Excellence in China
A case study at PLAGH
1. Introduction
The People's Liberation Army General Hospital Aligning department mission and goals with
(PLAGH) is ranked as one of the top 3 public operating units and physician-administrator
hospitals in China3. With more than 4,000 beds, performance
it is also one of the largest and most reputable Performance management is a critical foundation
multi-specialty academic medical centres with as hospitals examine ways to achieve more
excellent clinical service, academic research with less. It is defined as a system of different
and education. Recognizing the challenges processes that combine to create an effective
it faced to sustain a market leading position, workforce to execute business goals. An effective
the PLAGH cardiology department engaged performance management system should build on
Deloitte Consulting China to conduct an the organization's unique culture and capability,
operations assessment and identify performance and be consistent with the organization’s strategy
improvement opportunities. A multi-disciplinary (Figure 2). It enables managers to evaluate
team of consultants with clinical and operational and measure operating units and individuals’
expertise fully assessed the cardiovascular performance by aligning day-to-day actions
service line in seven domains compared to with strategic business goals, and providing
industry leading practices (See Figure 1). Twenty accountability and visibility for performance
improvement opportunities were identified and expectations.
prioritized based on complexity, risk, and impact,
and then structured into work streams for Figure 2: Performance Management
implementation. A few examples are highlighted Structure
here.
Performance management is developed based
on organization strategy, which includes:
Figure 1: Assessment result of PLAGH
• Organization mission, vision, and goals
Cardiology department using the Industry Organization
• Organization structure
Strategy
Maturity Model™
Performance management is the system
that translates strategy into daily operation.
Effective performance management includes:
Leadership and
Performance Management • Comprehensive categories of clinical
management
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operation, medical technology management,
medical outcome, financial outcome, patient
4 satisfaction, and leadership
Techonology
application Resource • Specific and measurable metrics
3
allocation
Culture Operational Capability
2 Operational capability is the
1 foundation to implementing a
performance management system.
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Operational capability includes:
Patient Process Culture influences performance management via • Training and knowledge
experience management management
building close relationships among employees and
• Disciplined daily management
includes:
process
• Employee engagement
• Sophisticated IT system to support
• Leadership structure data management
Safety and quality Clinical treatment • Incentives and rewards • Effective communication within
internal departments and between
internal departments and external
Scale: 1 = Lagging Practice; 5 = Leading Practice
departments
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Figure 3: Excellent Patient Experience Framework
Understanding of patient
Leadership management
experience
To enhance PLAGH’s patient experience, Deloitte order to determine patient experience trends and
Consulting gathered leading practices from manage issues in a timely manner, all issues were
international case studies and helped PLAGH required to be documented and scored against
set up its complaint management system by a standardized severity ranking. Issues at each
applying principles from the Excellent Patient severity rank required different triage processes
Experience framework. The first step was to and different response timeframes. These were
establish a patient experience office and a just some initial steps undertaken to provide
dedicated governance council. This new structure specific structure and expectations around the
also included clear roles and responsibilities for importance of actively listening to patients, and
front line staff and administration to respond and being responsive and communicative about their
escalate issues within specified timeframes. In concerns.
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3. Strategies for operations
excellence implementation
The PLAGH case is not unique amongst hospitals. Strategy #3 – Implementing a refined
Chinese hospitals can all benefit from successful performance management system
implementation of operational excellence efforts. A well-rounded improvement solution will fail
We have outlined the following lessons learned without a good performance management system
from Deloitte's experience in China and other which helps translate strategy into results. More
countries with the hope of benefiting more progressive hospitals continually assess hospital
Chinese hospitals. performance as it relates to quality, staff, patient
satisfaction, and to gain the support of senior
Strategy #1 – Articulating the aspirations
leadership and frontline staff.
and strategy for operations excellence
across the organization Strategy #4 – Objectively assessing hospital
In China, most hospitals' strategies only exist performance prior to implementing
in "the mind of hospital CEOs"7. Departments improvement efforts
operate based on their own understandings Appropriate improvement objectives cannot be
and interests, which unavoidably creates determined without sounding baseline assessment
inefficiency and potential conflicts of interests and prioritization of efforts. Although many
within the hospital. To build hospital operational processes could benefit from improvement,
excellence, clear aspirations must be defined executives are tasked with determining which
and communicated across different levels of the process improvements will reap the greatest
organization. benefits. Many successful hospital executives
believe that identifying a few areas to focus the
Strategy #2 – Assembling a dedicated
performance improvement efforts on is most
change management team with strong
likely to yield positive results. Starting with a solid
senior leadership support to drive the
understanding of current performance is essential
operation excellence efforts
to accurately prioritizing efforts.
In the US, dedicated teams of clinicians, engineers,
and statisticians work together to identify system- Strategy #5 – Integrating operational
wide operational improvement opportunities and excellence into the hospital's new growth
manage the changes together with functional strategy and initiatives
leaders. Unlike their US counterparts, Chinese Chinese hospitals are pursuing many new growth
hospitals are not clearly organized and often initiatives. Creating hospital groups or building
the team tasked with operational improvement an affiliated network, investing in telemedicine,
responsibilities do not have the ability to work and partnering with Internet companies are
cross-functionally with strong support of senior just some examples. These initiatives present a
leadership. Another benefit of having a dedicated variety of operational excellence opportunities in
change management team is objectivity. While both front-end patient and clinical processes and
the project manager or assigned team is familiar back-end administrative processes. For example,
with the hospital objectives, their separation from consolidating and streamlining supply chain
the day-to-day operations of other units allows management when forming a hospital group is
them to more objectively assess and identify areas an opportunity for operational excellence. We
needing improvement. recommend hospitals to make a comprehensive
review of the operational improvement
opportunities as part of the new growth planning
and evaluation process to maximize the outcome
of new initiatives.
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Reference:
1. Deloitte Consulting: China's healthcare provider market - Riding the waves of reform. May 2015.
2. National Health and Family Planning Commission of People's Republic of China: China Health Care Development Report 2014.
5. China Economic Review: The productive efficiency of Chinese hospitals. Sep 2011
7. China rural health care administration: SWOT analysis of Public hospitals. June 2010
Authors
Gong Ting Melanie Tan
Senior Consultant Manager
Deloitte China Consulting Deloitte US Consulting
Acknowledgements
Special thanks to the following Deloitte colleagues for their contribution to this report.
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