Introduction to Healthcare for Industrial Engineers

Introduction to Healthcare for Introduction to Healthcare for Industrial EngineersIndustrial Engineers

This presentation incorporates the work of many active IIE and This presentation incorporates the work of many active IIE and SHS members and to whom the society expresses its appreciation SHS members and to whom the society expresses its appreciation

for their efforts and continuing the growth in our field.for their efforts and continuing the growth in our field.

SOCIETY FOR HEALTH SYSTEMS

Note: this presentation is intended to be a generic set of introductory slides to the profession. Presenters should feel free to adjust the content and emphasis to suit their own experiences and audience.


Healthcare Overview− Quality− Cost

Overview of Hospitals

IE’s in Healthcare− Background− Organizational Structure− Key Roles− Examples

Future of Healthcare

Resources

Overview Of ContentOverview Of Content


Healthcare OverviewHealthcare Overview

Quality, Cost, Access


The U.S. Health Care IndustryThe U.S. Health Care Industry

Source: Institute for Industrial Engineers

• Insurance companies work with both employers and MCO’s to provide coverage;

• The government provides a form of insurance for qualifying patients through Medicare/Medicaid


U.S. Health Challenges: QualityU.S. Health Challenges: Quality

Most American hospitals provide safe and effective care for the vast majority of patients, the vast majority of the time

The vast majority of caregivers are well trained and conscientious

Western medicine’s ability to save and extend life, and to improve the quality of life for the ill and injured is nothing short of miraculous



…but that does not change a harsh reality…

…care is far too unsafe…

…and quality is too inconsistent…



Extensive literature review performed at RAND in 1998:

Only 50% of Americans receive recommended preventive care

Patients with acute illness:− 70% received recommended treatments− 30% received contraindicated treatments

Patients with chronic illness:− 60% received recommended treatments− 20% received contraindicated treatments

Schuster MA, McGlynn EA, Brook RH. How good is the quality of healthcare in the United States? Millbank Quarterly, 1998; 76(4):517-63 (Dec).


American health care

"gets it right”

54.9%of the time.

McGlynn EA, Asch SM, Adams J, et al. The quality of health care delivered to adults in the United States. N Engl J Med 2003; 348(26):2635-45 (June 26).



So why is this so hard?

Inadequate levels of safety and inconsistent quality result from clinical uncertainty which in turn results from:

− An increasingly complex healthcare environment

− Rapidly exploding medical knowledge

− Lack of valid clinical knowledge (poor evidence)

− Over reliance on subjective judgment




Rapidly Exploding Medical KnowledgeIn 2004, the U.S. National Library of Medicine

added

almost 11,000 new articles per week

to its on-line archives

That represented about 40% of all articles published, world-wide, in biomedical and clinical journals.

(1,500 – 3,500 completed references per day, 5 days a week)

To maintain current knowledge, a general internist would need to read:– 20 articles per day, 365 days of the year

This is an impossible task…



Medical errors and iatrogenic injury:• 98,000 deaths / year• 770,000 - 2 million patient injuries• $17 - $29 billion dollars

More US deaths/yr than for traffic accidents, breast cancer, & AIDS

Hospital-acquired infections:• 1.7 million NSI/year - $3,000/case• 8.7 million additional hospitals days/year• 98,987 deaths/year• $4.2 - $11 billion annually

Adverse drug reactions:• 770,000 to 2 million per year• $4.2 billion annually• 6-10% of hospital patients suffer 1 or more serious adverse events

Institute of Medicine 2000

Centers for Disease Control and Prevention


How Would You Measure Success?How Would You Measure Success?

• Patient Safety

• Patient Centeredness

• Timeliness

• Efficiency

• Effectiveness

• Equity

Voice of the Customer!


We’re We’re NNotot The Best: IE’s Needed! The Best: IE’s Needed!

Australia CanadaNew

ZealandUK US

Patient Safety 2.5 4 2.5 1 5

Patient-Centeredness

2 3 1 5 4

Timeliness 2 5 1 4 3

Efficiency 1 4 2 3 5

Effectiveness 4.5 2.5 2.5 1 4.5

Equity 2 4 3 1 5

Source: Davis, et al., The Commonwealth Fund, 2004

(1 = best, 5 = worst)


Healthcare System TodayHealthcare System Today

Descriptive Statistics

• Largest single industry in the world• Approximately 17% of the USA’s

GDP• Expenses increasing at 4 - 10%

annually• Major pressure to become more

efficient and provide higher quality care

• Shortage of skilled workers

Costs of Poor Quality

• Estimated 35% of all healthcare costs = waste

• Duplication, non-value add, redundancies

• Medical errors, adverse events, preventable deaths, process defects

Sound familiar?


