Manufacturing Cost-Effective Operations

manufacturing cost

Picture source:


Until Industrial Engineer magazine caught up with him, Dr. Keith Smith had never heard of the term “lean manufacturing.” But his team has been implementing its principles since 1997, when The Surgery Center opened in Oklahoma City. The constant focus on treating the surgeon like customer has led to prices that are one-sixth to one-tenth the cost of surgeries at large, nonprofit hospitals, he said. And the doctors do more surgeries in a month than hospitals that sport five time the operating rooms.

“Every single intervention was geared with the idea that the surgeon needs to be in the operating room, not anywhere else but in the operating room,” Smith said.

Everybody, except for a few clerks, is involved in patient care. And having everything on one floor avoids the dilemma of getting patients ready on one floor and sending them via elevator to the operating room, a process that Smith called “grossly, grossly inefficient.”

Smith usually keeps two anesthesiologist and two full operating room crews available for each surgeon. As the surgeon finishes one operation, the crews prepare the next patient for surgery. Downtime between cases, which can reach 45 minutes to an hour for even a simple procedure, has been eliminated.

Surgeons travel in a circle, from patient to the patient’s family to the next patient. Once they catch on to the system, the surgeons move fast. Operations start when they should. If the center is not on time or ahead of schedule, it usually is because the surgeon was delayed at an inefficient facility.

“In our facility, it’s not uncommon for an ear, nose and throat surgeon who’s pretty fast to do 10 to 12 cases before 10 or 11 o’clock in the morning,” he said. Smith also credits a lack of administration for the center’s low costs and efficiency.

“There aren’t a whole bunch of vice presidents and nurses that wear suits that are not talking care of patients issuing edicts and red tape,” Smith said. My head nurse doesn’t just sit in her office. She does cases.”

Since The Surgery Center doesn’t accept Medicare and Medicaid, Smith’s team can pay people based on performance. Charity cases come off The Surgery Center’s bottom line, not from taxpayers.

He said to replicate The Surgery Center, it can be done from scratch by someone with an entrepreneurial spirit who provides surgeons what they want without compromising safety and quality.

It would be much tougher in a big, bureaucratic hospital, he said. Someone – perhaps three or four someone in a large organization – would have to be given the reins to hire and fire the operating staff and even decide which surgeons get to work there. “Frankly, in an operating room, it needs to be an anesthesiologist, and the staff needs to feel accountable to that individual,” he said.