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.
• Todays 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 womens,
  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
• SOP
• 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

• Healthcares self-perception peoples lives and
  health, were 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, womens 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_at_comcast.net
• 901 854 0198
• 901 277 6684