U.S. Health Challenges: CostU.S. Health Challenges: Cost


$200

$700

$1,200

$1,700

$2,200

$2,700

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Bill

ions

Inf lation Adjusted (2)

Total National Health Expenditures, 1980 – 2009(1)

Source: Centers for Medicare & Medicaid Services, Office of the Actuary. Data released January 6, 2011.(1) CMS completed a benchmark revision in 2009, introducing changes in methods, definitions and source

data that are applied to the entire time series (back to 1960). For more information on this revision, see http://www.cms.gov/nationalhealthexpenddata/downloads/benchmark2009.pdf.

(2) Expressed in 1980 dollars; adjusted using the overall Consumer Price Index for Urban Consumers.




Source: www.oecd.org/health/healthdata


National Health Expenditures as a Percentage of Gross Domestic Product, 1989 – 2009(1)



11.8

%

12.5

%

13.2

%

13.5

%

13.8

%

13.7

%

13.9

%

13.8

%

13.7

%

13.7

%

13.8

%

13.8

%

14.5

%

15.4

%

15.9

%

16.0

%

16.0

%

16.1

%

16.2

%

16.6

%

17.6

%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Per

cent

age

of G

DP



Hospital Care, 30.5%

Prescription Drugs, 10.1%

Other, 33.6%

$2.49 Trillion

Nursing Home Care, 5.5%

Physician Services, 20.3%

Other Sectors, 82.4%

U.S. GDP 2009

National Health Expenditures as a Percentage of Gross Domestic Product and Breakdown of National Health

Expenditures, 2009

Source: Centers for Medicare & Medicaid Services, Office of the Actuary. Data released January 6, 2011.

Health Care Expenditures,

17.6%



National Expenditures for Health Services and Supplies(1) by Category, 1980 and 2009(2)

Hospital Care, 42.67% Hospital Care, 32.58%



Other Professional,(4) 7.1%

Other Professional,(4) 7.3%

Home Health Care, 1.01%Home Health Care, 2.93%

Prescription Drugs, 5.11%Prescription Drugs, 10.73%

Other Medical Durables and Non-durables, 5.88% Other Medical Durables and

Non-durables, 3.35%

Nursing Home Care, 6.48%Nursing Home Care, 5.88%

Other,(3) 11.4% Other,(3) 15.5%

1980 2009

Source: Centers for Medicare & Medicaid Services, Office of the Actuary. Data released January 6, 2011.(1) Excludes medical research and medical facilities construction.(2) CMS completed a benchmark revision in 2009, introducing changes in methods, definitions and source data that are applied to the

entire time series (back to 1960). For more information on this revision, see http://www.cms.gov/nationalhealthexpenddata/downloads/benchmark2009.pdf.

(3) “Other” includes net cost of insurance and administration, government public health activities, and other personal health care.(4) “Other professional” includes dental and other non-physician professional services.

$235.6B $2,330.1B



Distribution of National Health Expenditures by Source of Payment, 1980, 2000, and 2009(1)

Medicare, 14.6% Medicare, 16.3% Medicare, 20.2%

Total Medicaid, 10.2%

Total Medicaid, 14.8%Total Medicaid, 15.5%

Other Government, 17.5%Other Government, 14.5%

Other Government, 13.8%

Private Insurance, 27.0%

Private Insurance, 33.2% Private Insurance, 32.2%

Other Private, 7.9%

Other Private, 6.5% Other Private, 6.3%

Out-of-pocket, 22.8%Out-of-pocket, 14.7% Out-of-pocket, 12.0%

1980 2000 2009



$255.7B $2,486.3B$1,378.0B



Percent Growth in Medicare Spending per Beneficiary vs. Private Health Insurance Spending per Enrollee, 1989 –

2009(1,2)

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Source: Centers for Medicare & Medicaid Services, Office of the Actuary. Data released January 6, 2011.(1) CMS completed a benchmark revision in 2009, introducing changes in methods, definitions and source data

that are applied to the entire time series (back to 1960). For more information on this revision, see http://www.cms.gov/nationalhealthexpenddata/downloads/benchmark2009.pdf.

