Transcript Lean Six Sigma in Healthcare - Institute of Industrial Engineers

Introduction to Healthcare for
Industrial Engineers
This presentation incorporates the work of many active IIE and
SHS members and to whom the society expresses its appreciation
for their efforts and continuing the growth in our field.
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
Overview Of Content
 Healthcare Overview
− Quality
− Cost
 Overview of Hospitals
 IE’s in Healthcare
−
−
−
−
Background
Organizational Structure
Key Roles
Examples
 Future of Healthcare
 Resources
SOCIETY FOR HEALTH SYSTEMS
Healthcare Overview
Quality, Cost, Access
SOCIETY FOR HEALTH SYSTEMS
The U.S. Health Care Industry
• 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
Source: Institute for Industrial Engineers
SOCIETY FOR HEALTH SYSTEMS
U.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: 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: 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
U.S. Health Challenges: Quality
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).
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: Quality
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
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: Quality
Rapidly Exploding Medical Knowledge
In 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: 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
Institute of Medicine 2000
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 Centers for Disease Control
and Prevention
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
SOCIETY FOR HEALTH SYSTEMS
How Would You Measure Success?
• Patient Safety
• Patient Centeredness
• Timeliness
• Efficiency
• Effectiveness
• Equity
Voice of the Customer!
SOCIETY FOR HEALTH SYSTEMS
We’re Not The Best: IE’s Needed!
(1 = best, 5 = worst)
Australia
Canada
New
Zealand
UK
US
Patient Safety
2.5
4
2.5
1
5
PatientCenteredness
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
SOCIETY FOR HEALTH SYSTEMS
Healthcare System Today
Descriptive Statistics
Costs of Poor Quality
• 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
• 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: Cost
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: Cost
Total National Health Expenditures, 1980 – 2009(1)
$2,700
Billions
$2,200
$1,700
$1,200
$700
Inf lation Adjusted (2)
$200
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
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.
SOCIETY FOR HEALTH SYSTEMS
Percentage of GDP
U.S. Health Challenges: Cost
Source: www.oecd.org/health/healthdata
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: Cost
17.6%
16.6%
16.2%
16.0%
16.0%
15.9%
15.4%
13.8%
13.8%
13.7%
13.7%
13.8%
13.9%
13.7%
13.8%
13.5%
13.2%
14%
11.8%
Percentage of GDP
16%
12.5%
18%
14.5%
20%
16.1%
National Health Expenditures as a Percentage of Gross
Domestic Product, 1989 – 2009(1)
12%
10%
8%
6%
4%
2%
0%
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.
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: Cost
National Health Expenditures as a Percentage of Gross
Domestic Product and Breakdown of National Health
Expenditures, 2009
$2.49 Trillion
U.S. GDP 2009
Other, 33.6%
Nursing Home Care, 5.5%
Other
Sectors,
82.4%
Health Care
Expenditures,
17.6%
Prescription Drugs, 10.1%
Physician Services, 20.3%
Hospital Care, 30.5%
Source: Centers for Medicare & Medicaid Services, Office of the Actuary. Data released January 6, 2011.
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: Cost
National Expenditures for Health Services and
Supplies(1) by Category, 1980 and 2009(2)
$235.6B
$2,330.1B
Other, (3) 15.5%
Other, (3) 11.4%
Nursing Home Care, 6.48%
Other Medical Durables and
Non-durables, 5.88%
Prescription Drugs, 5.11%
Home Health Care, 1.01%
Other Prof essional, (4) 7.1%
Nursing Home Care, 5.88%
Other Medical Durables and
Non-durables, 3.35%
Prescription Drugs, 10.73%
Home Health Care, 2.93%
Other Prof essional, (4) 7.3%
Physician Services, 20.25%
Physician Services, 21.71%
Hospital Care, 42.67%
Hospital Care, 32.58%
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.
