Strong America Now Founder Responds to CBO’s Douglas Elmendorf
DALLAS, Sept. 20, 2011 /PRNewswire-USNewswire/ — The following is being released by Strong America Now:
At a meeting of the Super Committee Tuesday, Congressional Budget Office Director Douglas Elmendorf cautioned that ferreting out waste, fraud and abuse would have a negligible impact on the panel’s work: “There is no evidence that suggests that this sort of effort can represent a large share of the $1.2 trillion or $1.5 trillion or the larger number that some of you have discussed as being the objective in savings for this committee.” No evidence? Mr. Elmendorf has no private sector experience and therefore should be forgiven for his statement, if he is willing to learn from Caterpillar, Xerox, ITT, Alcan, Avery-Denison, the Army, Navy, etc. These organizations have dramatically reduced spending by the elimination of waste using a method known as Lean Six Sigma. The Army essentially adopted the Caterpillar/Xerox deployment model and quickly removed billions of dollars of waste. According to Mike Kirby, former Deputy Undersecretary of the Army for Business Transformation:
“The Army found that more than 25 percent of the cost of every process is waste which can be eliminated by Lean Six Sigma. For every dollar invested in Lean Six Sigma the Army saved over $100 in waste.”
Applying the 25 percent reduction across the entire Federal government would reduce spending by more than $5 trillion over ten years starting in 2017 if full scale deployment of Lean Six Sigma begins by 2013. U.S. troops were being killed by IED’s due to the lack of Mine Resistant Ambush Protected (MRAP) vehicles which were only being produced at the rate of five per day. By applying Lean Six Sigma waste reduction, within five months, the Navy facility near Charleston, SC was producing more than 50 vehicles per day with the same workforce. The results prove that 90% of the labor cost of the MRAP was waste!
Had the Navy followed Mr. Elmendorf’s guidance that waste is negligible; the Navy would have solved the problem by hiring ten times as many workers. Mr. Elmendorf will discover a new dimension in spending reduction based on waste elimination if he will invest 12 minutes of his time watching a video produced by the Navy in regard to MRAP. We offer to provide a copy.
Finally, it is vital that we address entitlement spending on Medicare, Medicaid. Nurse Karen Rago, Executive Director of Service Line Administration at the University of California San Francisco Medical Center, applied waste reduction to Cardiac Artery Bypass Graft surgery at Stanford Hospital. Her team found that 40% of the cost was waste. When this waste was removed, the mortality rate fell by 48%! Applied across the entire hospital, waste reduction reduced spending by $120 million in two years. This level of waste is consistent with the report “Building a Better Delivery System” of the Institute of Medicine and the National Academy of Engineering which concluded that 30%-40% of health care spending is waste due to “..over-use, under-use, misuse, duplication, system failures, unnecessary repetition, poor communication, and inefficiency.” Medicare can be saved by eliminating even half this waste by 2017.
Strong America Now has no commercial interest in Lean Six Sigma, but offers to supply Mr. Elmendorf the overwhelming evidence that $500 billion per year of waste can be removed from Federal spending, at his convenience, and at no cost to the government.
SOURCE Strong America Now