(2) Data reflects spending on benefits commonly covered by Medicare and Private Health Insurance.

Private Health Insurance

Medicare

U.S. Health Challenges: AccessU.S. Health Challenges: Access


Inefficiencies Drive Up CostInefficiencies Drive Up Cost

Unnecessary & Overuse of Medical Services− Practice variation among providers− Defensive Medicine – Risk of liability suits− $70 – 126 billion annually

End of Life Care− Seen to have significant overuse− ¼ cost of Medicare services is for patients in last year of life

Fragmentation of care− Repeated medical histories and duplicative diagnostic tests

Services that yield savings are not used effectively− Preventive care

− Care for chronic conditions, such as hypertension, high cholesterol, diabetes

Source : IIE & Ronald M. Davis, MD, Addressing the Rising Cost of Health Care, AMA eVoice, Feb 2008,


More Contributions To Rising CostsMore Contributions To Rising Costs

Intensity of Services− Longer life spans and increase in chronic disease

− Increased need for on-going treatment, long-term care

Inflation in high cost / high technology products− Pharmaceuticals

− Surgical supplies

Non-Clinical Spending- especially “transactional” costs

Duplicative services− Facilities & technology

− Staffing


What Are The Solutions To The What Are The Solutions To The Rising Costs Of Healthcare?Rising Costs Of Healthcare?

Reduce the burden of preventable disease

Health care delivery must be more efficient

Must reduce nonclinical health system costs (administration, overhead, etc.)

Promote value-based decision making− Understanding cost, benefit, clinical outcomes− Selecting drug therapies, insurers, legislators

Source: IIE & Ronald M. Davis, MD, Addressing the Rising Cost of Health Care, AMA eVoice, Feb 2008


What Does It All Mean For IE’sWhat Does It All Mean For IE’s

IE’s are in a unique position to greatly improve the healthcare system

Improving quality of care

Decreasing cost through increasing efficiency

This creates a high demand for Process Optimization and Project Management


Overview of HospitalsOverview of Hospitals


Types Of HospitalsTypes Of Hospitals

Community − Profit – Investor owned − Non-Profit – Supported by local funding

Teaching-Associated with a Medical College & provide clinical training to medical

students and other health professionals

Public -Owned and operated by federal, state or city governments

Tertiary – Could be any one of the above

-A major hospital that usually has a full complement of services including pediatrics, general medicine, various branches of surgery and psychiatry or

-A specialty hospital dedicated to specific subspecialty care (pediatric centers, oncology centers, psychiatric hospitals). Patients will often be referred from smaller hospitals to a tertiary hospital for major operations, consultations with subspecialists and when sophisticated intensive care facilities are required


Community Hospitals By OwnershipCommunity Hospitals By Ownership

Source: Kaiser Family Foundation 2009, www.statehealthfacts.org


Number of Community Hospitals,(1) 1989 – 2009

Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals.

(1) All nonfederal, short-term general, and specialty hospitals whose facilities and services are availableto the public.

(2) Data on the number of urban and rural hospitals in 2004 and beyond were collected using coding different from previous years to reflect new Centers for Medicare & Medicaid Services wage area designations.

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Hos

pita

ls

(2)

All Hospitals

Urban Hospitals

Rural Hospitals

Types Of HospitalsTypes Of Hospitals


Number of Beds and Number of Beds per 1,000 Persons, 1989 – 2009

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Bed

s pe

r T

hous

and

Bed

s


Number of Beds

Number of Beds per 1,000

Hospital Bed ChangesHospital Bed Changes


Number of Hospitals in Health Systems,(1) 2000 – 2009

2,400

2,500

2,600

2,700

2,800

2,900

3,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Hos

pita

ls

Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals. (1) Hospitals that are part of a corporate body that may own and/or manage health provider facilities or

health-related subsidiaries as well as non-health-related facilities including freestanding and/or subsidiary corporations.