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: Cost
Distribution of National Health Expenditures by Source of
Payment, 1980, 2000, and 2009(1)
$255.7B
$1,378.0B
Out-of-pocket, 12.0%
Out-of-pocket, 14.7%
Out-of-pocket, 22.8%
$2,486.3B
Other Private, 6.3%
Other Private, 6.5%
Other Private, 7.9%
Private Insurance, 32.2%
Private Insurance, 33.2%
Private Insurance, 27.0%
Other Government, 13.8%
Other Government, 14.5%
Other Government, 17.5%
Total Medicaid, 15.5%
Total Medicaid, 14.8%
Total Medicaid, 10.2%
Medicare, 20.2%
Medicare, 16.3%
Medicare, 14.6%
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.
SOCIETY FOR HEALTH SYSTEMS
U.S. Health Challenges: Access
Percent Growth in Medicare Spending per Beneficiary vs.
Private Health Insurance Spending per Enrollee, 1989 –
2009(1,2)
20%
18%
16%
14%
12%
Private Health
Insurance
10%
8%
6%
4%
2%
Medicare
0%
-2%
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.
SOCIETY FOR HEALTH SYSTEMS
Inefficiencies 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 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
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’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 Hospitals
SOCIETY FOR HEALTH SYSTEMS
Types 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 Ownership
Source: Kaiser Family Foundation 2009, www.statehealthfacts.org
SOCIETY FOR HEALTH SYSTEMS
Types Of Hospitals
Number of Community Hospitals,(1) 1989 – 2009
7,000
6,000
All Hospitals
Hospitals
5,000
4,000
Urban Hospitals
3,000
2,000
Rural Hospitals
1,000
0
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09(2)
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 available
to 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.
SOCIETY FOR HEALTH SYSTEMS
Hospital Bed Changes
Number of Beds and Number of Beds per 1,000
Persons, 1989 – 2009
4.5
1,200,000
4.0
1,000,000
3.0
Beds
800,000
600,000
2.5
Number of Beds per
1,000
2.0
1.5
400,000
1.0
Beds per Thousand
3.5
Number of Beds
200,000
0.5
0.0
0
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals.
SOCIETY FOR HEALTH SYSTEMS
Hospitals & Health Systems
Number of Hospitals in Health Systems,(1) 2000 – 2009
3,000
2,900
Hospitals
2,800
2,700
2,600
2,500
2,400
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
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.
SOCIETY FOR HEALTH SYSTEMS
Hospital Costs
SOCIETY FOR HEALTH SYSTEMS
Hospital Costs
SOCIETY FOR HEALTH SYSTEMS
Hospital Labor Costs
SOCIETY FOR HEALTH SYSTEMS
Patient Volume Is Increasing
Inpatient Admissions in Community Hospitals, 1989–2009
37
36
35
Millions
34
33
32
31
30
29
28
27
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals.
SOCIETY FOR HEALTH SYSTEMS
Patient Time In Hospital Is Flat
Total Inpatient Days in Community Hospitals,
1989 – 2009
260
Millions
220
180
140
100
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals.
SOCIETY FOR HEALTH SYSTEMS
ALOS Is Gradually Decreasing
Average Length of Stay (ALOS) in Community Hospitals,
1989 – 2009
Days
5.4
5.5
5.5
5.6
5.6
5.6
5.7
5.7
5.7
5.8
6.0
6.1
7.1
7.2
7.0
6.5
6.2
5.9
6
6.7
7
7.2
8
7.2
9
5
4
3
2
1
0
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2009, for community hospitals.
SOCIETY FOR HEALTH SYSTEMS
ED Trends
Emergency Department (ED) Visits and Emergency
Departments(1) in Community Hospitals, 1991 – 2009
Emergency Departments
130
5,300
125
5,100
120
4,900
115
4,700
110
4,500
105
4,300
100
4,100
95
90
3,900
85
3,700
80
3,500
Emergency Departments
Number of ED Visits (Millions)
ED Visits
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
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.
SOCIETY FOR HEALTH SYSTEMS
ED Trends
Hospital Emergency Department Visits per 1,000 Persons,
1991 – 2009
430
410
Visits per Thousand
390
370
350
330
310
290
270
250
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
08
09
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.
