this chapter. Paragraph 2.1. will answer the sub question:

What is lean production and lean accounting? Paragraph 2.2. will explain how lean

production is applied in health care services. Paragraph 2.3. gives insight of how lean production can be supported by lean accounting in a health care organisation.

2.1. Lean

The origins of the lean philosophy started at the Toyota Motor Corporation (Ōno, 1988). The production manager of Toyota observed the production of cars at Ford. And he realized that there was too much waste in the production process of Ford. He reviewed the process at Toyota and developed a new system to reduce waste, now known as the Just-In-Time (JIT) system. Three major adjustments were made:

1. Reducing stock space

2. Exact amount of quantity of parts was produced 3. Defects were discovered and repaired in time

Next, the quality of the products was improved by the implementation of the Total Quality Control system, nowadays used by many manufacturers as Total Quality Management (TQM). TQM is a management perspective focusing on continuous improving the company’s performance, and fulfilment of the customer values. Together, the JIT system and Total Quality Control system form the Toyota Production System.

Viewing the production system in this specific way was totally different from the traditional way of cost reduction, which is often done by slashing the budgets (Åhlström & Karlsson, 1996). The Toyota Production System was later on labelled by Womack, Jones and Roos (1990) as lean production and lean thinking.

8 Lean Philosophy Lean Strategy Lean Accounting Lean Production Lean Thinking

Figure 1: Cohesion between, Lean Strategy, Lean Production and Lean Accounting based on Lean Philosophy. Supported by lean thinking.

Based on the diversity of visions and definitions given by different authors, it can be concluded that there exists no uniform and clear definition of ‘lean’. Organisations are not able to implement a uniform lean formula which will lead to optimal results, but all authors share a similar message: lean compasses the elimination of waste in the production process, focuses on value-adding activities for the customer and creates a flow in the production process. Therefore implementing lean will lead to reduced costs in the production process, lean aids competitive improvements and decreases the quality constraints as described also by other authors (Billesbach, 1994; Nystuen, 2002; Sheridan, 2000; Sohal & Egglestone, 1994).

Lean is also applied in other industries, such as the textile and clothing industry (Bruce, Daly, & Towers, 2004), military (Cook & Graser, 2001) and aerospace industry (Haque, 2003). As Bhatia and Drew (2006) state there is little doubt that lean can be applied to the public sector. Lean as a method is applicable in almost any environment, if the business process can be defined at the working level.

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Organisations who are operating according the lean philosophy develop a lean strategy, lean production and lean accounting, see figure 2. In figure 2 are the relations between the lean concepts denoted. A successful implementation of lean requires full integrated systems of these elements into the organisation (Fullerton, Kennedy, & Widener, 2013; Maskell & Baggaley, 2004; Womack & Jones, 2003). Lean strategy is the continuous focus to eliminate waste in all processes with the strive for continuous improving. Lean production, also being called lean manufacturing, is concentrating on the production process. More specifically, it is focusing on the added value for the customer, the elimination of waste within the process and the creation of pull production. Lean accounting is a way of reporting and controlling the lean process, in such a manner that the results of lean production are measurable (Maskell & Baggaley, 2004).

In order to support the lean strategy, lean production and lean accounting employees should act and think according the lean philosophy, also called lean thinking. In order to create lean thinking among employees, it is essential that staff members carry out the lean philosophy (Kaynak, 2003).

The operationalization of the lean strategy is reflected in lean production and lean accounting. Therefore, lean production and lean accounting will be discussed in-depth in the following two paragraphs.

2.1.1. Lean Production

Lean production is created within a company with the use of the lean strategy (figure 2). The production processes should be arranged according to the guidelines of lean production. Womack and Jones (2003) identified five guidelines or principles to enable lean production. These principles are:

1. Precisely specify value

2. Identify the value stream for each product and eliminate wasted activities 3. Make product flow without interruptions

4. Let the customer pull value from the producer 5. Pursue perfection

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The first principle starts with identifying what value is. Value can only be defined by the ultimate customer. Therefore, the value has to be expressed in terms of a specific product, which meets the customer’s needs at a specific price at a specific time (Womack & Jones, 2003). Young, Brainsford, Connell, Davies, Harper and Klein (2004) support this in general. The second principle states that a value stream has to be defined for each product. A value stream can be defined as all activities required to obtain the end product (van der Merwe & Thomson, 2007). Activities can be either value adding or non-value adding. Some activities in the process can be non-value adding, but are necessary to obtain the end product.

The second principle also consists of eliminating waste. There are seven commonly accepted wastes parameters (Monden, 2012):

1. Transportation 2. Motion 3. Waiting 4. Over processing 5. Inventory 6. Defects 7. Overproduction

The third principle (make product flow without interruptions) is making the remaining value-creating steps flow in the process. Frequent stop-and-go operations are according to Shah and Ward (2007) characteristics of batch and queue systems. In order to create continuous flow in the production process, it is essential to produce without these stop-and-go operations. The requirements for achieving continuous flow are a flexible, dedicated and an engaged workforce so that variability in demand, supply and processing time can be managed (Hopp & Spearman, 2004). Thinking outside the functions and departments of the organisation is needed to create flow. By redefining the work of functions, departments, and firms continuous flow can be created and value streams maintained (Womack & Jones, 2003). Redefining the functions will affect employees of the company and therefore, the workforce should contribute in making the value activities flow.

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moment he or she wants it (Womack & Jones, 2003). Young et al. (2004) state that the process must be flexible and be geared to individual demands.

