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HEALTHCARE OPERATIONS MANAGEMENT. Bob Castleman CPIM, CIRM, CSCP, C.P.M. HEALTHCARE OPERATIONS MANAGEMENT. HEALTHCARE OVERVIEW HEALTHCARE ISSUES OPERATIONS MANAGEMENT IN HOSPITALS LINKING WITH HOSPITALS. HOSPITAL OPERATIONS MANAGEMENT.

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healthcare operations management

HEALTHCARE OPERATIONS MANAGEMENT

Bob Castleman

CPIM, CIRM, CSCP, C.P.M.

healthcare operations management2
HEALTHCARE OPERATIONS MANAGEMENT
  • HEALTHCARE OVERVIEW
  • HEALTHCARE ISSUES
  • OPERATIONS MANAGEMENT IN HOSPITALS
  • LINKING WITH HOSPITALS
hospital operations management
HOSPITAL OPERATIONS MANAGEMENT
  • Healthcare is the most changing and the most regulated industry today.
  • You must know operations management.
  • Quality is critical throughout the process.
healthcare overview
HEALTHCARE - OVERVIEW
  • Pre-1940s, healthcare was provided in the home. Hospitals were a “place to die”.
  • Hospitals then became centralized in city centers and the population came to the hospital.
  • Today’s healthcare is:
    • moving with the population
    • creating clinics: hospital / freestanding, surgical / non-surgical, usually specialized and dispersed
    • Seeing primary hospitals sought for critical care, major surgery and “no pay” patients
overview us hospitals 2005
OVERVIEW - US HOSPITALS (2005)
  • 5000 Hospitals (5900 in 1981)
  • 850,000 Beds (1million in 1981)
  • 4,500,000 Employees
    • 26% are nurses
  • $500 Billion Revenue
overview key resources
OVERVIEW – Key Resources
  • New FACILITIES are getting smaller, specialized, and dispersed.
  • There is a growing shortage of SKILLED EMPLOYEES.
  • TECHNOLOGY is advancing rapidly – CT, MRI, Robotics, EMR (electronic medical records).
  • INFORMATION SYSTEMS infrastructure is a growing focus.
issues in healthcare
ISSUES IN HEALTHCARE
  • SHRINKING REVENUE

Reimbursement has shifted from Retrospective (cost plus) to Prospective (set fee for a diagnosis – DRG)

issues in healthcare8
ISSUES IN HEALTHCARE

REVENUE

  • P4P: Pay for Performance – incentive for better outcomes
  • EBM: Evidence Based Medicine – scientific validation of procedures
  • Bundling: payments (hospital and physician share)
  • Gain sharing: hospital and physician share savings
  • “Never Events”: will not be reimbursed for “avoidable errors
issues resources
ISSUES - Resources
  • There is a shortage of DOCTORS
    • Many Americans do not have a primary physician – especially in rural areas and compounded by loss of insurance
    • A shortage of 50K physicians by 2010
    • A shortage of 200K physicians by 2020
issues resources10
ISSUES - Resources
  • There is a shortage of NURSES
    • In 2005, 115K were needed
    • 2004 - 2014, an additional 1.2 million nurses will be needed
    • By 2020, the shortage may be one million
    • More nurses are leaving the profession than are entering
    • Nursing schools are turning away qualified applicants due to a lack of instructors
issues other
ISSUES - Other
  • COSTS OF ADVANCING TECHNOLOGY – expensive technology is now the expectation of the patient, physician, employee, …
  • GOVERNMENT & OVERSIGHT REPORTING – “8 indicators which must be reported for each patient”
issues operations
ISSUES - Operations
  • MANAGING DECENTRALIZED FACILITIES – women’s, urology, spinal, bariatric, minor medical, etc.
  • RESOURCE TRACKING AND MANAGEMENT
    • Capital equipment location and utilization
    • Consumable inventory location and amount
issues operations13
ISSUES - Operations
  • IMPROVE OPERATIONAL EFFICIENCY
    • Flows: caregiver, support, lab, physician, housekeeping, visitors
    • Processes - routings
    • Scheduling – resource utilization
    • Wait Times – ED, at resources
operations management in hospitals
OPERATIONS MANAGEMENT IN HOSPITALS
  • Growing focus on Hospital Management
  • Terms being taught are “APICS friendly”
    • Materials management
    • Supply chain management
    • CPFR
    • S&OP
    • Process / value stream mapping
    • “De-bottlenecking”
    • LEAN / JIT / 6 sigma / DMAIC
operations management in hospitals15
OPERATIONS MANAGEMENT IN HOSPITALS
  • Local Examples (from interviews)
    • Managing limited resources – surgeons/ORs
    • Managing inventories in a distributed structure – clinics
    • Employee education of cost / revenue and process improvement – consumable charges
    • Resource utilization – scheduling clinic surgery suites
    • Reduced product variety for price leveraging – stents
    • Process flow and improvement - reduce wait times in the ED (emergency department)
linking with hospitals
LINKING WITH HOSPITALS
  • Healthcare’s self-perception: people’s lives and health, “we’re different”
  • Trends, issues and drivers
  • Roles and environment – administration, physician, nurse, support
  • Terminology, operations and processes
  • Make contact with a friend (of a friend, of a friend, …)
linking with hospitals17
LINKING WITH HOSPITALS
  • TERMS
    • Exchange cart: inventory stocked on a cart for a specific work center for a defined period of time. A replacement cart is delivered and replaces the cart in place (orthopedic floor exchanged twice weekly).
    • Par: inventory location and targeted product mix / quantities for a fixed location
    • Case management / manager: a diagnosis (hip replacement, heart catherization, child birth) has process steps to follow, monitored by a manager – a routing with timelines (for selected patients)
linking terms
LINKING - Terms
  • Service line – a grouping of closely related product lines (orthopedic, women’s services, …)
  • Diagnostic Related Group (DRG) – standardized reimbursement charges reimbursed for a medical condition and related “codes”
  • Charge Description Master (CDM) – price list for material or service charged to the patient
linkng terms
LINKNG - Terms
  • Prospective payment – reimbursement amount for treatment or illness classifications regardless of costs incurred
  • Evidence Based Medicine – scientific validation of proven result
  • JCAHO (Joint Commission on Accreditation of Hospital Operations) a key auditing group on hospital processes, operations and documentation. Can dictate corrective action and de-certifying hospital for lack of correction
operations management in healthcare
OPERATIONS MANAGEMENT IN HEALTHCARE
  • American Hospital Association (AHA)
    • aha.org
  • Association of Healthcare Resources and Materials Management (AHRMM)
    • ahrmm.org
  • Health Industry Group Purchasing Association (HIGPA)
    • higpa.org
  • Institute of Supply Management (ISM)
    • ism.org
  • A plethora of local and regional organizations
operations management in healthcare21
OPERATIONS MANAGEMENT IN HEALTHCARE
  • References:
    • American Hospital Association web-site
    • Hospitals & Health Networks, American Hospital Association
    • Interviews by Bob Castleman (various)
    • Langebeer, James R. II,, Health Care Operations Management, Sudbury, MA., Jones and Bartlett Publishing
    • Materials Management In Health Care, American Hospital Association
    • MX: Business Strategies for Medical Technology Executives, Canon Communications, LLC
healthcare operations management22
HEALTHCARE OPERATIONS MANAGEMENT
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