AC

Each of the nation's 5,700 hospitals must cut $2.6 million a year on average in costs in the next 10 years to meet the demands of President Obama's proposed health care reform, a daunting task when half of those hospitals lose money. Criticism came from almost every corner leading up to Obama's speech before Congress on Wednesday night, yet many hospital CEOs aren't complaining, at least not publicly. They say that the hospitals they run are rife with inefficiency and that they are optimistic that the $155 billion in savings is do-able with the help of business disciplines, such as the Toyota Production System, lean manufacturing and Six Sigma. "Efficiency has not been the hallmark of health care delivery operations," says Alan Aviles, CEO of New York City Health and Hospitals Corp. (HHC), one of the largest hospital and health care systems in the country, with $5.4 billion in revenue. Those disciplines have been wringing costs from manufacturing for decades, and the cost-cutting...