The fifth principle (Pursuing perfection in the production process) is also referred to as continuous improvement. Perfection is defined by Nelson-Peterson and Leppa (2007) as the complete elimination of waste so that all activities along the value stream create value. There is no end to the process of reducing effort, time, space, cost, and mistakes while offering a product nearly to what the customer actually wants. This way of continuous improving is thrives the organisation to perfection.

To sum up, lean production is based upon these five lean principles: Focuses on identifying the value of customers, mapping the value stream and elimination of waste, creating a smooth flow, produce according to pull and continuous improvement. Fulfilling the five principles enables organisation to produce according the lean philosophy.

2.1.2. Lean Accounting

As supported in the literature, for a successful implementation of lean in business, the lean philosophy has to be applied in the entire organisation. A key to the lean transformation is accounting. It is the primary information source for decision making (Maskell & Kennedy, 2007).

Van der Merwe and Thomson (2007) define lean accounting as the attempts to derive management information based on lean principles and should lead to clear, timely and understandable information. The main objective of lean accounting is to measure the impact of lean improvement projects in business processes (Brosnahan, 2008; Maskell & Baggaley, 2004; Woehrle & Abou-Shady, 2010). Thereby, lean accounting is a new accounting approach which stems from the growing interest of companies in embracing lean thinking culture.

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Baggaley, 2004; Maskell & Kennedy, 2007). Lean accounting provides companies several advantages over traditional accounting. Traditional accounting is normally linked to mass production and originates from the nineteen eighties (Kaplan, 1983). Over the years there have been several major developments in the realm of management accounting methods, which makes comparing lean accounting with traditional accounting outdated. Examples of these developments are Activity-Based Costing (ABC), quality costing, target costing and throughput accounting. These methods are not suitable for implementation in a lean organisation, as they are in contradiction with the lean philosophy, according to several authors.

In the literature, there is no suitable way given in how to apply lean accounting into accounting systems. It may include, according to Brosnahan (2008), methods such as arranging costs by value streams, changing inventory valuation technics, and changing financial reports so that they include non-financial information. Maskell and Kennedy (2007) mention various techniques to apply lean accounting, but they do not refer to the technique itself. There are alternative lean accounting concepts, which complicates the use of a suitable and uniform way of lean accounting (Kroll, 2004). Furthermore, Kroll (2004) ascertains that lean accounting may be performed by the use of different practices. This abstractness in how to apply lean accounting makes the concept vague and therefore a clear definition cannot be given. However, to build on the lean accounting concept, this study will discuss the main management accounting methods to the companies with lean philosophy in two large areas of management accounting: product valuation and performance assessment.

Product valuation

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According to Maskell and Baggaley (2006) value stream management needs to be measured by value stream costing. Value stream costing is a simple summary of direct costing of the value streams. This system is characterised by collecting the value stream costs that are seen as direct costs and excluding all costs unrelated to the value stream (Maskell & Baggaley, 2006). Examples of value stream costs are all labour costs in the value stream, costs of materials to be transformed, costs for operating machines and equipment, occupation and maintenance of the workplace costs, and all other costs directly associated with the value stream. According to Huntzer and Kennedy (2005) this costing system is triggering production only when there is an order, and the system motivates to sell all products kept in stock. This way of cost analysis demonstrates where and how costs are originated: it highlights the waste areas; it presents the actual costs and not the budgeted ones; it identifies bottlenecks; and it highlights opportunities to manage capacity more efficiently. Furthermore, it provides information that is clearly perceptible to all the members of the value stream, which leads to good decisions, motivation to implement lean improvements along the entire value stream and clear financial reporting.

Performance Assessment

The second important area in management accounting is performance assessment, which measures the performance by systematically observing performed tasks. In order to follow lean thinking, the organisations’ performance should not solely be assessed by financial measures. Performance assessment must be supported by operational measures and has to be performed by work cell and by value stream and should involve all the company’s elements in the process in order to advance towards continuous improvement (Kennedy & Brewer, 2006; Maskell, 2000; Maskell & Baggaley, 2006). Companies who are implementing the lean philosophy need new performance assessment measures that allow control and lead towards continuous improvement of processes. These performance measures should reflect the lean principles. Several authors state that lean companies should act on three areas (Maskell & Baggaley, 2004; Maskell & Kennedy, 2007):

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The first area is the work cell. The measures should fit the purpose of the work cell, which is to produce, in a continuous flow, quality products, which have to be ready at the time required by the consumer.

The second area where performance should be measured is the value stream. According to Maskell and Kennedy (2007) the goals of the value stream should be the following: deliver the product to the client as soon as possible; obtain the lowest cost for the product; increase profitability and reduce inventory. In order to measure these goals, it is crucial to apply the measures in the implementation stage with the use of multifunctional teams.

According to Maskell and Baggaley (2006) visual presentation of financial and non-financial measures is required to assess the performance. A way of representing these measures is the box score. A box score contains a summary of the value stream with its operational performance, financial performance, and how the capacity is used.

Several authors have shown ways of how lean accounting should be integrated in the production process and measurements assessed. However, the authors base their methods of product valuation and performance assessment on the manufacturing industry. This subjective approach can be different in other industries and companies. Other authors support the variety of ways to apply lean accounting in a lean producing organisation. To me, as the author of this study, there are no concrete ways of applying lean accounting in an organisation, and can be done differently by any company. Lean accounting is missing uniform and concrete accounting practices in order to support lean production.

2.2. The Application of Lean in Health Care

Womack and Jones (2003) advocate the application of lean thinking in health care systems. First, by putting the patient in the foreground, and including time and comfort as key performance measures of the system. Second, having a multifunctional team taking care of the patient. And third, actively involving the patient in the process.