SOCIETY FOR HEALTH SYSTEMS
ED Trends
Percent of Hospitals Reporting Emergency Dept.
Capacity Issues by Type of Hospital, March 2010
ED is "At" Capacity
Urban Hospitals
ED is "Over" Capacity
23%
Rural Hospitals
27%
20%
Teaching Hospitals
11%
31%
19%
Non-teaching Hospitals
32%
22%
All Hospitals
14%
21%
0%
10%
50%
17%
20%
30%
51%
36%
38%
40%
50%
60%
Source: American Hospital Association 2010 Rapid Response Survey: Telling the Hospital Story.
SOCIETY FOR HEALTH SYSTEMS
Inpatient & Outpatient Trends
Inpatient Use Has Plummeted While Outpatient
Use Has Soared
600,000
550,000
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
Hospital
2003
2002
2000
1998
1997
1990
1985
1980
1975
1970
Total Number of Outpatient Visits
(in 000s)
Total Number of Hospital Days
(in 000s)
Total Hospital Days and Outpatient Visits, 1970-2003
Outpatient
Source: IIE & Vital and Health Statistics, National Hospital Discharge Survey, 1995; 2000 AHA Statistics; 2005 AHA Statistics
SOCIETY FOR HEALTH SYSTEMS
Healthcare Is Highly Regulated
SOCIETY FOR HEALTH SYSTEMS
The Changing Focus
Coordination
Strategy
Ambulatory
Care
Physician
Relationships
Old
New
Fragmented
Continuity
“Every institution for itself”
Strategic Alliances
Feeder for Hospital
Core Business with
Independent Sites
Loose Affiliation
Hospital/Physician
Integration
SOCIETY FOR HEALTH SYSTEMS
Typical Hospital Organizational
Structure
 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
Structure
SOCIETY FOR HEALTH SYSTEMS
Multi-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 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
Network
 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
Network
Source: IIE & http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=459233
From parallel practice to integrative health care: a conceptual framework
SOCIETY FOR HEALTH SYSTEMS
IE’s in Healthcare
BACKGROUND
ORGANIZATIONAL STRUCTURE
KEY ROLES
SOCIETY FOR HEALTH SYSTEMS
Healthcare Systems Engineering
Application Areas
IE/OR in Healthcare
 Rich and diverse history
 As old as the field of industrial
engineering itself
 Gilbreth’s 1911 surgical studies
 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/OR
1911-18
Time studies of surgery and delays
(F. Gilbreth)
1920-40
Basic process and capacity analysis
1945
‘Management engineering’ invented and
applied to nursing (L. Gilbreth)
1972
Nurse scheduling (branch and bound)
algorithms (Warner, Wolfe)
1970-72
Perishable inventory theory applied to blood
banks (Pierskalla)
1972-73
Simulation planning models (Rising)
1957
Deming advocates use of SPC in healthcare
1959
First queuing and scheduling studies (Smalley,
others)
1965
Clinical information systems
(Kennedy et al)
1979
Forecasting bed needs (Griffith)
1960s
Flagle’s Nursing Acuity Studies at Johns
Hopkins
1980
Cancer screening optimization (Eddy)
1965
Hospital inventory optimization
(Reed, Stanley)
1974
1967-82
1980’s
1988
1965-66
First simulation queuing studies of patient
waits (Nuffield Report, Fetter, Thompson)
Regional planning OR models (Wolfe)
Diagnostic-related groups (DRG’s)
MDM utility theory (Weinstein)
Total quality management (Berwick)
1990’s
Patient safety movement (Leape)
2000’s
Lean & Six Sigma
SOCIETY FOR HEALTH SYSTEMS
IEs Needed!
Systems
Engineering/
Healthcare
Partnership
National Academy of Engineering
and Institute of Medicine, 2005
SOCIETY FOR HEALTH SYSTEMS
Where Do IE’s Work In Healthcare?