Hospitals & Health SystemsHospitals & Health Systems


Hospital CostsHospital Costs


Hospital CostsHospital Costs


Hospital Labor CostsHospital Labor Costs


Inpatient Admissions in Community Hospitals, 1989–2009

27

28

29

30

31

32

33

34

35

36

37

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Mill

ions


Patient Volume Is IncreasingPatient Volume Is Increasing


Total Inpatient Days in Community Hospitals, 1989 – 2009

100

140

180

220

260

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Mill

ions


Patient Time In Hospital Is FlatPatient Time In Hospital Is Flat


Average Length of Stay (ALOS) in Community Hospitals, 1989 – 2009

7.2

7.2

7.2

7.1

7.0

6.7

6.5

6.2

6.1

6.0

5.9

5.8

5.7

5.7

5.7

5.6

5.6

5.6

5.5

5.5

5.4

0

1

2

3

4

5

6

7

8

9

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Day

s


ALOS Is Gradually DecreasingALOS Is Gradually Decreasing


Emergency Department (ED) Visits and Emergency Departments(1) in Community Hospitals, 1991 – 2009

3,500

3,700

3,900

4,100

4,300

4,500

4,700

4,900

5,100

5,300

80

85

90

95

100

105

110

115

120

125

130

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Em

erge

ncy

Dep

artm

ents

Num

ber

of E

D V

isits

(M

illio

ns)

ED Visits Emergency Departments

Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals. (1) Defined as hospitals reporting ED visits in the AHA Annual Survey.

ED TrendsED Trends


Hospital Emergency Department Visits per 1,000 Persons, 1991 – 2009

250

270

290

310

330

350

370

390

410

430

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Vis

its p

er T

hous

and

Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals. US Census Bureau: National and State Population Estimates, July 1, 2009. Link: http://www.census.gov/popest/states/tables/NST-EST2009-01.xls.

ED TrendsED Trends


Percent of Hospitals Reporting Emergency Dept. Capacity Issues by Type of Hospital, March 2010

21%

22%

19%

20%

23%

17%

14%

32%

11%

27%

38%

36%

51%

31%

50%

0% 10% 20% 30% 40% 50% 60%

All Hospitals

Non-teaching Hospitals

Teaching Hospitals

Rural Hospitals

Urban Hospitals

ED is "At" Capacity ED is "Over" Capacity

Source: American Hospital Association 2010 Rapid Response Survey: Telling the Hospital Story.

ED TrendsED Trends

SOCIETY FOR HEALTH SYSTEMSSource: IIE & Vital and Health Statistics, National Hospital Discharge Survey, 1995; 2000 AHA Statistics; 2005 AHA Statistics

Total Hospital Days and Outpatient Visits, 1970-2003

150,000200,000250,000300,000350,000400,000450,000500,000550,000600,000

1970

1975

1980

1985

1990

1997

1998

2000

2002

2003

Hospital Outpatient

Tot

al N

umbe

r of

Hos

pita

l Day

s(i

n 00

0s)

Total N

umber of O

utpatient Visits

(in 000s)Inpatient Use Has Plummeted While Outpatient

Use Has Soared

Inpatient & Outpatient TrendsInpatient & Outpatient Trends


Healthcare Is Highly RegulatedHealthcare Is Highly Regulated


The Changing FocusThe Changing Focus

Old New

Coordination Fragmented Continuity

Strategy “Every institution for itself” Strategic Alliances

Ambulatory Care

Feeder for Hospital Core Business with Independent Sites

Physician

Relationships

Loose Affiliation Hospital/Physician Integration


Typical Hospital Organizational Typical Hospital Organizational StructureStructure

Two Governance Structures− Board of Directors & CEO / Management− Medical Staff

Key Leadership Roles include− CEO – Chief Executive Officer− COO – Chief Operations Officer− CNO – Chief Nursing Officer− CFO – Chief Financial Officer− CIO – Chief Information Officer− CMO - Chief Medical Officer (VP of Medical Affairs)


Typical Hospital Organizational Typical Hospital Organizational StructureStructure


Multi-Hospital System StructureMulti-Hospital System Structure

Organizational Structures− Traditional Functional

− Matrix Organizations

System vs Facility Structure− System functions vary by organization

− IE’s may be at system level or facility level (or both)


Integrated Health Care SystemsIntegrated Health Care Systems

“ a network of organizations that provides, or arranges to provide a coordinated continuum of services to a defined population and is willing to be held fiscally and clinically accountable for the health status of the population served.”