Karlsson, Rognes and Nordgren (1995) state that the focus on zero defects, continuous improvement, and JIT makes lean production especially applicable in health care. Other authors support the application of lean thinking in health care services (Miller, 2005; Young, Brailsford, Connell, Davies, Harper, & Klein, 2004).

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The primary customer

The client or patient must be seen as the primary customer in health care services. It is after all the patient who justifies the existence of these services. However, in public health care this is sometimes hard to accept since the patient does not directly pay for the services. Nevertheless, the main mission of health care is to treat and cure patients, who are the end-consumers in the care process (Kollberg, Dahlgaard, & Bhremer, 2006). Therefore, it is the patient which should define what creates value in health care.

Unpredictable activities

JIT in health care means balancing the demand for care with the capacity in order to eliminate waste such as waiting times and overcapacity (Kollberg et al., 2006). Because of the fluctuation in the demand for care, the difficulty in health care organisations is to plan and manage the flow of clients (Gardell, Gustafsson, Brandt, Tillström, & Torbiörn, 1979). Health care institutions should be continuously prepared for unexpected demand for care.

Another difficulty related to JIT concerns the identification of a demand on which the flow should be based. An initial demand defined by a patient, for example an aching arm, may end up in a totally different demand, such as heart transplantation. Thus, the differences in demand may make the application of JIT more complicated in health care than in the manufacturing industry.

It can be concluded that lean is applicable in health care. However there are some difficulties in applying the lean principles in health care settings. First of all, the difficulty to determine the primary customer and the value for the customer. Next, adjusting the demand for care to the capacity, and therefore the application of JIT is more complicated.

2.3. Lean Production & Lean Accounting in Health Care

The previous paragraph demonstrated the application of lean production inside the health care industry. This paragraph shall focus on how lean production can be applied and incorporated in the information provision and registration systems (lean accounting) in a health care organisation.

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Kollberg et al. (2006) identify, based on these lean principles, critical success factors (CSF) that indicate a change towards lean.

A CSF are those few things that must go well to ensure success of an organisation or project (Boynton & Zmud, 1984). The CSF represents those managerial or enterprise area, that must be given special and continual attention to bring about high performance. The few things called by Boynton and Zmud (1984) are subject to various variables, such as characteristics of the industry, firm, and other environmental factors. Therefore, CSF are those characteristics, conditions, or variables that when properly sustained, maintained, or managed can have significant impact on the success of a firm competing in a particular industry. An example of a characteristic of a CSF is price advantage, or a condition such as capital structure. With the use of CSF’s are the company’s strategy, objectives and goals directly linked to the processes of the organisation (Rosa & Machado, M. J. C. V., 2013). In this study are the CSF examining if lean production is applied according the five lean principles. The lean principles define what has to be done so that the company’s lean strategy can be followed (Maskell & Baggaley, 2004; Maskell & Baggaley, 2006).

The framework used by Kollberg et al. (2006) is based on the Swedish health care sector. The Swedish health care sector is different from the Dutch one. However, the framework measures to what extent the lean principles are applied. In this study is the framework (appendix 1) of Kollberg et al. (2006) adjusted to the geriatric rehabilitation care in Dutch nursing homes.

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1. Specifying value

According to Womack and Jones (2003) value can only be defined by the customer. Van Haastert (2012) state that there are several requirements which Dutch clients of geriatric rehabilitation care value. The first requirement of what clients’ value is effectiveness. The rehabilitation should be designed in such order that it is linked to the goals of the client. The next requirement is that the medical quality should be of a sufficient level. The third requirement that the client values is participation in decision making and the care should be built on respect for the client’s right and integrity. The last requirement identified is smooth flow. Clients value smooth transitions between different phases of rehabilitation and without delays (Van Haastert, 2012). Based on these values CSF such as effectiveness, medical

quality, participation and respect, and smooth flow are of interest for specifying value from a

client’s perspective. These CSF are depicted in framework one (appendix 1).

2. Identifying value stream

Value is primarily created when a patient interacts with the health care staff during diagnostic and/or treatment (J. Womack, Jones, & Drescher, 2006). Identifying the specified value can be done by the use of process mapping. Mapping every activity or individual action of the client gives the opportunity to analyse the patient’s flow. Also waste can be identified. Identifying the value stream begins with the mapping the activities of the client from first contact until the treatment is completed. This process mapping is translated in the framework as the CSF: process mapping.

The second lean principle is also about eliminating waste (Womack & Jones, 2003). Every health care organisation is confronted with different kind of wastes. Although all seven wastes are of importance to improve an organisation, this study will focus on three kinds of waste. The first waste is delay. Delay is crucial considering the fact that the clients value a smooth flow in the rehabilitation process. The second waste is error prevention. Clients value good medical quality and errors could have devastating consequences. In addition, errors in the process would affect the quality of care in a negative way. The third waste is unnecessary processing. Making processing steps that are not actually needed decreases the effectiveness of the process and is in contradiction to what the customers of geriatric revalidation value. All the three identified wastes are translated in the following CSF in the framework: Delay, Error

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3. Flow

Creating a flow can be achieved by focusing on the patient and following him or her from the beginning to the end, ignoring traditional boundaries of jobs, departments, and functions instead creating a continuous flow over these boundaries (Kollberg et al., 2006). This could lead to redesigning processes in order to eliminate waiting times, failures and backflows. Womack and Jones state that each product or service should be managed by a team having different insights in the process in order to shorten cycle time. In health care these teams are performed by multifunctional teams. Multifunctional teams are smoothing the flow, as they decrease the patient’s ‘travel’ through the health care system and problems might be managed and solved within the team. Multifunctional teams can smooth the flow of the value stream. This is depicted in the framework as the CSF: Multifunctional teams.

