Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 1 Chapter 1. Introduction to Quantitative Decision-Making Methods in Health Care Management

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 2 OutlineOutline   Overview of Healthcare Management   Historical Background   Nature of Healthcare Services   Decision Making   Healthcare Manager & Responsibilities   Distinctive Characteristics of Healthcare Services   Overview of Healthcare Management   Historical Background   Nature of Healthcare Services   Decision Making   Healthcare Manager & Responsibilities   Distinctive Characteristics of Healthcare Services

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 3 Healthcare Management is... the management of processes or health systems that provide care to patients. the use of decision tools to manage and improve processes.

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 4   Healthcare Management Requires Decisions in: – –Forecasting – –Capacity planning – –Staffing & Scheduling – –Managing medical supplies – –Quality Control – –Motivating employees – –And more...

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 5   Scientific Management Techniques (1910s) – Frederic W. Taylor: work/labor - observe, measure, analyze, improve.   Standardization – Frank & Gillian Gilberth   Psychological Effects of Work Conditions – Henry Gannt   Quantitative Inventory Management (1915) – F.W. Harris   Quality Control & Sampling (1930s) – W. Shewhart   Operations Research/Management Science (1950s) Linear Programming (G. Dantzig), Queuing Models   Management Information Systems (1970s)   TQM/CQI (1980s)   Supply Chain Management, Reengineering (1990s) Historical Background and Development of Decision Techniques

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 6 Nature of the Healthcare Industry Combines medical technology and human touch, administers care around the clock from newborns to critically ill More than 518,000 establishments make the health services industry Two-thirds of all private health services establishments are offices of physicians or dentists Hospitals constitute two percent of all private health services, but they employ 40% of all health workers (with government hospitals 45%) Source: U.S. Department of Labor Bureau of Labor statistics (2004),

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 7 Table 1.2 Distribution of Health Providers and Health Workers in Health Services: in 2002, and Expected Growth Provider type Percent of Providers Percent of Employment Employment (in 000) Percent change, Hospitals, public and private , Nursing and residential care facilities , Offices of physicians , Offices of dentists Home healthcare services Offices of other health practitioners Outpatient care centers Other ambulatory healthcare services Medical and diagnostic laboratories , Source: U.S. Department of Labor (2004).

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 8 This is What Healthcare Industry Do! Transform the Poor Health to Good Health The difference between the cost of inputs and the value of outputs. Inputs Land Labor Capital Transformation/ Conversion process Outputs Services Control Feedback Value added The essence of healthcare operations is to add value. Sick patient Treated patient

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 9 Simply- Healthcare Process is: InputsProcessingOutputs Doctors, nursesExaminationHealthy patients HospitalSurgery Medical SuppliesMonitoring EquipmentMedication LaboratoriesTherapy

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 10 Decision Making is the Key! There are two groups of decisions:   System Design-- capacity, location, departmental arrangements, product and service planning, acquisition and placement of equipment   System Operations-- personnel, inventory, scheduling, product management, and quality measurement and assurance

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 11 Decision Making System Design – capacity – location – arrangement of departments – product and service planning – acquisition and placement of equipment

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 12 Decision Making System operation – personnel – inventory – scheduling – project management – quality assurance

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 13 Who is the Healthcare Manager? CEO? COO? CFO? CIO? CNO? CXO? Mid-Level Manager? Operational Level Manager?

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 14 Decisions fall into a hierarchy. Strategic Tactical Operational Broad Scope: Product Selection New Construction Location Decisions Technology Choices Moderate Scope: Staffing levels Supply Chain Equipment Selection Financial Resource Allocation Narrow Scope: Scheduling Controlling Quality Inventory Replenishment

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 15 Employment Potential for Healthcare Managers? Table 1.3. Health Services by Occupation in 2002, and Projected Growth. Health services occupationEmployment (in 000) Percent change, Management, business, and financial occupations General and operations managers Administrative services managers Medical and health services managers …………………. All health service occupations12, Source: U.S. Department of Labor (2004).

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 16 Patient is a participant in the process Production and Consumption occur simultaneously Perishable Capacity Site selection is dictated by patient location Labor intensiveness Intangible nature of healthcare outputs High level of judgment called upon and heterogeneous nature of healthcare Distinctive Characteristics of Healthcare Services

Chapter 1: Quantitatve Methods in Health Care Management Yasar A. Ozcan 17 The End