1. Systems Theory

2. Objectives Students will be able to: Students will be able to: Describe systems theory and its components. Describe systems theory and its components. Construct a general systems model using inputs, throughputs and a feedback loop. Construct a general systems model using inputs, throughputs and a feedback loop. Construct a health care delivery system model. Construct a health care delivery system model. Predict where and how factors such as cost, managed care, technology, and aging population, access to care, alternative therapies, and lifestyle behavior may affect various health delivery system models. Predict where and how factors such as cost, managed care, technology, and aging population, access to care, alternative therapies, and lifestyle behavior may affect various health delivery system models. Predict outcomes as interconnected components of modified health care delivery systems using the same client procedures. Predict outcomes as interconnected components of modified health care delivery systems using the same client procedures. Design a system analysis process that evaluates the following outcomes: client satisfaction, productivity, cost effectiveness, and efficiency. Design a system analysis process that evaluates the following outcomes: client satisfaction, productivity, cost effectiveness, and efficiency. Analyze the cause and effect on health care system change based on the influence of technology epidemiology, bio-ethics, socioeconomic and various forms of complimentary medicine. Analyze the cause and effect on health care system change based on the influence of technology epidemiology, bio-ethics, socioeconomic and various forms of complimentary medicine.

3. System Definition A system is an orderly and complex arrangement of parts. A system is an orderly and complex arrangement of parts.

4. There are many types of systems: Physiological Systems: The digestive system, neurological system, and circulatory system Physiological Systems: The digestive system, neurological system, and circulatory system Economic Systems: Capitalism and Socialism Economic Systems: Capitalism and Socialism Computer Systems: Network, mainframe, and PC computer systems Computer Systems: Network, mainframe, and PC computer systems

5. Systems Theory A way of studying a system as one unit, instead of individual parts. A way of studying a system as one unit, instead of individual parts. By examining a system as a whole, it is easier to understand how each part contributes to the overall mission By examining a system as a whole, it is easier to understand how each part contributes to the overall mission

6. Systems, in general, have the following elements: Input: Resources entering the system Input: Resources entering the system Throughput: Work done on those resources used to produce a product Throughput: Work done on those resources used to produce a product Output: The final product Output: The final product Feedback: Information taken from the output to control or correct errors in throughput Feedback: Information taken from the output to control or correct errors in throughput

7. System Components

8. Example of Payroll System Input: Information entered on the number of hours worked and the pay rates of each employee. Input: Information entered on the number of hours worked and the pay rates of each employee. Throughput: The work done by the computer to calculate the amount of pay, and the payroll taxes. Throughput: The work done by the computer to calculate the amount of pay, and the payroll taxes.

9. Example of Payroll System Output: The paychecks and payroll reports. Output: The paychecks and payroll reports. Feedback: Check figures provided to show that the calculations were correct (number of employee paychecks processed, total payroll paid, etc.) Feedback: Check figures provided to show that the calculations were correct (number of employee paychecks processed, total payroll paid, etc.)

10. Systems Thinking One approach to problem solving is systems thinking, or systems analysis.One approach to problem solving is systems thinking, or systems analysis. It expands analysis to include the system as a whole, and the relationship of interconnected parts.It expands analysis to include the system as a whole, and the relationship of interconnected parts. It recognizes that the whole is greater than the sum of the parts.It recognizes that the whole is greater than the sum of the parts.

11. Backwards Thinking Systems thinking involves backwards thinking. Systems thinking involves backwards thinking. It begins with the end objective, and works backward, analyzing the relationship of each component to the final objective. It begins with the end objective, and works backward, analyzing the relationship of each component to the final objective.

12. Example of Backward Thinking If the objective of a team is to produce a low cost but high quality medical product, then backwards thinking would start with the final end product, then evaluate each input and throughput to see if: It was necessary to the manufacture of the product It was necessary to the manufacture of the product It increased quality It increased quality It reduced cost It reduced cost

13. Advantages of Systems Thinking  Is a global approach to problem solving  Helps employees “see the forest for the trees.”  Enables team members to understand the big picture.

14. Advantages of Systems Thinking  Focus: Systems thinking allows problem solvers to identify cause and effect relationships. It focuses on the activities necessary for change. Cause Effect

15. Advantages of Systems Thinking  Teambuilding: Systems thinking helps team members identify the objective of the team, and understand how their individual activities contribute to that objective.

16. The American Healthcare Delivery System The American healthcare delivery system is one of the largest and most complex systems in the world. The American healthcare delivery system is one of the largest and most complex systems in the world. We model it by adapting the generic system shown earlier. We model it by adapting the generic system shown earlier.