Another way of smoothing the flow is by making the information visible and transparent for everyone. Transparency and visibility motivates people to improve the processes (Kollberg et al., 2006). Furthermore, transparency is important in order to measure the value stream (Maskell & Baggaley, 2004). Timely collection of information helps to improve the flow. Maskell and Kennedy (2007) advocate that timely collection value stream information provides transparency of information, which in turn leads to good decisions and motivation to implement lean improvements across the entire value stream. This way of smoothing the flow is translated in the framework as CSF: Transparency and timely collection of information.

4. Pull

The essence of the pull strategy is the fact that the customer pulls value from the firm instead of pushing already designed products onto the market. In the service sector is a pull strategy often built into the production process when the service is created in interaction with the customer and cannot be stored for future use (Grönroos, 2001). This statement holds in this study where the customer is defined as the primary customer.

The reason for a company being on a market is called the core service. According to Grönroos (2001) are there three basic elements that constitute the core service process. These elements are accessibility, interaction and the customer. In my research are the elements translated in:

1. Accessibility to health care services

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Every health care organisation should focus on these elements in order to fulfil t he production process with the client. The first element is translated to the CSF: Accessibility. Interaction with the health care organisation only can be performed by the participation of the patient. Therefore, this CSF is depicted in the framework as Interaction and participation.

5. Perfection

Working without continuous improvement and making failures may have dramatic consequences for health care organisations. According to Crosby (1979) failure may be caused by two factors: lack of attention and lack of knowledge. In order to prevent failures, each individual must be encouraged to perform the things right the first time (Crosby, 1979). The geriatric rehabilitation clients value zero defects. Perfection can only be achieved by striving for continuous improvement and controlling the process, and are translated to the CSF: Continuous improvement and Process control.

2.4. Conclusion

Lean as a concept focuses on value-adding activities for the customer, tries to eliminate waste in production process and is continuous improving. Lean can be implemented in organisations by adopting the lean philosophy. The lean philosophy must be integrated in the strategy, production processes and in the accounting systems of the organisation. To be lean, companies should implement the philosophy in all systems and should be supported by these systems and employees. In order to produce according the lean strategy, organisations should fulfil the five lean principles in the production process. These lean principles are focusing on specifying the value of customers, identify the value stream for each product and eliminate the waste, making a smooth product flow, let customer pull value from the producer and pursue perfection.

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reflected in lean production and lean accounting. Both concepts should be present to fulfil the lean strategy and philosophy.

Although the literature states which techniques, methods and practices should be used to operationalize lean accounting, a uniform and concrete way is lacking. Most authors argue that the provision of information must be provided in a clear and simple way. It can be concluded that lean accounting is an accounting practice at which the provision of information and the registration in the accounting systems are based upon the lean principles.

The available literature is uniform in the application of lean production in the health care industry. Lean production can be applied in the health care industry. The five lean principles can therefore be applied and two differences in the application of lean production in the relation to the manufacturing industry are present. First of all, in health care are many different stakeholders involved in the process. The primary customer is the client or patient who needs treatment and care. Secondly, unpredictable activities makes demand for care unknown and therefore complicates the smoothing of the flow.

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3. RESEARCH METHODS

This research can be labelled as exploratory research. Exploratory research is known for using case studies (Cooper, Schindler, & Sun, 2006). This research makes use of two case studies to form a better understanding of the context, to refine theoretical background and to generalize findings. According to De Vaus (2001), qualitative research is mainly characterized by the descriptive approach of data. This type of research is often seen in case studies. Quantitative research is mainly characterized by exactly measuring and explaining a theory or phenomenon. Hence it’s descriptive nature, this paper can be characterized as qualitative research and is an in-depth case study.

3.2. Data collection

The theoretical analysis has been performed using academic journals, books and reports which has been obtained by thoroughly screening of databases.

Empirical data is collected in both nursing homes by using semi-structured interviews. This method is used for his open-ended response strategy and to gain more in-depth knowledge, but also to provide a clear structure. In each nursing home are two interviews performed with one respondent. The respondents chosen need to have a good understanding of the geriatric care rehabilitation processes and need to be involved in the information provision and performance measurements. Out of these criteria is at Surplus chosen for the care consultant. The care consultant is involved in all the care processes of the geriatric rehabilitation client and is part of the multidisciplinary team in which information of the care processes are discussed. At ZGG is the treatment centre specialist manager interviewed. The treatment specialist manager is responsible for all doctors, therapists, nurses, dieticians and psychologists that are in direct contact with the clients at ZGG. The manager is involved in the geriatric rehabilitation care and needs to have a thoroughly understanding of the processes in order to function. The manager is daily obtaining information of the geriatric rehabilitation at which decisions are made.

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of the interviews was one hour. In order to increase the reliability the interviews were audio-recorded.

3.2. Selection criteria

In this research paper two different nursing homes are investigated. By investigating two nursing homes, the results can be compared (Cooper et al., 2006). Nursing homes are selected, based on the next criteria:

First, the nursing home should be Dutch. Hospitals, private clinics and other health care providers are compared to nursing homes operating in a different sector of the industry. Workflow, for specific client groups, differ between nursing homes and hospitals. Mainly, this is due to different directives where nursing homes and hospitals must comply to. The CSF can be better compared when both health care providers operate in the same health care sector.

