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.
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
Healthcare OverviewHealthcare Overview
Quality, Cost, Access
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: QualityU.S. Health Challenges: Quality
…but that does not change a harsh reality…
…care is far too unsafe…
…and quality is too inconsistent…
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: QualityU.S. Health Challenges: Quality
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).
SOCIETY FOR HEALTH SYSTEMS
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).
U.S. Health Challenges: QualityU.S. Health Challenges: Quality
SOCIETY FOR HEALTH SYSTEMS
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
U.S. Health Challenges: QualityU.S. Health Challenges: Quality
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: QualityU.S. Health Challenges: Quality
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…
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: QualityU.S. Health Challenges: Quality
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
SOCIETY FOR HEALTH SYSTEMS
How Would You Measure Success?How Would You Measure Success?
• Patient Safety
• Patient Centeredness
• Timeliness
• Efficiency
• Effectiveness
• Equity
Voice of the Customer!
SOCIETY FOR HEALTH SYSTEMS
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)
SOCIETY FOR HEALTH SYSTEMS
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?
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: CostU.S. Health Challenges: Cost
SOCIETY FOR HEALTH SYSTEMS
$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.
U.S. Health Challenges: CostU.S. Health Challenges: Cost
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: CostU.S. Health Challenges: Cost
Source: www.oecd.org/health/healthdata
SOCIETY FOR HEALTH SYSTEMS
National Health Expenditures as a Percentage of Gross Domestic Product, 1989 – 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.
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
U.S. Health Challenges: CostU.S. Health Challenges: Cost
SOCIETY FOR HEALTH SYSTEMS
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%
U.S. Health Challenges: CostU.S. Health Challenges: Cost
SOCIETY FOR HEALTH SYSTEMS
National Expenditures for Health Services and Supplies(1) by Category, 1980 and 2009(2)
Hospital Care, 42.67% Hospital Care, 32.58%
Physician Services, 20.25%
Physician Services, 21.71%
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
U.S. Health Challenges: CostU.S. Health Challenges: Cost
SOCIETY FOR HEALTH SYSTEMS
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
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.
$255.7B $2,486.3B$1,378.0B
U.S. Health Challenges: CostU.S. Health Challenges: Cost
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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,
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
Overview of HospitalsOverview of Hospitals
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
Community Hospitals By OwnershipCommunity Hospitals By Ownership
Source: Kaiser Family Foundation 2009, www.statehealthfacts.org
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals.
Number of Beds
Number of Beds per 1,000
Hospital Bed ChangesHospital Bed Changes
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
Hospital CostsHospital Costs
SOCIETY FOR HEALTH SYSTEMS
Hospital CostsHospital Costs
SOCIETY FOR HEALTH SYSTEMS
Hospital Labor CostsHospital Labor Costs
SOCIETY FOR HEALTH SYSTEMS
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
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals.
Patient Volume Is IncreasingPatient Volume Is Increasing
SOCIETY FOR HEALTH SYSTEMS
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
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals.
Patient Time In Hospital Is FlatPatient Time In Hospital Is Flat
SOCIETY FOR HEALTH SYSTEMS
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
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals.
ALOS Is Gradually DecreasingALOS Is Gradually Decreasing
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
Healthcare Is Highly RegulatedHealthcare Is Highly Regulated
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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)
SOCIETY FOR HEALTH SYSTEMS
Typical Hospital Organizational Typical Hospital Organizational StructureStructure
SOCIETY FOR HEALTH SYSTEMS
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)
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
IE’s in HealthcareIE’s in Healthcare
BACKGROUND
ORGANIZATIONAL STRUCTURE
KEY ROLES
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
IEs Needed!IEs Needed!
Systems Engineering/ Healthcare Partnership
National Academy of Engineering and Institute of Medicine, 2005
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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!!
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
“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
SOCIETY FOR HEALTH SYSTEMS
IE’s in HealthcareIE’s in Healthcare
EXAMPLES
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
Labor Productivity ManagementLabor Productivity Management
Source: Institute for Industrial Engineers
SOCIETY FOR HEALTH SYSTEMS
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
Source: Institute for Industrial Engineers
SOCIETY FOR HEALTH SYSTEMS
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
Source: Institute for Industrial Engineers
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
Public Health ExamplePublic Health Example
Response Planning for Avian Flu
No Intervention Interventions
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
Project Management / FacilitationProject Management / Facilitation
SOCIETY FOR HEALTH SYSTEMS
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)
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
Future of HealthcareFuture of Healthcare
SOCIETY FOR HEALTH SYSTEMS
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:
SOCIETY FOR HEALTH SYSTEMS
ResourcesResources
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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
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:
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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.
SOCIETY FOR HEALTH SYSTEMS
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
SOCIETY FOR HEALTH SYSTEMS
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.