17. The American Healthcare Delivery System

18. Let’s discuss each of the elements:

20. Inputs Human and financial resources Human and financial resources Patients Patients

21. Human and Financial Resources Human resources are the professionals who diagnose and treat patients, as well as the personnel who provide support services. Human resources are the professionals who diagnose and treat patients, as well as the personnel who provide support services. Human resources consist of the doctors, nurses, respiratory therapists, certified nurse assistants, administrators, dieticians, housekeepers, and accountants that work within the healthcare delivery system. Human resources consist of the doctors, nurses, respiratory therapists, certified nurse assistants, administrators, dieticians, housekeepers, and accountants that work within the healthcare delivery system.

22. Patients Patients are the individuals who enter the system for preventive, diagnostic, or treatment healthcare services. Patients are the individuals who enter the system for preventive, diagnostic, or treatment healthcare services.

23. Entry Point An efficient healthcare delivery system must have a well defined entry point.

24. Entry Point How does a 55 year old male with vertigo know where to enter the system? How does a 55 year old male with vertigo know where to enter the system? An ambulance? An ambulance? A general practice doctor? A general practice doctor? A neurologist? A neurologist? The emergency center? The emergency center?

25. A well-defined entry point provides: Triage (screening to determine priority of treatment) Triage (screening to determine priority of treatment) Timely entry into the system Timely entry into the system Access to cost effective resources Access to cost effective resources

27. Throughput Throughput is the step where the patient is treated Throughput is the step where the patient is treated

28. Resources Used in Throughput Educational resources Educational resources Treatment resources Treatment resources Financing mechanism Financing mechanism Management and control Management and control Information and feedback systems Information and feedback systems

29. Educational Resources Medical schools Medical schools Nursing schools Nursing schools Public health education Public health education Preventive healthcare education Preventive healthcare education

30. Treatment Resources Doctors Doctors Nurses Nurses Hospitals Hospitals Outpatient clinics Outpatient clinics Well baby clinics Well baby clinics Etc. Etc.

31. What kind of services are provided in “throughput”? Preventive - healthcare services designed to keep the student well Preventive - healthcare services designed to keep the student well Diagnostic - healthcare services to find out what is wrong with the patient Diagnostic - healthcare services to find out what is wrong with the patient Treatment - healthcare services to cure the patient Treatment - healthcare services to cure the patient

32. Financing Mechanism Someone has to pay the bill! Someone has to pay the bill! Who pays? Who pays? The patients themselves (self-pay) The patients themselves (self-pay) Employers Employers Private insurance companies Private insurance companies Medicare Medicare Medicaid Medicaid The health insurance industry itself The health insurance industry itself

33. Self-pay Some patients pay for their own healthcare. These are the self- employed, uninsured employed, and the unemployed. Some patients pay for their own healthcare. These are the self- employed, uninsured employed, and the unemployed.

34. Employers Many companies provide employee health insurance. The benefits vary widely. Most firms require that the employee pay a portion of the premium. Many companies provide employee health insurance. The benefits vary widely. Most firms require that the employee pay a portion of the premium. Almost all firms require cost sharing through co-payments at the time of service. Almost all firms require cost sharing through co-payments at the time of service. As healthcare costs continue to increase, it appears that the employee will pay a larger and larger percentage of total health insurance premiums. As healthcare costs continue to increase, it appears that the employee will pay a larger and larger percentage of total health insurance premiums.

35. Private Insurance Some people purchase individual or family policies from health insurance carriers. Some people purchase individual or family policies from health insurance carriers. These are usually more costly than the group insurance contracts purchased by employers. These are usually more costly than the group insurance contracts purchased by employers. In addition, coverage is often limited, and some individuals are unable to qualify for coverage. In addition, coverage is often limited, and some individuals are unable to qualify for coverage.

36. Medicare Medicare is a federally funded program that pays for some healthcare products and services for those sixty- five years of age and older. Medicare is a federally funded program that pays for some healthcare products and services for those sixty- five years of age and older.

37. Medicaid Medicaid is a state-funded program that pays for some healthcare products and services of the poor. Medicaid is a state-funded program that pays for some healthcare products and services of the poor. Benefits, and enrollment criteria vary dramatically from state to state. Benefits, and enrollment criteria vary dramatically from state to state.

38. The Healthcare Industry  Many healthcare providers, most specifically hospitals, are expected to provide charity care in return for non-profit exemption from income and property taxes.  Most hospitals also have large amounts of bad debt.  Many hospital emergency centers, for example, collect less than 50% of billings.  Ultimately, the consumer pays these costs.