Secondly, geriatric rehabilitation care has to be present in the nursing home. To define whether lean production is applied and supported by lean accounting, actually, it is important that patients have a clear beginning and ending of the care process. In geriatric care, there is a clear beginning and ending of the care process, as the maximum amount of time is set at 6 months.

Thirdly, both nursing homes should provide care to the same client groups of geriatric rehabilitation. The nursing homes must provide elective orthopaedics, CVA, amputation and trauma care. By providing the same sort of care to client groups, nursing homes are specialized in the same care and therefore increasing the opportunity of working in a similar way.

In the fourth, and last place, the health care providers must provide a minimum size of 8 places in a unit of geriatric rehabilitation care. In order to guarantee specialisation in the operationalization of the care in a nursing home this size is required. In this way lean production and lean accounting can be better compared with one another.

Based on these four criteria, two health care organisations have been selected for participating in this research project. These are:

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Case 2: Zorggroep Groningen (ZGG), is a health care institution providing different services such as residency, care including geriatric rehabilitation and other services for the elderly in the province Groningen.

3.3. Validity

According to Cooper et al. (2006) is internal validity present when the obtained results correspond with actuality. By making use of different sources this research increases the validity. Furthermore, the respondents chosen are operating in a different nursing home situated in another region of the Netherlands. Therefore, this research attempted to reflect the actuality. This research paper made use of semi-structured interviews. In these interviews, the interviewee had the opportunity to express his own opinion and feelings, which benefits the internal validity. It increases the realistic view of this study.

A certain amount of subjectivity will always be present. Subjectivity might be present by the interviewer in making own suggestions or directions. However, by attempting to keep an objective mind set during the interviews, I tried to guarantee the internal validity as much as possible.

3.4. Reliability

Reliability is characterized by measurements concerned with accuracy, precision, and consistency (Cooper et al., 2006). The interviews are standardized as much as possible with the use of a topic-list (appendix 3), in order to increase the reliability of this research. Furthermore, the reliability is enlarged by documenting information, tape recording and taking notes during the interviews. The interviews were held at the own familiar nursing home location of the interviewee. The interviewees were not, in any way, related to one another or the interviewer. This increased the reliability of the research.

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4. ANALYSIS

This section presents the most important findings of the empirical research conducted at the geriatric rehabilitation department of the nursing homes Surplus Zorg and Zorggroep Groningen. This section is divided in three parts. The first part, general information of the nursing home sector and geriatric rehabilitation is given. In the second paragraph, provides information about the nursing homes Surplus Zorg and ZGG. The third paragraph of the analysis discusses the findings of the interviews of both nursing homes.

4.1. The nursing Home Sector & Geriatric Rehabilitation Care Nursing Home Sector

Nursing homes in the Netherlands are part of the sector of Dutch Nursing and Home Care Sector (Nederlandse Verpleging, Verzorging en Thuiszorgsector; VVT). Nursing home care is care for a longer period of time which is given in a care institution for 24 hours a day. This type of care is called intramural care.

Nursing homes are divided in four types of care: geriatric revalidation (multidisciplinary care for vulnerable elderly), psycho geriatric care (care for mentally impaired elderly), palliative care (terminally ill) and care for patients with neurological diseases. There are four degrees of care given to patients: personal care, nursing, supervision and treatments (Centrum Indicatiestelling Zorg, 2013). Figure 1 depicts the different forms of intramural care. This research will focus on intramural care.

Figure 2: VVT sector

VVT Sector

Intramural care Extramural care

Personal care Nursing Treatment Supervisio VVT Sector

Intramural care Extramural care

Personal care

Nursing

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Financing of nursing homes is based on the Health Insurance Act (Zorgverzekeringswet; ZVW) and Exceptional Medical Expenses Act (Algemene Wet Bijzondere Ziektekosten; AWBZ). The AWBZ is intended for elderly, chronically ill and disabled people who are in need of long-term care. The AWBZ is financed by governmental contributions, mostly derived from taxes. The ZVW, on the other hand, is arranged in such a way that clients pay a health insurance premium to a health care insurance company.

Geriatric Rehabilitation

Geriatric rehabilitation is a part of nursing home care, as described above. Geriatric rehabilitation is focused on recovery of independency of elderly after an acute illness or functional relapse. (Verenso, 2010). Care is focussing on partial or total recovery, so patients can return to their former living situations. The revalidation care is directed to elderly and their fellows. The elderly client is characterized by multiple morbidities and vulnerability. In the revalidation process it is therefore very important to treat these morbidities. There are five different client groups in geriatric rehabilitation:

1. Cerebrovascular Accident (CVA; strokes) 2. Elective orthopaedics

3. Trauma 4. Amputations

5. Remaining care (long diseases, heart diseases, neurology, etc.)

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2012). The DTC-systematics are introduced in 2005 to obtain more transparency about prices and performances in health care.

4.2. Surplus Zorg & Zorggroep Groningen Surplus Zorg

Surplus Zorg was founded through mergers of different health care institutions in Brabant and is part of Surplus Groep. Surplus Groep offers activities in the realm of well-being, care, housing, comfort and childcare. Surplus Zorg offers diverse health care services in West and Central Brabant. The institution provides home care, rehabilitation, day care and different kinds of treatment. Surplus Zorg has 1,996 employees which amounts to 1,332 full-time employees. Its total turnover was 83 million euros in 2012. The capacity of nursing homes comprised 393 residences with treatment places and 328 residences without treatment places. These places are divided over eight different locations. Treatments range from geriatric rehabilitation care and somatic care to psychogeriatric care. Geriatric rehabilitation had a turnover of 6 million euros and provided 31,417 days of care to its clients. The type of clients that receive geriatric rehabilitation care at Surplus varies from stroke victims to people with amputations. Geriatric rehabilitation clients at Surplus go through six stages, also known as the ‘path of care’. These are: Demand for care, First visit, Intake, Treatment, Control (following up) and Discharge. The path of care is depicted in appendix 2A.

