Focused Factories

Focused Factories in Healthcare

In healthcare there have been few attempts to formally define the concept of focused factories, and no standard definition exists. Regina H. Herzlinger, a Harvard Business School professor and a leading advocate of consumer-directed healthcare, defines healthcare-focused factories as integrated, multidisciplinary teams of health professionals organized around the needs and treatments of particular chronic diseases or disabilities. For example, she envisions diabetes-focused factories having teams of health professionals entirely focused on treating and controlling that disease.

Such teams would include cardiologists, dermatologists, endocrinologists, nephrologists, podiatrists, behavioral support specialists, and others. Focused factories would deliver services wherever patients needed them—in their homes and in pharmacies, community centers, and shopping malls, as well as in community and specialty hospitals. Focused factories also would provide the patients with all the medical information they wanted. Herzlinger views focused factories as an important component of consumer-driven healthcare.

Other researchers have empirically defined healthcare-focused factories as specialty hospitals, primarily facilities that specialize in cardiac, [Page 409]orthopedic, or surgical care. A few researchers also include ambulatory surgery centers as healthcare-focused factories. Most specialty hospitals are physician-owned, for-profit facilities. Phy sicians often establish specialty hospitals because they want greater autonomy over treatment decisions and the care environment, a selected number of medical procedures having relatively high profit margins, and a larger share of the hospital's profit margin to increase their incomes. Physicians may directly own and manage the specialty hospitals and be their sole proprietor, or they may indirectly own and not manage the hospitals by purchasing equity stakes in them from corporations. Some corporations own a number of these facilities. Currently, there are more than 100 specialty hospitals in the nation, and the number appears to be growing. The number of ambulatory surgery centers is over 3,000.

Examples

The example of a healthcare-focused factory that is most often cited is Shouldice Hospital in Ontario, Canada. The hospital, an 89-bed, forprofit facility, is named after its founder, Edward Shouldice, who developed an innovative surgical technique for repairing hernias during World War II. Shouldice Hospital's entire focus is on the surgical repair of external abdominal wall hernias without complications. Surgeons at the hospital each perform 15 to 20 hernia repairs a week, as compared with other surgeons in Ontario, who perform on average only 1 per week. Because of Shouldice Hospital's narrow focus and high degree of specialization, it achieves excellent medical outcomes and a high degree of patient satisfaction. The hospital has very low complication and infection rates and one of the lowest hernia recurrence rates in the world. Its patients have short length of stays, and nearly all of them report being extremely satisfied with the care they received. Furthermore, the overall cost of care at Shouldice Hospital is significantly lower than at other Canadian hospitals.

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