Organizations
Departments
 Hospitals
 System engineering
 HMO’s
 Management engineering
 Physician offices
 Quality management
 Long-term care facilities
 Process improvement
 Outpatient clinics
 Performance improvement
 Public health (CDC, etc)
 Clinical safety
 Insurance organizations
 Information systems
 Government agencies
 Facilities management
 Healthcare Consulting Firms
 Others
 Healthcare Information Systems
Companies
SOCIETY FOR HEALTH SYSTEMS
IE’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,
report to many departments and have various titles
SOCIETY FOR HEALTH SYSTEMS
Management Engineering
Department: Example
Quality
Improvement
• Clinical Pathway Development
• Quality Improvement Training
Management
Engineer
•
•
•
•
Process Improvement
Productivity Management
Position Control
Labor Standards Development
Chief Operating
Officer
Director of
Management
Systems
Data
Analyst
• Productivity Monitoring
• Benchmarking
• Marketing Data Analysis
Finance
• Financial Decision Support
Management
Engineer
(Decision Support)
• Cost Accounting
• Benchmarking
• Labor Standards Development
SOCIETY FOR HEALTH SYSTEMS
What Do IE’s Do In Healthcare?
 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
Maximize Quality and Safety, Minimize Cost
SOCIETY FOR HEALTH SYSTEMS
What Do IE’s Do In Healthcare?
Practitioners
Researchers
 Data analysis
 Statistical quality control
 Benchmarking
 Disease screening optimization
 Cost analysis and reduction
 Scheduling algorithms
 Economic analysis
 Feasibility studies
 Process/quality improvement
 Simulation flow analysis
 Queuing analysis
 Space planning and layout
 Appointment scheduling
optimization
 Regional capacity planning
 Organ transplant optimization
 Statistical surveillance
 Cognitive and human factors
research
 Public policy
SOCIETY FOR HEALTH SYSTEMS
What Do IE’s NOT 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 Healthcare
 Productivity Management
 Staffing and Scheduling
 Process Improvement
 Inventory Management
All require excellent
change management
skills!!
 Simulation
 Benchmarking
 Facility Design and Capacity Analysis
 Operations and System Analysis
 Quality Improvement
SOCIETY FOR HEALTH SYSTEMS
The Importance Of
Change 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:
The 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 Healthcare
EXAMPLES
SOCIETY FOR HEALTH SYSTEMS
Key Operational & Strategic
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 Management
• Develop systems to
effectively project and
manage labor resources
as part of the
organization’s budgeting
process.
• Create systems to
monitor and control
positions, skill mix and
labor expense.
Source: Institute for Industrial Engineers
• Develop capabilities to
compare the
organization’s
performance to other
high-performing
organizations .
Budgeting &
Forecasting
Benchmarking
Position
Control
Productivity
Monitoring
• Implement systems to
continuously monitor
labor productivity at all
levels of the
organization.
SOCIETY FOR HEALTH SYSTEMS
Productivity Management: Budgeting &
Forecasting - Roles For The IE
I. Units of
service
Monitor productivity
Review position requests relative
to budget vs actual performance
V. Budget
Adherence
Incorporate into position
control; Other performance
indicators
IV.