Zorggroep Groningen

Zorggroep Groningen (ZGG) emerged in 2005 through mergers between different health care institutions in the province of Groningen. ZGG offers a wide range of health care services in five locations, each with its own specialisation, throughout the entire province of Groningen. The institution focuses on organising residency, care, and services particularly for the elderly. ZGG has 1,290 employees that together have the equivalent of 723 full-time employees. The total capacity of ZGG is 722 residents while the ZGG’s total turnover was 62 million euros in 2012. The capacity comprised 412 residences with treatment places and 310 residences without treatment places.

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indicates roughly the process that every geriatric rehabilitation client has to go through (Appendix 2b).

4.3. Interview findings

This paragraph presents the results coming forth out of the interviews. The findings represent whether the CSF’s for each lean principle are fulfilled by both nursing homes or not. Each CSF starts with the explanation which KPI is used to measure the CSF. Then, the outcomes of the CSF for both nursing homes are denoted. The letter standing in front of the headings are related to the CSF’s and lean principles in the framework which is represented in appendix 1.

4.3.1. (A) Specify value A1. Effectiveness

This study has assessed the CSF ‘effectiveness’ by researching whether or not evaluations are performed at the health care institutions to indicate if the client is rehabilitating according schedule. An evaluation can help measure a client’s current state of health during the rehabilitation process.

Surplus

According to the respondent, effectiveness is of great importance to the client because this person would like to regain self-reliance as quickly as possible. The health care consultant argues: “Every client is evaluated on a weekly basis during the Multidisciplinary Team

Meeting (MDO) {meeting of a client’s treatment officers from different disciplines, such as dietetics, occupational therapy, psychology, etc.} to monitor the progress of the rehabilitation process.” The client is always directly involved in evaluations: “The treatment officers always first speak with the client in preparation of the MDO, for instance during the treatment or in a private conversation with his or her personal caretaker.” The effectiveness

is being evaluated at Surplus on a weekly basis and the client is on an individually basis approached by its personal caregiver.

ZGG

The respondent at ZGG claims that the moments of evaluation highly depend on a client’s trajectory: “One client might be here for a total of seven days, another may stay for half a

year.” There are at least two evaluations at ZGG and in the meantime no evaluations are

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end, while evaluations in between depend on the client, the treatment officers, and caretakers.” At ZGG, the effectiveness is adjusted to the individual rehabilitation process and

the measuring of the effectiveness takes place less frequently.

A2. Quality of medical care

The CSF ‘quality of medical care’ can be assessed by scrutinising co-operation and coordination of treatment officers (therapists, physicians and other professions of different disciplines) and caretakers (nurses and employees taking care of the client’s needs) in order to come to a coherent diagnosis. The degree of co-operation indicates if the care that a client receives has been well-coordinated between treatment officers and caregivers. Good coordination improves the care provided.

Surplus

Besides the quality system, in which arrangements, norms, and responsibilities have been written down, the quality of care is secured by making reports about the rehabilitation process. The respondent of Surplus states: “Every treatment and event is reported in

electronic client files. This way specialists (treatment officers) can indicate the things that go well and the things that could still be improved. Afterwards this information is coordinated so that the quality of care is ensured.” At Surplus, a degree of coordination occurs between

treatment officers and caretakers. Treatment officers and caretakers have a good insight in a client’s rehabilitation process as a consequence of the electronic client files.

ZGG

The quality of care at ZZG is determined by using national standards with which the institution is obligated to comply: “In any case, the requirements of the Dutch care

inspectorate (Zorginspectie), care insurers, health care office and professional groups are being compared. By focusing on their requirements you already have clear quality standards to comply with.” The treatment officers and caretakers work together by means of a

multidisciplinary team meeting to uphold the quality of care. Further coordination takes place with the use of client files. The respondent of ZGG indicates: “Treatment officers record

useful and necessary information regarding the rehabilitation process of every client in client files.” The quality of care at ZGG is based on requirements set by interest groups. In addition,

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A3. Participation and Respect

The CSF ‘participation and respect’ has been assessed by verifying whether or not these institutions make use of a client satisfaction index. This index can be used by clients to indicate if they are receiving the right kind of information to be involved in decisions while they may also indicate if they are treated respectfully throughout the entire process.

Surplus

At Surplus client satisfaction is not measured with the use of a client satisfaction index. Instead, conversations between clients and treatment officers are used to assess client satisfaction. Accordingly, the respondent states: “Whenever problems occur or a person is

dissatisfied, we usually notice this because, for instance, this person does not eat well.” At

Surplus client satisfaction is therefore measured by identifying dissatisfaction during the process of care.

ZGG

Client satisfaction is measured in two ways at ZGG, that is, through conversations and an evaluation form. The emphasis is on personal conversations with the client and the client’s needs are documented in client files. The respondent at ZGG asserts: “At the intake the needs

of a client are being addressed by asking ‘what do you as a client expect from us?’ ‘What are your needs and values?’, etcetera.”