Stephen Shortell, et al., 1993


Integrated Healthcare Delivery Integrated Healthcare Delivery NetworkNetwork

Aligns health care facilities to deliver integrated healthcare services by improving quality and reducing costs to a defined geographic area

Hospital and physician components and at least one other component of care are required for a system to be considered highly integrated

In 2007, there were an estimated 450 health care systems that were vertically integrated

Ownership or formal agreements

Source: IIE & KnowledgeSource , Integrated Healthcare Networks Market Overview , 2008


Integrated Healthcare Delivery Integrated Healthcare Delivery NetworkNetwork

Source: IIE & http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=459233From parallel practice to integrative health care: a conceptual framework


IE’s in HealthcareIE’s in Healthcare

BACKGROUND

ORGANIZATIONAL STRUCTURE

KEY ROLES


Healthcare Systems EngineeringHealthcare Systems Engineering

IE/OR in Healthcare Rich and diverse history

As old as the field of industrial engineering itself

Gilbreth’s 1911 surgical studies

Application Areas

Hospital operations– Patient and information flow– Appointment access– Scheduling– Facility layout and location

Public health– Vaccination optimization– Outbreak surveillance– Emergency response

Public policy– Disease screening– Regional planning– Organ sharing


History Of Healthcare IE/ORHistory Of Healthcare IE/OR

1911-18Time studies of surgery and delays

(F. Gilbreth)

1920-40 Basic process and capacity analysis

1945‘Management engineering’ invented and applied to nursing (L. Gilbreth)

1957 Deming advocates use of SPC in healthcare

1959First queuing and scheduling studies (Smalley, others)

1965Clinical information systems

(Kennedy et al)

1960sFlagle’s Nursing Acuity Studies at Johns Hopkins

1965Hospital inventory optimization

(Reed, Stanley)

1965-66First simulation queuing studies of patient waits (Nuffield Report, Fetter, Thompson)

1972Nurse scheduling (branch and bound) algorithms (Warner, Wolfe)

1970-72Perishable inventory theory applied to blood banks (Pierskalla)

1972-73 Simulation planning models (Rising)

1974 Regional planning OR models (Wolfe)

1967-82 Diagnostic-related groups (DRG’s)

1979 Forecasting bed needs (Griffith)

1980 Cancer screening optimization (Eddy)

1980’s MDM utility theory (Weinstein)

1988 Total quality management (Berwick)

1990’s Patient safety movement (Leape)

2000’s Lean & Six Sigma


IEs Needed!IEs Needed!

Systems Engineering/ Healthcare Partnership

National Academy of Engineering and Institute of Medicine, 2005


WhereWhere Do IE’s Work In Healthcare? Do IE’s Work In Healthcare?

Organizations

Hospitals

HMO’s

Physician offices

Long-term care facilities

Outpatient clinics

Public health (CDC, etc)

Insurance organizations

Government agencies

Healthcare Consulting Firms

Healthcare Information Systems Companies

Departments

System engineering

Management engineering

Quality management

Process improvement

Performance improvement

Clinical safety

Information systems

Facilities management

Others


IE’s In Healthcare: Job TitlesIE’s In Healthcare: Job Titles

Management Engineer

Decision Support Analyst

Performance Improvement Consultant

Financial Analyst

Productivity Manager

Project Manager

Just to name a few….

There is no clear path: IE’s work in many areas, There is no clear path: IE’s work in many areas, report to many departments and have various titlesreport to many departments and have various titles


Management Engineering Management Engineering Department: ExampleDepartment: Example

Chief Operating Officer

Director of Management

Systems

ManagementEngineer

ManagementEngineer

(Decision Support)

DataAnalyst

• Process Improvement• Productivity Management• Position Control• Labor Standards Development

• Cost Accounting• Benchmarking• Labor Standards Development

FinanceQualityImprovement

• Productivity Monitoring• Benchmarking• Marketing Data Analysis

• Clinical Pathway Development• Quality Improvement Training

• Financial Decision Support


Integrate people, equipment, facilities and other resources to improve work results

Use skills learned in IE (process redesign, flowcharting, layout optimization, Lean, forecasting methodologies, simulation, etc.)

