Thursday, August 20, 2009

Continuous Improvement, Lean Sigma, and Health Care Reform

It seems you can’t pick up a newspaper or turn on your television these days without hearing something about the current health care situation within the United States. Some claim the US has the best health care available in the world today. Others claim the current US health care system costs an excessive amount while providing inferior care. Some favor radical change, while others don’t want to change a thing. Rarely are any of these claims accompanied by facts, as viewed recently at various town hall meetings.

As a Lean Six Sigma champion and natural skeptic, I decided to let the numbers speak for themselves by conducting my own analysis using publicly available data. This article simply presents a factual review of the current state of US health care.

The source for the data is the World Health Organization (WHO). My analysis utilized the most recent data available from the WHO and was retrieved as of August 3, 2009. There are 193 countries contained in this report. To focus on “more bang for the health care buck”, I limited my analysis to the top 29 countries with the highest per capita total expenditure on health care at the average exchange rate (US$).

The countries in the top 29 in order based on total per capita health spend are (1) United States, (2) Luxembourg, (3) Monaco, (4) Norway, (5) Switzerland, (6) Iceland, (7) Denmark, (8) France, (9) Canada, (10) Ireland, (11) Sweden, (12) Austria, (13) Netherlands, (14) Germany, (15) San Marino, (16) Belgium, (17) United Kingdom, (18) Australia, (19) Finland, (20) Italy, (21) Andorra, (22) Qatar, (23) Greece, (24) Japan, (25) New Zealand, (26) Spain, (27) Portugal, (28) Israel, and (29) Slovenia. I focused on 25 variables over these 29 countries.

Executive Summary

After extensive review of 25 key performance measures in the 29 countries with the highest per capita health expenditure, it is clear that US residents pay a premium rate for a health care system that produces less than premium results. Residents in the US have the worlds most expensive per capita cost system. The total health expenditure in this country represents a staggering 15.3% of our Gross Domestic Product (GDP).

In spite of the huge expenditure, life expectancy in the US ranks 27th of the 29 countries in the study. Additionally, only 1 country in this study has a higher infant mortality rate! These are unquestionably dismal results.

Surprisingly, the US government ranks 3rd in the study for general government expenditure on health as percentage of total government expenditure. The current US government expenditure seems extremely high when compared to the countries with national systems. This would seem to imply that enough waste might exist in the current system that health care reform could be accomplished without raising taxes.

While there is no single issue that would resolve all of the issues with the US health care system, there is a void in the current system where those without insurance are going without the basic care available to those with insurance. This void is unquestionably resulting in loss of life as the US system ranks:

  • 2nd amongst countries in the study in infant mortality rate
  • 2nd amongst countries in the study in probability of dying by age 5
  • 1st amongst countries in the study in the probability of dying between ages 15 – 60

The current US health care system is fundamentally flawed and requires immediate and dramatic action to lower the current cost, reduce mortality rates and improve life expectancy. This will most likely mean providing access to health care insurance for the uninsured and under insured.

Lean Six Sigma is based on a foundation of continuous process improvement. However, before we can improve upon health care reform, we must first define/implement our initial efforts. We simply need to implement a plan and begin the PDCA (Plan, Do, Check, Act) cycle.Unfortunately, our government currently seems more interested in arguing over the Plan and never gets to the Do, Check, and Act.

Cost of Health Care


  1. The mean is the average of all 29 countries included in the study.
  2. The median is the middle value of all 29 countries included in the study.

Based on the WHO data retrieved August 3, 2009, the US has the highest total health care spend per capita in the world! Additionally, the US has the world highest total spend as a percent of the GDP of any country in the Top 29 list reviewed.

The US spends 15.3% of the GDP on health care. This expenditure is “out of statistical control” when compared to the Top 29 countries. Of particular note, is the fact the US government currently ranks 3rd of the Top 29 countries by spending 19.1% of it’s total spend on health care.

Simply put, the current health expense incurred by the US government is surprisingly high when compared to other countries that offer a more nationalized system. All of this data supports the fact that the US health care system is extremely expensive.

Quality of Health Care

Assuming that a key measure of success of a nation’s health care system would be a long life expectancy and low mortality rates, the US system’s performance can best be described as dismal when compared to the other countries in this analysis.