Upon being discharged the client fills out a written evaluation form. The management then evaluates the forms as the respondent states: “These forms are sent to the head of the

department who checks if the forms contain matters that need to be taken care of immediately before sending it to the staff member responsible for quality improvement who, in turn, will write proposals for improvement based on these forms.”

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A4. Smooth flow

This study has assessed ‘smooth flow’ by measuring the time between the different rehabilitation processes. In this way abnormalities can be detected in the care path of the clients.

Surplus

The geriatric rehabilitation department of Surplus has certain criteria to ensure a smooth transition to the next level of care in the rehabilitation process. These criteria vary for each illness. The respondent gives the following example: “For people who have suffered a

cerebral haemorrhage in particular the following applies: if the application for a place in our institution is received before noon, then the client can come visit us the same day and will be admitted the next day.” The criteria are not being measured or reported at Surplus.

ZGG

At the geriatric rehabilitation department of ZGG a number criteria have been recorded within which certain processes need to be executed. In this regard, the respondent of ZGG states:

“On the day of the intake the physician visits and examines the client together with the nurse. Within two days a care treatment plan has been drawn up and an MDO takes place in the first week.” When these criteria cannot be realised then the client will not start his treatment, says

the ZGG respondent: “These are fixed terms. If they cannot be realised, then the client will

not come.” ZGG uses hard criteria to ensure a smooth flow of clients which can even lead to

rejecting clients.

4.3.2. (B) Value stream B1. Process mapping

This study has assessed the CSF ‘process mapping’ by comparing client groups with similar conditions and assessing the number of processes per client group. By mapping out processes it will be possible to identify the total rehabilitation process and whether these processes add value to the client’s rehabilitation or not.

Surplus

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within the organisation which procedures need to be followed, as the respondent states:

“There are protocols indicating how to deal with a certain group of clients but this is included in the working method. These are not written down precisely though.” The processes

are thus not mapped out at Surplus as a consequence of a client’s illness or due to particular circumstances.

ZGG

According to the respondent at ZGG only the main processes of a client’s path of care are mapped out. The rehabilitation of an individual client is set up according to the guidelines of hospitals and treatment officers. The respondent gives the following example: “It could

happen that the rehabilitation of an elective orthopaedics patient is different from another patient treated by a different surgeon.” These guidelines lead to processes being set up on

different aggregation levels: “The path of care, which is the main process, is the same for

every client. In addition to this main process there are sub-processes for each client group which are adjusted to fit the client.” Consequently, the path of care at ZGG is mapped out but

the rehabilitation processes of each client group and every individual client are not.

B2. Delay

The CSF ‘delay’ has been assessed by comparing the difference between the proposed time of a client’s trajectory and the actual time it took to complete the rehabilitation trajectory. By comparing the proposed and actual time of a trajectory, it will be possible to depict delays. Surplus

At Surplus the proposed time scale and the actual time it took a client to complete a rehabilitation programme are not compared. In the words of the respondent: “There are

criteria for measuring different steps of the process.” The time between a client’s application

and his admission is not registered: “The date of the intake is registered in the client file but it

is not reported how long it took before the client was admitted.” Although there are criteria to

register delays at the geriatric rehabilitation department of Surplus, the time it takes before a client can be admitted is not reported.

ZGG

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(hospitals and ZGG) have decided that a person will be admitted within two days after his application.” The time between a person’s application and his admission to the institution in

practice is not registered and delays are therefore not reported. To the question ‘On average, how much time goes by between a person’s application and his admission?’ the respondent answered: “I don’t know.” ZGG does not register the time between different steps of the process.

B3. Error prevention

‘Error prevention’ has been assessed by measuring the number of errors that occur. This way, health care institutions can see how often an error occurs and take measures accordingly. Surplus

Surplus categorises errors in the rehabilitation process as incidents: “Falling is considered an

accident. But medication incidents, such as taking the wrong medication or forgetting to take your medication, are also regarded as errors.” At Surplus, incidents are always registered in

their information system, the respondent says: “These (incidents) are registered in the MIC

(Clients’ Incidents Report).” It needs to be noted though that registering incidents has been

made mandatory by the authorities: “We are, however, obligated to do this by the

government.” The geriatric rehabilitation department at Surplus evaluates incidents as

stipulated in the guidelines. The respondent states: “We have an approach to evaluate

incidents in order to determine how it could have been prevented, what we have done wrong, and what we should do differently the next time such an incident occurs.” Surplus registers

the incidents occurring at the geriatric rehabilitation department. Although this registration has been made mandatory by the government, the organisation also evaluates the incidents. ZGG

At ZGG, errors are called abnormalities and they are registered in the client files. Additionally, ZGG actively tries to limit the abnormalities to a minimum. The respondent gives the following example: “The employee who saw the client fall, this person will be asked

how this could have been prevented.” Proposals for improvement are recorded in a separate

database and evaluated later on. According to the respondent, ZGG is actively seeking improvement: “We ask ourselves ‘How could we prevent this?’ and then proposals for

improvement are developed.” At ZGG’s geriatric rehabilitation department errors are

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addition, proposals for improvement are being developed by employees directly involved with the incidents.

B4. Process simplicity

This research has assessed the CSF ‘process simplicity’ by looking at the number of process evaluations. Regular process evaluations can help evaluate how well a certain process functions and may help to find ways to complete this process in a simpler manner.

