Health Care Processes

1. Have a perspective on the unique operations and supply management (OSM) challenges faced in health care. 2. Understand how selected OSM concepts and approaches can be applied to hospitals. 3. Understand important health care terminology as it relates to OSM decisions.

 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

 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

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

 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

 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

 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

 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

 Patient flow ◦ 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: matching an organization’s resources to demand  Resource requirements is a function of: 1.Number of patients 2.Length of stay  Capacity is measured in terms of multiple resources including ◦ Beds ◦ Clinics ◦ Treatment rooms ◦ Doctors ◦ Nurses ◦ And more LO 2

 Starting point is determining the effective capacity of a resource Effective capacity = Design capacity X Utilization  Subsequent steps: 1.Forecasting patient demand 2.Translating this demand into capacity requirements 3.Determining the current capacity level 4.Calculating the gap between demand and capacity 5.Developing a strategy to close the gap LO 2

 Nurse shift 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

 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 may hospitals LO 2

 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

 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

 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

 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 1.Push systems 1.Fixed-order quantity systems 2.Fixed-time-period systems 2.Pull systems LO 2

 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

LO 3

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