Healthcare Operations Management

2008 Health Administration Press. All rights reserved.

1
Chapter 14
Holding the Gains

Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
3
Holding the Gains
Types of projects to select
Backlogs
Revenue less than expense
Poor outcomes
Engage support departments
Tools
HR planning
Managerial accounting
Feedback and control
Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
4

Project
identified

Decrease
staffing?

Plan for
maintaining staff


Pool or
redeploy


Eliminate vacant
position

FTEs
needed
in other
department?
Vacant
position?

Lay off

No
Yes
Yes
Yes
No
No
Human Resources Planning
Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
5
Holding the Gains
Managerial Accounting
Understand the source of revenue
Per member per month (PMPM)
Diagnosis-related group (DRG) (case mix adjusted)
Unit of servicerelative value unit (RVU)
Retail
Determine costs
Fixed
Variable
Overheadallocation methodology
Conduct cost-volume-profit analysis (CVP)

Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
6
Base PI Project Base PI Project
Test volume 1,000 1,500 1,000 1,050
Revenue/test 150 150 150 150
Total revenue 150,000 225,000 150,000 157,500
Costs
Variable cost/unit 38 38 38 38
Fixed costs 85,000 85,000 120,00 80,000
Overhead 20,000 20,000 20,000 20,000
Total cost 143,000 162,000 178,000 139,900
Profit 7,000 63,000 (28,000) 17,600
Backlogged Financial Loss
CVPExamples
Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
7
Holding the GainsControl

Birthing Center Patient Satisfaction
50
60
70
80
90
100
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B
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Facilities
Clinical Quality
High Touch


Run Chart for Birthing Center Patient Satisfaction
Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
8
Process Management Plan
Answer
request for
appointment
Log on to info
system
Current
New
Caller
status
Enroll caller
Make
appointment
Monitoring
Response plan
Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
9



Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
10
Levels of Operational Excellence
Level 1
There are no organized operations monitoring or
improvement efforts at this level.
Quality efforts are aimed at compliance and the
submission of data to regulatory agencies.
Level 2
Organization has begun to use operations data for
decision making.
There are pockets of process improvement activities
in which process mapping and PDCA or rapid
prototyping are used.
Evidence-based medicine (EBM) guidelines are used
in some clinical activities.
Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
11
Levels of Operational Excellence
Level 3
Senior management has identified operations improvement
efforts as a priority.
Organization conducts operations improvement experiments,
uses a disciplined project management methodology, and
maintains a comprehensive Balanced Scorecard.
Some P4P bonuses are received, and the organization obtains
above-average scores on publicly reported quality measures.
Level 4
Organization engages in multiple process improvement efforts,
using a combination of project management, Six Sigma, Lean,
and simulation tools.
A significant number of employees have been trained in the
advanced use of these tools, and these individuals lead
process improvement projects.
EBM guidelines are used comprehensively, and all P4P
bonuses are achieved.
Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
12
Levels of Operational Excellence
Level 5
Operational excellence is the primary strategic objective of the
organization.
Operations improvement efforts are underway in all
departments, led by departmental staff who have been trained
in advanced tools.
The organization uses real-time simulation to control patient
flow and operations.
The organization develops and publishes new EBM guidelines
and best practices for administrative operations.
The organization scores in the top 5 percent of any national
ranking of quality and operational excellence.
Healthcare Operations Management
2008 Health Administration Press. All rights reserved.
13
The Future
Ambulatory
care
model
EBM based
Emergency and
inpatient care
modelEBM
based
Predicted
resource needs:
Facilities
Staff
Supplies
Clinical operations
Real-time data
Real-time control
Supply chain
system
Demand
prediction
system:
Volumeclinical
conditions

Staff scheduling
system
End of Chapter 14