Surplus

The respondent of Surplus argues: “It is not regularly evaluated whether or not certain

processes function well.” Surplus thus does not evaluate the functioning of processes on a

regular basis. However, Surplus does indicate that they are obligated by the health and safety inspection (Arbodienst voor Kwaliteit & Zorg) to evaluate the rehabilitation processes once every few years. Still, Surplus does not aim for a timely evaluation of the geriatric rehabilitation processes. The processes are only evaluated because of the obligation made by the health and safety authority Arbodienst voor Kwaliteit & Zorg.

ZGG

ZGG continuously evaluates processes with the help of proposals for improvement drawn up by employees. The respondent states: “We (ZGG) are looking to do things

(activities/processes) more effectively and more efficiently. This is a continuous process.”

Furthermore, it is important that the continuous evaluation of processes takes place in all layers of the organisation. In this respect, the respondent says: “It is essential to continuously

involve employees anew them about things they can improve, things that could improve the discipline, and things others could improve.” ZGG evaluates the functioning of its processes

continuously by encouraging employees to come up with improvements.

4.3.3. (C) Flow

C1. Multifunctional teams

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Surplus makes emphatic use of multifunctional teams. The composition of employees involved is done with precision and depends on the care the client needs: “The quantity of

disciplines in a team depends on the particular needs of every individual client.” Surplus uses

multifunctional teams to work as effectively and efficiently as possible. The respondent describes the goal of these teams as follows: “To ensure a smoother rehabilitation trajectory

for our clients and to prevent people from working together without coordination. We should all be working towards the same goal.” The geriatric rehabilitation department of Surplus

makes use of multifunctional teams which are composed according to the needs of the client. ZGG

The geriatric rehabilitation department of ZGG also opts for multifunctional teams: “All

geriatric rehabilitation occurs with the help of Multi-Disciplinary teams.” These teams are

composed according to the type of care and the particular needs of the client. The respondent states: ”Some client groups and some clients have a more extensive support team to

accompany them at treatments than other clients and client groups.” At ZGG, up to 12

different disciplines could be added to the same team. Every team is composed by a physician. The respondent gives the following example: “If a physician, for instance, does not

believe a diet is necessary, then the dietetics discipline will not be invited. In case nutritional problems occur, then this discipline will be added to the team.” ZGG works with

multifunctional teams which are completely dedicated to the type of care and the needs of a client. The needs of a client are determining the size of the teams.

C2. Transparency and timely collection of information

The CSF ‘transparency and timely collection of information’ has been assessed by looking at the number of visual displays and the frequency at which data is collected. By presenting performances on a daily basis, performances can be analysed and communicated to the employees which will give an insight in how well processes are going. This is an important reason why data needs to be collected in a timely manner.

Surplus

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client is registered and recorded in client files.” This takes place on a daily basis due to the

daily contact between clients and treatment officers. The respondent further states that care-taking personnel (physicians, therapists, nurses and caretakers) does not register information:

“Other information is not recorded.”

At the department level information regarding costs, turnover, and bed occupancy is recorded by administration: “The registration of management information does not concern other

disciplines or employees.”

Surplus does not visually present daily performances in a timely manner. In addition, employees are not involved in matters that are related to the performance of their department. ZGG

With regard to clients, ZGG registers bed occupancy at the geriatric rehabilitation department on a daily basis. The respondent says: “This provides us with an overview of the number of

beds that are currently occupied and on the basis of this information we can determine how much personnel is needed and calculate the costs and revenues.” Furthermore, ZGG

employees registers moments of contact with clients: “Moments of contact are considered

when calculating the costs. By calculating the costs per moment of contact we can look for ways to work more efficiently and more effectively.” At ZGG, management information such

as costs, turnover, bed occupancy is presented on a monthly basis due to the limited influence one has on these variables. The respondent states: “Presenting management information on a

daily basis is problematic since ZGG has full-time employees and it is more difficult to give these employees guidance to this extent.” Additionally, management information is recorded

by administration staff: “They can see how many beds are still available and in addition to

that management has a look at the number of people working on a department, the budget and the costs.”

ZGG does not present the performances of the geriatric rehabilitation department on a daily basis. The costs and revenues are presented every month due to the limited influence on these variables. In addition, employees are not involved in performances of their department.

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This study has assessed ‘accessibility’ by looking at the available and educated personnel. In order to make health care accessible to clients, sufficient educated personnel needs to be available to help clients in a timely manner.

Surplus

Surplus is rather flexible in dealing with clients’ needs for care. The respondent states:

“Physicians know the distribution of personnel over a department; employees are distributed based on the occupancy rate and the need for physicians at a particular department.” When

there is a need for emergency care, employees on standby are called out to work. The respondent says: “When there is an unforeseen need for care, the physician on standby will be

called out immediately to treat our clients.” Surplus tries to be flexible with clients’ needs

and plans the work schedule according to the occupancy rate. ZGG

According to the respondent, ZGG starts by clarifying to the client what can be expected from their institution. The respondent gives the following example: “If a client says he would like

to have physiotherapy 3 times a day 7 days a week, then we will tell the client this will not be possible.” Furthermore, ZGG tries to meet the needs and wishes of clients to the best of its

abilities though the respondent does that: “It happens sometimes that a client needs to wait

before he can be helped when all employees are occupied.” Clients’ needs are assessed based

on urgency level using triage. The respondent of ZGG states: “Matters of medical emergency

are treated by physicians right away. Clients with other needs for care are helped out by others disciplines or caretakers.”

The accessibility of ZGG regarding needs for care are discussed with clients in advance. Further, the urgency level of clients’ needs is decided by using triage while ZGG makes use of educated personnel. Moreover, the institution acknowledges that they are not always capable of meeting clients’ needs immediately.

D2. Interaction and participation