Performs cost-saving & quality improvement projects− Finance / Decision Support− All Patient Care Areas (Nursing, ER, Imaging, Surgery, Laboratory, etc.)− Support Services (Laundry, Food Service, Housekeeping, etc.)− Materials Management− Scheduling / Registration / Discharge− Administration− Medical Records− Quality and Patient Safety

WhatWhat Do IE’s Do In Healthcare? Do IE’s Do In Healthcare?

Maximize Quality and Safety, Minimize CostMaximize Quality and Safety, Minimize Cost


WhatWhat Do IE’s Do In Healthcare? Do IE’s Do In Healthcare?

Practitioners Data analysis

Benchmarking

Cost analysis and reduction

Economic analysis

Feasibility studies

Process/quality improvement

Simulation flow analysis

Queuing analysis

Space planning and layout

Appointment scheduling optimization

Researchers

Statistical quality control

Disease screening optimization

Scheduling algorithms

Regional capacity planning

Organ transplant optimization

Statistical surveillance

Cognitive and human factors research

Public policy


WhatWhat Do IE’s Do IE’s NOTNOT Do In Healthcare? Do In Healthcare?

Practice medicine

Make medical decisions

Infringe on clinical prerogatives

Pretend to know medicine/clinical content


Typical IE Projects In HealthcareTypical IE Projects In Healthcare

Productivity Management

Staffing and Scheduling

Process Improvement

Inventory Management

Simulation

Benchmarking

Facility Design and Capacity Analysis

Operations and System Analysis

Quality Improvement

All require excellent All require excellent change management change management

skills!!skills!!


The Importance Of The Importance Of Change ManagementChange Management

What is Change Management?

– Structured process and set of tools for managing the people side of change so that business results are achieved, on time, and within budget

– Organizational change management

– Individual change management

What is a Change Agent?

– Individual/group responsible for actually making the change happen - diagnose, plan, execute

Why is it important to develop these skills?

– All change must be planned in order to be sustained

– The “human side” of change is often forgotten

– You will add value to the project if you are skilled at managing change


IE’s In Healthcare:IE’s In Healthcare:The Importance Of Interpersonal SkillsThe Importance Of Interpersonal Skills

Negotiating with Decision Makers

Selling data and building accountability

Facilitation in difficult situations

Balancing quality of Patient Care and Efficiency

Communicating priorities / opportunities to leadership through data

The most successful IE will have a strong communication skills and will have ability to work with all levels within the healthcare setting


“You can design and create and build the most wonderful place in the world, but it takes people to make the dream a reality.”

Walt Disney


IE’s in HealthcareIE’s in Healthcare

EXAMPLES


Key Operational & Strategic Key Operational & Strategic Challenges For Hospitals Challenges For Hospitals

Inpatient throughput and Length-of-Stay

Surgical Services - productivity, scheduling, throughput

Inpatient Nursing - productivity & staffing

Emergency Services - throughput & productivity

Business Office - revenue cycle management

Patient access, registration & scheduling

Supply chain management

Service line management - growth & cost improvement

Key ancillary service improvement - Medical Imaging, Laboratory, Cardiac

Physician services - owned practices


Labor Productivity ManagementLabor Productivity Management



Productivity Management: Budgeting & Productivity Management: Budgeting & Forecasting - Roles For The IEForecasting - Roles For The IE

Establish Units-of-Service

Develop forecasting models

Project staffing requirements & costsProject supply expenses

Incorporate into position control; Other performance indicators

Monitor productivityReview position requests relativeto budget vs actual performance



Decision Support: Surgery Decision Support: Surgery Balanced ScorecardBalanced Scorecard

Reduce OR TimeInsurance AuthorizationEfficient Preference cardsPre-test resultsStaffing MixTimely Recovery

Team / Supply ReadinessPatient H&P / Tests readyAccurate Preference CardsPatient / Site VerificationCorrect Procedure / DrugsTimely Intervention

Reduce Time / DelaysRecords / Tests ReadySupply / Equipment ReadyReduced Case DelaysReduce Procedure DelaysDischarge Delays

Convenience & AccessInformation AccessNo Supply / Equipment DelaysPatient Wait TimesEffective Staff / SuppliesReduced Wait time

Physician OfficePre-AdmissionCase / Supply PreparationPre-surgeryProcedurePACU

Patient Care

ManagementEfficient OR Allocations High OR UtilizationEfficient SchedulingHigh Value Proc SpaceContracting / UsageComm / Docmt TimeManage Profitability

