Chapter 8 Health Care Processes

Learning Objectives Have a perspective on the unique operations and supply management (OSM) challenges faced in health care. Understand how selected OSM concepts and approaches can be applied to hospitals. Understand important health care terminology as it relates to OSM decisions.

The Nature of Health Care Operations Health care operations management: the design, management, and improvement of the system that deliver health care services Health care as a service Extensive customer contact Wide variety of providers Life or death as outcomes Key focus is on hospitals Hospital: a facility whose staff provides services relating to observation, diagnosis, and treatment of patients LO 1

Factors that Set Hospital Operations Apart from Others Key operators are highly trained professionals Generate requests for service Deliver the service Relationship between prices and performance is not direct No single line of command Balance of power between groups Product specifications are often subjective and vague Not a commodity that can be stocked Resource-oriented service organization LO 1

Classification of Hospitals General hospital/emergency room Specialty Psychiatric Rehabilitation (American Hospital Association classification) LO 1

Hospital Product-Process Framework LO 1

Hospital Layout and Care Chains The layout sets the physical constraints on operations The goal of layout is to move patients and resources to minimize wait and transport time A general rule is to separate patient and guest traffic from staff traffic Principal element is the nursing station Flow of work through a hospital is called a care chain LO 2

Characteristics of Processes/Care Chain in a Typical General Surgery Unit LO 2

Care Chain Diagram of Hip Replacement Surgery LO 2

Scheduling Efficiency A major distinction among health care processes is the extent to which resources can be scheduled efficiently Emergency situation must be dealt with immediately Inherently inefficient Elective procedures can be scheduled to achieve efficient use of resources LO 2

Steps Resource use and schedule complexity are effected by: The number of steps The time of each step Whether the care chain has a definite end Complexity is also increased by: The need for rapid diagnostics Extensive consultation The need to work with other specialties Decoupling points: steps in the process where waiting takes place LO 2

Tracking of Work Flow Using RFID Radio frequency identification: uses electronic tags that can store, send, and receive data over wireless frequencies Used to track the location of: Patients Medical staff Physical assets LO 3

Benefits of RFID Patient flow Physical assets Improvement of patient check-in process Tighter links between patient and medical records Physical assets Pinpoint location of equipment Save time rounding up equipment LO 2

Capacity Planning Capacity planning: matching an organization’s resources to demand Resource requirements is a function of: Number of patients Length of stay Capacity is measured in terms of multiple resources including Beds Clinics Treatment rooms Doctors Nurses And more LO 2

Developing a Capacity Plan Starting point is determining the effective capacity of a resource Effective capacity = Design capacity X Utilization Subsequent steps: Forecasting patient demand Translating this demand into capacity requirements Determining the current capacity level Calculating the gap between demand and capacity Developing a strategy to close the gap LO 2

Workforce Scheduling Nurse shift scheduling Operating room scheduling Largest component of hospital workforce Schedules can be classified as either: Cyclical schedule The work is planned for four-to-six weeks Nurses work a fixed schedule Flexible schedule Several types are used Most common is 8-hour days and an average of 40 hours per week Operating room scheduling Typically largest revenue-generating center LO 2

Quality Management and Process Improvement TQM approaches have been used for decades Hospitals are well suited because so much of health care involves precise measurements Six Sigma and Lean concepts are being instituted in many hospitals LO 2

Gap Errors and Bottlenecks Gap errors: information mistakes that arise when a task is transferred between people Handoffs are a significant source of serious patient harm One successful approach to managing handoffs is a checklist technique for communicating information Bottleneck: part of the system that has the smallest capacity Frequently result from departments optimizing their own throughput LO 3

Service Quality Hospitals have been raising their level of customer service Improved customer service saves money Fewer malpractice suits Reduction in no-shows Lower nurse turnover LO 2

Health Care Supply Chain LO 2

Physician-Driven Service Chains Computerized physician order entry (CPOE) systems are widely used for prescriptions Experts propose broadening their application to include scheduling all resources needed to treat patients The admission order triggers a series of follow-up events that are automatically entered into the system LO 2

Inventory Management Average inventory for a medium size hospital is $3.5 million Represents 5-15 percent of current assets 2-4 percent of total assets Largest working capital requirement Hospital inventory systems can be broken down into two categories Push systems Fixed-order quantity systems Fixed-time-period systems Pull systems LO 2

Safety Stock A major distinction between health care inventory management and other businesses is safety stock The standard calculation of safety stock is based on trading off the cost of carrying additional inventory with the cost of being out of stock This is much trickier in a hospital when the cost of a stockout might be death For critical items, backup contingency plans such as borrowing from a nearby hospital are often developed LO 2

Mayo Clinic Performance Management and Measurement System LO 3

Trends in Health Care Evidence-based medicine (EBM) Integrated medical care Electronic medical records Health information exchanges (HIE) Computer-assisted diagnostics Remote diagnostics Robots LO 3