Administration
& Control
Establish Units-of-Service
II. Forecast
III. Budget
Development
Develop forecasting
models
Project staffing
requirements & costs
Project supply expenses
Source: Institute for Industrial Engineers
SOCIETY FOR HEALTH SYSTEMS
Decision Support: Surgery
Balanced Scorecard
Financial
Quality
Service
Satisfaction
Team / Supply Readiness
Patient H&P / Tests ready
Accurate Preference Cards
Patient / Site Verification
Correct Procedure / Drugs
Timely Intervention
Reduce Time / Delays
Records / Tests Ready
Supply / Equipment Ready
Reduced Case Delays
Reduce Procedure Delays
Discharge Delays
Convenience & Access
Information Access
No Supply / Equipment Delays
Patient Wait Times
Effective Staff / Supplies
Reduced Wait time
Accurate Case Times
Reduced Delays
Limit Delay / Change
No Space Delays
Just-in-Time Inventory
Improve Coordination
Timely Info Access
Start Times & Follow on
Physician Wait Times
Reduced overtime
Smooth Flow & Access
Right Supplies, Place & Time
High Info Availability
Ease of Info Access
Patient Care
Physician Office
Pre-Admission
Case / Supply Preparation
Pre-surgery
Procedure
PACU
Reduce OR Time
Insurance Authorization
Efficient Preference cards
Pre-test results
Staffing Mix
Timely Recovery
Management
Scheduling
Case Management
Staffing
Facilities
Logistics
Communication
Information Systems
Efficient OR Allocations
High OR Utilization
Efficient Scheduling
High Value Proc Space
Contracting / Usage
Comm / Docmt Time
Manage Profitability
Accurate Case Info
Smooth Urgent / Add-ons
Patient Information
Reduced Delays
Clinical Standards
Real-time Mgmt Info
Real-time Patient Info
Increase
Profit per
Procedure
Right Patient,
Procedure,
& Care
Source: Institute for Industrial Engineers
Reduce Total
OR Time
Improve
Convenience
& Access
SOCIETY FOR HEALTH SYSTEMS
Simulation 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 Example
Response Planning for Avian Flu
No Intervention
Interventions
SOCIETY FOR HEALTH SYSTEMS
Process Analysis Example
Billing Error Process
Basic Data Analysis
Correlation to Paperwork Volume?
Data Entry Process
Print Out New Entries
at End of Each Day
Highlight Error
for Correction
Temps hired due
to high volume
Monthly Fraction of Errors
New Member Application,
Termination, or Re-Enrollment
100% Inspection of
Previous Day's Input
Monthly Volume
(r = 0.23)
Oct-94
Dec-94
Jun-94
Aug-94
Apr-94
Feb-94
Oct-93
Dec-93
Aug-93
Apr-93
Jun-93
Feb-93
Oct-92
Dec-92
Aug-92
Apr-92
Jun-92
Feb-92
Process Remaining p/w,
Activate Member's Record
Dec-91
Data Entry
Error Found?
Oct-91
Yes
Fraction of Input Errors
Error Reduction Over Time
Month
SOCIETY FOR HEALTH SYSTEMS
Quality Control Examples
Surgical Site Infections
Mortaliti es / 1000 D ischarges
Fall Rate
Falls
and Slips
3.5
2.5
2
1.5
1
0.5
0
8
2
9
4
6
8
10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40
Subgroup Number
Fiscal Period
Perioperative Antibiotic Timing
T rial X-bar Control Chart
X-bar Chart
LCL
0
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
0
LCL
-100
-200
9/95
LWL
5
CL
12/93
1/94
10
100
11/93
15
9/93
10/93
20
UCL
200
7/93
8/93
UWL
6/93
25
300
5/93
UCL
4/93
30
Average Time (Mins) Antibiotic is
Administered Before 1st Incision
Ventilator-Associated Pneumonia (VAP)
35
8/95
7
7/95
6
5/95
6/95
5
3/95
4/95
4
2/95
3
1/95
2
12/94
9 10 11 12 1
11/94
8
10/94
7
8/94
9/94
6
6/94
7/94
5
5/94
4
4/94
3
3/94
2
2/94
11 12 1
VAP rate per 1000 ventilator days
Falls/1000 patient days
3
Subgroup (Month) Number
SOCIETY FOR HEALTH SYSTEMS
Project Management / Facilitation
SOCIETY FOR HEALTH SYSTEMS
IE 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 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
initial project
opportunities and
choices
SOCIETY FOR HEALTH SYSTEMS
Future of Healthcare
SOCIETY FOR HEALTH SYSTEMS
Future
The future will be led by the needs and wants of
the patient – trends include:
 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
SOCIETY FOR HEALTH SYSTEMS
Resources
SOCIETY FOR HEALTH SYSTEMS
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 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 hospitals
 Other 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
LinkedIn 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
 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])
SOCIETY FOR HEALTH SYSTEMS
Professional 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
networking is vital
part of your
professional growth
and success
SOCIETY FOR HEALTH SYSTEMS
Some 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 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 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.
SOCIETY FOR HEALTH SYSTEMS