Accurate Case InfoSmooth Urgent / Add-ons Patient InformationReduced DelaysClinical StandardsReal-time Mgmt InfoReal-time Patient Info

Accurate Case TimesReduced DelaysLimit Delay / ChangeNo Space DelaysJust-in-Time InventoryImprove CoordinationTimely Info Access

Start Times & Follow onPhysician Wait TimesReduced overtimeSmooth Flow & AccessRight Supplies, Place & Time High Info AvailabilityEase of Info Access

SchedulingCase ManagementStaffing FacilitiesLogisticsCommunicationInformation Systems

IncreaseProfit perProcedure

Right Patient,Procedure,& Care

Reduce TotalOR Time

Financial Quality Service Satisfaction

ImproveConvenience& Access



Simulation And Risk AnalysisSimulation And Risk Analysis

Risk analysis is a useful tool to capture the uncertainty and to account for multiple factors affecting infection transmission.

Components affecting the risk of infection transmission includes physiological risk, intervention risk and cognitive risk. Combine these components into a composite score for the current system.

Utilizing known process and infection control rates, we can create a simulation and generate the risk score.

Assessing alternate solutions

− Identify and assess the factors that may reduce the risk of infection transmission

− Change medical practices


Public Health ExamplePublic Health Example

Response Planning for Avian Flu

No Intervention Interventions


Process Analysis ExampleProcess Analysis Example

New Member Application, Termination, or Re-Enrollment

Data Entry Process

Print Out New Entries at End of Each Day

100% Inspection of Previous Day's Input

Data Entry Error Found?

Highlight Error for Correction

Yes

Process Remaining p/w, Activate Member's Record

Monthly Volume

Mo

nth

ly F

ract

ion

of

Err

ors

Temps hired dueto high volume

(r = 0.23)

Month

Fra

ctio

n o

f In

pu

t E

rro

rs

Oct

-91

Dec

-91

Feb-

92

Apr

-92

Jun-

92

Aug

-92

Oct

-92

Dec

-92

Feb-

93

Apr

-93

Jun-

93

Aug

-93

Oct

-93

Dec

-93

Feb-

94

Apr

-94

Jun-

94

Aug

-94

Oct

-94

Dec

-94

Billing Error Process Basic Data Analysis

Correlation to Paperwork Volume?

Error Reduction Over Time


0

5

10

15

20

25

30

35

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

Month

VA

P r

ate

pe

r 1

00

0 v

en

tila

tor

da

ys

UCL

UWL

LWL

LCL

Quality Control ExamplesQuality Control Examples

Fall Rate

0

0.5

1

1.5

2

2.5

3

3.5

11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9

Fiscal Period

Fal

ls/1

000

pat

ien

t d

ays

Subgroup Number

Mor

taliti

es /

1000

Disc

harg

es

2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40

Surgical Site Infections

Subgroup (Month) Number

Avera

ge T

ime (

Min

s)

An

tib

ioti

c is

Ad

min

iste

red

Befo

re 1

st

Incis

ion

-200

-100

0

100

200

300

4/93

5/93

6/93

7/93

8/93

9/93

10/93

11/93

12/93

1/94

2/94

3/94

4/94

5/94

6/94

7/94

8/94

9/94

10/94

11/94

12/94

1/95

2/95

3/95

4/95

5/95

6/95

7/95

8/95

9/95

UCL

CL

LCL

Trial X-bar Control ChartPerioperative Antibiotic Timing

X-bar ChartVentilator-Associated Pneumonia (VAP)

Falls and Slips


Project Management / FacilitationProject Management / Facilitation


IE Beyond HospitalsIE Beyond Hospitals

Simulation of smallpox or bird flu spread (CDC)

Emergency services planning

Medical decision making

Risk-benefit analysis of alternate treatments

Statistical surveillance of infectious diseases

Regional capacity planning models

Drug labeling and error prevention (human factors)


Possible Career PathsPossible Career Paths

Hospitals and Health Systems− Management engineering (IE) department− Quality, process improvement department

Non-hospitals− HMO’s, medical practices, senior care, others− Government, regulatory agencies, other

Industry− Biomedical− Pharmaceutical

Graduate school− IE/OR with healthcare emphasis − Healthcare degrees (MPH, MHA, etc)

It starts with your It starts with your initial project initial project

opportunities and opportunities and choiceschoices


Future of HealthcareFuture of Healthcare


Changing health of the community

The exchange of information − Patient information

− Hospital performance

− Physician performance

Payment reform - pay for performance/outcomes as opposed to pay for service

Healthcare reform and regulations

FutureFuture

The future will be led by the needs and wants of the patient – trends include:


ResourcesResources


Society For Health Systems (SHS)Society For Health Systems (SHS)

The leading professional organization for analysis and improvement of healthcare processes.