  • The mean life expectancy for the 29 countries studied is 80.28 years as compared to 78 years in the US.
  • Of the 29 countries in this analysis, 26 of the countries rank ahead of the US in Life Expectancy at birth for both sexes.
  • The US is tied with Slovenia with a life expectancy of 78 years and ahead of only Qatar (77 years).

Additionally, I reviewed the data from the Healthy life expectancy (HALE) at birth (years) both sexes.

  • The mean Healthy life expectancy for the 29 countries is 71.41 years while US residents can expect 69 years.
  • 25 of the 29 countries studied posted results higher than the US in this key measure.

In terms of mortality rates, US residents had the highest probability of dying between ages 15 and 60 of any of the 29 countries included in the study. Only 1 of the 29 countries (Qatar) studied had a higher infant and under 5 years old mortality rate.

Health Care Risk Factors

It is interesting to note that while the US has the highest percentage of obese adults of countries in the study, this fact had not dramatically impacted the mortality rate for cardiovascular disease in the country as the US ranks 10th in the study.


The current system of health care in the US is expensive and life expectancies are low as compared to the countries in this study. Assuming that US medical personnel, technology, and infrastructure is at a minimum equal to the countries with higher performing systems, we are left with the question why is the life expectancy in the US less than top performing nations? The answer is simply that health care services are not available to the uninsured and under insured in a timely manner.

As the result, in America, those without health insurance are more likely to not receive timely treatment and simply die sooner. Additionally, many of those without health insurance often seek initial medical advice later, which results in higher costs in treating conditions, which worsened due to lack of timely intervention. We simply cannot allow life expectancy in this country to be dictated by an individual’s social economic status. In a great country such as ours, access to health care must be a right and not a privilege. In order to improve the performance of our health care system, we must provide for affordable health care insurance without disqualifying individuals due to pre-existing conditions.

For whatever reason, the US government has failed to undertake dramatic reform measures prior to this date. Our government has been paralyzed as our elected officials argue over one plan or another. They are failing to recognize a very basic principle in Lean Six Sigma, continuous process improvement. Our representatives should select the best plan currently available and implement. This plan should be improved upon in the upcoming years. The time for action is now. Doing nothing is simply not an option.

According to information retrieved from the National Coalition on Health Care on August 11, 2009, ( ) approximately 46 million Americans (or 18% of the population below age 65) were without health care in 2007. This number issued by 2.2 million people between 2005 and 2006 and has grown by more than 8 million people since 2000. To reduce mortality rates and improve life expectancy in this country, steps must be taken to provide for access to health care for the uninsured and under insured.

Fact, many Americans today are a pink-slip away from losing their health insurance. Therefore, we can expect an increase in the number of uninsured and under insured, due in part, to the slow economy.

So, how do we get “more bang for our health care buck?” By implementing a meaningful reform package in conjunction with a continuous process improvement plan; this will ensure that the US health care system provides premier performance results for years to come.

Author’s note

In recent weeks, both sides of the health care debate have tossed around outlandish statements. In order to help separate the fact from the fiction, I would encourage reader’s to checkout the 2009 Pulitzer Prize winning site for a honest fact check on statements made in the health care debate.


  1. Great article thanks. It highlights the enormous opportunity - no absolute necessity - to reduce waste. It also highlights the need to implement holistic lean transformation programs that will be owned and supported at all levels to make it sustainable.
    The same applies to the other countries. In our case, New Zealand's Healthcare needs to get some traction as well.

  2. Great analysis. Great food for thought. A couple of pieces of information I would like to add... as an HR professional, I can tell you that a large number of those uninsured do so at their choice. While I do not know the statistics, a number of young workers who could pay for insurance simply opt not to. They see themselves as healthy, "invincible," and do not wish to spend the money. Second, many of the uninsured as quoted by our government (47 million) are illegal aliens. They often do have bona fide jobs here but often fail to sign up for insurance (or any other benefit like 401(k), etc.) so as to avoid being found out as illegal. Frankly, they should not receive coverage, in my opinion, as they are here illegally. May be a hard edged opinion, but one many Americans agree with. What Congress should address is the pre-existing condition rules. If these are eliminated, (and if Congress mandates that he highest premium per group cannot be larger than a fized percentage of the smallest)people who lose insurance (and COBRA runs out) can get immediate coverage with any current provider - and there are a number out there. Finally, Congress needs to look at liability, malpractice and the often excessive cost of litigation.