HEALTHCARE OPERATONS

MANAGEMENT
Bob Castleman
CPM, CRM, CSCP, C.P.M.
HEALTHCARE OPERATONS
MANAGEMENT
HEALTHCARE OVERVEW
HEALTHCARE SSUES
OPERATONS MANAGEMENT N
HOSPTALS
LNKNG WTH HOSPTALS
HOSPTAL OPERATONS
MANAGEMENT
Healthcare is the most changing and the
most regulated industry today.
You must know operations management.
Quality is critical throughout the process.
HEALTHCARE - OVERVEW
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.
Today's 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
OVERVEW - US HOSPTALS
(2005)
5000 Hospitals (5900 in 1981)
850,000 Beds (1million in 1981)
4,500,000 Employees
26% are nurses
$500 Billion Revenue
OVERVEW Key Resources
New FACLTES are getting smaller,
specialized, and dispersed.
There is a growing shortage of SKLLED
EMPLOYEES.
TECHNOLOGY is advancing rapidly CT,
MR, Robotics, EMR (electronic medical
records).
NFORMATON SYSTEMS infrastructure
is a growing focus.
SSUES N HEALTHCARE
SHRINKING REVENUE
Reimbursement has shifted from
Retrospective (cost plus) to
Prospective (set fee for a diagnosis
DRG)
SSUES N HEALTHCARE
REVENUE
P4P: Pay for Performance incentive for better
outcomes
EBM: Evidence Based Medicine scientific
validation of procedures
BundIing: payments (hospital and physician share)
Gain sharing: hospital and physician share savings
"Never Events": will not be reimbursed for
"avoidable errors
SSUES - 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
SSUES - Resources
There is a shortage of NURSES
n 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
SSUES - Other
COSTS OF ADVANCNG TECHNOLOGY
expensive technology is now the
expectation of the patient, physician,
employee, .
GOVERNMENT & OVERSGHT
REPORTNG "8 indicators which must
be reported for each patient
SSUES - Operations
MANAGNG DECENTRALZED
FACLTES women's, urology, spinal,
bariatric, minor medical, etc.
RESOURCE TRACKNG AND
MANAGEMENT
Capital equipment location and utilization
Consumable inventory location and amount
SSUES - Operations
MPROVE OPERATONAL EFFCENCY
Flows: caregiver, support, lab, physician,
housekeeping, visitors
Processes - routings
Scheduling resource utilization
Wait Times ED, at resources
OPERATONS MANAGEMENT N
HOSPTALS
Growing focus on HospitaI Management
Terms being taught are "APCS friendly
Materials management
Supply chain management
CPFR
S&OP
Process / value stream mapping
"De-bottlenecking
LEAN / JT / 6 sigma / DMAC
OPERATONS MANAGEMENT N
HOSPTALS
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)
LNKNG WTH HOSPTALS
Healthcare's self-perception: people's
lives and health, "we're 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, .)
LNKNG WTH HOSPTALS
%ERMS
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)
LNKNG - Terms
Service line a grouping of closely related
product lines (orthopedic, women's 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
LNKNG - 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
OPERATONS MANAGEMENT N
HEALTHCARE
American Hospital Association (AHA)
aha.org
Association of Healthcare Resources and
Materials Management (AHRMM)
ahrmm.org
Health ndustry Group Purchasing Association
(HGPA)
higpa.org
nstitute of Supply Management (SM)
ism.org
A plethora of local and regional organizations
OPERATONS MANAGEMENT N
HEALTHCARE
References:
American Hospital Association web-site
Hospitals & Health Networks, American Hospital Association
nterviews by Bob Castleman (various)
Langebeer, James R. ,, 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
HEALTHCARE OPERATONS
MANAGEMENT
Bob Castleman
CPM, CRM, CSCP, C.P.M., CMfgT
rcastleman@comcast.net
901 854 0198
901 277 6684