Largest and most active society within IIE Education Resources National initiatives Partnerships with other organizations Job bank, co-op jobs, and student mentoring Recommended reading list Part of the Institute of Industrial Engineers (IIE) Industrial engineers and process improvement professionals Excellent annual conference

www.shsweb.org


Further Information / Next StepsFurther Information / Next Steps

Society for Health Systems, SHS (www.shsweb.org)- Co-op jobs, Internships, Job bank- Student webpage, Mentoring- Annual conference- Paper competitions, Senior projects

Local hospitalsOther organizations

- Institute for Healthcare Improvement , IHI (www.IHI.org) - HIMSS (www.himss.org)- ASQ Healthcare (www.asq.org)- INFORMS (www.trinity.edu/aholder/HealthApp)

“Insert your contact info here”


Society for Health Systems

Healthcare Management Engineers

Healthcare Professionals Improving Healthcare

Hospital Patient Flow

Lean & Toyota Production System Healthcare Professionals

Institute for Healthcare Improvement

HME List serve ([email protected])

LinkedIn GroupsLinkedIn Groups

LinkedIn has developed a strong professional network and can be leveraged to expand your knowledge and network; suggested groups include:


Professional SocietiesProfessional Societies

Institute of Industrial Engineers, Society for Health Systems

Healthcare Management and Information Systems Society

- ME/PI Community

Healthcare Financial Management Association

American Society for Quality, Healthcare Division

Others

WHY??? Networking with peers

Professional growth and mentoring

Do not recreate the wheel

Membership and Membership and networking is vital networking is vital

part of your part of your professional growth professional growth

and successand success


Some ReferencesSome References

Sahney VK. Evolution of hospital industrial engineering: from scientific management to total quality management. Journal of the Society of Health Systems, 1992; 3(4):3-17.

Smalley HE. Industrial engineering in hospitals. Journal of Industrial Engineering, 1959; 10:171-175.

Flagle CD, Young JP. Applications of operations research and industrial engineering to problems of hospitals. Journal of Industrial Engineering, 1966; 17:609-614.

Fries BE. Bibliography of operations research in health-care systems. Operations Research, 1976; 24:801-814.

Larson, J. Management Engineering, Healthcare Information and Management Systems Society, 2001.


Hospital DefinitionsHospital Definitions

Inpatients - The # of patients who stayed for 1 or more nights in the hospital.

Outpatients - Ambulatory patients who receive service but do not stay overnight in the hospital.

Admissions - The # of inpatients who are admitted to the hospital.

Discharges - The # of inpatients that are released from the hospital.

Average Daily Census (ADC) - The average number of inpatients in the hospital for a defined time period.

Length-of-stay - The # of days an inpatient stays in the hospital.

Patient Days - The # of days total patients stay in the hospital for a defined period.

Average Length-of-Stay (ALOS) - Total # of patient days / Total discharges for period


Definitions - Payer CategoriesDefinitions - Payer Categories

Medicare - Health insurance for people age 65 or older people under age 65 with certain disabilities, and people of all ages with End-Stage Renal Disease. Providers are paid on a fixed basis for inpatient services and discounted fee-for-service for most ambulatory services.

Medicaid - Health insurance for low-income individuals and families who fit into an eligibility group that is recognized by federal and state law. Providers are paid on a fixed cost per case or discounted fee-for-service for most services.

Commercial Insurance− HMO - Health Maintenance Organization – Providers are paid on a fixed

“capitated” or “per-member-per-month” .

− PPO - Preferred Provider Organization- Providers are paid on a negotiated percentage of fees or fixed cost per case basis.

− Indemnity - Providers are paid on a fee-for-service basis.

− Self-Pay - Patient pays all out-of-pocket expenses.

Introduction to Healthcare for Industrial Engineers

Documents

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