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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

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HEALTHCARE OPERATIONS MANAGEMENT

Bob Castleman

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


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HEALTHCARE OPERATIONS MANAGEMENT

  • HEALTHCARE OVERVIEW

  • HEALTHCARE ISSUES

  • OPERATIONS MANAGEMENT IN HOSPITALS

  • LINKING WITH HOSPITALS


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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.


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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


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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


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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.


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ISSUES IN HEALTHCARE

  • SHRINKING REVENUE

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


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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


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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


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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


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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”


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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


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ISSUES - Operations

  • IMPROVE OPERATIONAL EFFICIENCY

    • Flows: caregiver, support, lab, physician, housekeeping, visitors

    • Processes - routings

    • Scheduling – resource utilization

    • Wait Times – ED, at resources


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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


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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)


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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, …)


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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)


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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


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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


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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


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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


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HEALTHCARE OPERATIONS MANAGEMENT

  • Bob Castleman

  • CPIM, CIRM, CSCP, C.P.M., CMfgT

  • rcastleman@comcast.net

  • 901 854 0198

  • 901 277 6684


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