39. National Health Insurance? In future years, it is possible that the government will replace the many mechanisms currently used to pay for healthcare by some kind of universal financing mechanism. In future years, it is possible that the government will replace the many mechanisms currently used to pay for healthcare by some kind of universal financing mechanism. What form this mechanism will take remains to be seen. What form this mechanism will take remains to be seen.

40. Management and Control Mechanisms The American healthcare system has many management and control mechanisms. The American healthcare system has many management and control mechanisms. These include private and public planning and regulatory agencies, licensure bodies, and legislative mandates. These include private and public planning and regulatory agencies, licensure bodies, and legislative mandates.

41. Information Systems Control is ineffective without feedback. Control is ineffective without feedback. Information systems include the financial and cost accounting systems used by hospitals and other healthcare organizations. Information systems include the financial and cost accounting systems used by hospitals and other healthcare organizations.

43. Output is the product of the system. How do you think we should define the product offered by the healthcare delivery system? How do you think we should define the product offered by the healthcare delivery system?

44. Possible Outputs A patient? A patient? A hospital admission? A hospital admission? A patient day? A patient day? An individual service like an appendectomy? An individual service like an appendectomy? A healthy community? A healthy community? Some other definition? Some other definition?

45. The healthcare delivery system is like a mobile Movement or pressure on one component exerts pressure on others. Movement or pressure on one component exerts pressure on others.

46. Example Successful pressure to reduce costs (one barrier to entry) will affect the volume of patients entering the system (input) and the number seen by the system (throughput). Successful pressure to reduce costs (one barrier to entry) will affect the volume of patients entering the system (input) and the number seen by the system (throughput).

47. Example Greater volumes of patients entering the system (input) and being seen by the system (throughput) could cause the finance mechanism (another component of throughput) to flounder or fail. Greater volumes of patients entering the system (input) and being seen by the system (throughput) could cause the finance mechanism (another component of throughput) to flounder or fail.

48. Example More resources spent for prevention will decrease resources needed for diagnosis and treatment, both components of throughput. More resources spent for prevention will decrease resources needed for diagnosis and treatment, both components of throughput.

49. Summary The healthcare industry is a complex system with many interrelated components. It is impossible to change one component of the system without influencing others. Some people have attempted to fix the American healthcare delivery system by focusing on one or more “broken components.” By failing to consider the “big picture,” they have often been met with unintended consequences. Those wishing to address problems of quality, cost, and accessibility must take a systems approach.

50. Discussion Question 1 Define the word “system” and give several examples of systems. Define the word “system” and give several examples of systems.

51. Definition A system is an orderly and complex arrangement of parts. A system is an orderly and complex arrangement of parts.

52. Examples of systems: Physiological Systems: The digestive system, neurological system, and circulatory system Physiological Systems: The digestive system, neurological system, and circulatory system Economic Systems: Capitalism and Socialism Economic Systems: Capitalism and Socialism Computer Systems: Network, mainframe, and PC computer systems Computer Systems: Network, mainframe, and PC computer systems

53. Discussion Question 2 What are the four components of a system? What are the four components of a system?

54. System Components

55. Discussion Question 3 Explain what “backwards thinking” is as it relates to systems: Explain what “backwards thinking” is as it relates to systems:

56. Backwards Thinking Systems thinking involves backwards thinking. Systems thinking involves backwards thinking. It begins with the end objective, and works backward, analyzing the relationship of each component to the final objective. It begins with the end objective, and works backward, analyzing the relationship of each component to the final objective.

57. Discussion Question 4 The healthcare delivery system is like a mobile. Pressure or movement exerted on one component exerts pressure others. The healthcare delivery system is like a mobile. Pressure or movement exerted on one component exerts pressure others. Give an example: Give an example:

58. Example Successful pressure to reduce costs (one barrier to entry) will affect the volume of patients entering the system (input) and the number seen by the system (throughput). Successful pressure to reduce costs (one barrier to entry) will affect the volume of patients entering the system (input) and the number seen by the system (throughput).

59. Example More resources spent for prevention will decrease resources needed for diagnosis and treatment, both components of throughput. More resources spent for prevention will decrease resources needed for diagnosis and treatment, both components of throughput.

60. Example

61. Changes in Today’s Health Care Systems Advances in technology Advances in technology Epidemiology Epidemiology Bio-ethics Bio-ethics Socioeconomics Socioeconomics Complementary (nontraditional) medicine Complementary (nontraditional) medicine

62. The End!