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Summary Course GW4018MV Capacity & Process Management
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Summary Course GW4018MV Capacity & Process Management
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Summary Course GW4018MV Capacity & Process ManagementInclude lectures!
Week 1: Introduction to CPM
Mandatory literature:
Vissers, Elkhuizen and Proudlove. Operations Management for Healthcare. Routledge,
London, 2022. Chapter 1
The term ‘operations management’ (OM) or Health Services Operations Management
(HSOM) refers to the planning and control of the processes that transform inputs into
outputs.
- Consider the individual doctor/patient consultation. The input to the consultation
process is a patient with a request for healthcare. The output of the consultation
process might be that the patient is diagnosed, referred to a further service, or cured.
The resources that must be managed to transform inputs into outputs are those
associated with the care provided by the individual doctor: for example, their time and
any diagnostic or therapeutic services that they use.
In this illustration, the role of the HSOM process is to ensure that adequate resources are in
place on time to provide a service for the patient without them having to wait too long.
Hence, HSOM focuses on the individual provider that produces a health service and, on the
tasks involved to produce this service in such a way that service standards are met, whilst
also avoiding wasteful provision of excessive resources.
- The individual provider may be for example a doctor, a department, a hospital or
network of hospitals and community-based services.
Figure 1.1 presents an example of an HSOM view of an individual hospital provider.
The central function of the care provider is to provide patient care. Hence, patient demand
for care is the key input which influences the planning and control of the resources required
to transform inputs into outputs. However, as Figure 1.1 illustrates, other ‘inputs’ influence
both the types and levels of patient demand and the ways in which the hospital delivers
,care. These other ‘inputs’ include the overall level of finance available to provide care, the
availability of goods from suppliers and the nature and actions of other hospitals.
Figure 1.1 highlights three generic processes for transforming inputs into outputs: clinical,
management and ancillary.
- Clinical processes are the most important as these are the primary processes in which
the transformations take place.
- The clinical processes are supported by management processes that take care of the
planning and control of resources required for the diagnosis and treatment of patients.
At the operational level, individual patients are scheduled for appointments or
an admission requiring outpatient clinic resources or operating theatre
resources and a bed in a ward.
At the tactical level, availability of resources for the coming weeks is checked.
At the strategic level, checks are made on the amounts of resources required
for the longer term.
Therefore, management processes are needed to support the clinical processes.
- Finally, ancillary processes are needed to support the general functioning of the
hospital. These processes include the organisation of services for cleaning hospital
wards and departments and for maintaining hospital equipment.
The resources to be planned and controlled within each of these processes include staff
(e.g., doctors, nurses), materials (e.g., drugs, prostheses) and equipment (e.g., X-ray
machines, buildings). Inadequate planning and control of resources within any of the
processes can have an impact on the others.
- For example, deficiencies in the management processes for ordering materials may
affect the quality of care that can be delivered by the clinical processes (e.g., a
shortage of equipment to support care at home may lead to delays in patient discharge
from hospital). Similarly, if services for the cleaning of hospital wards are inadequate,
the potential for hospital-acquired infections will be increased, as will the likelihood of
subsequent ward closures.
Hence, when planning and controlling the resources that they use, an ‘individual’ provider
must also consider the ways in which their actions might impinge upon other ‘individual’
providers: for example, other hospital or community-based departments. In this sense, their
actions represent ‘inputs’ to other processes for transforming inputs into outputs.
Finally, Figure 1.1 illustrates the outputs of the OM processes that must be monitored.
- Health status markers (e.g., mortality rates, levels of morbidity and disability)
- client experience, where the client is the patient and/or their family. In addition, the
client of a process might also be a hospital doctor who requires a service from a
diagnostic department, or a hospital manager who requires details of patient activity
levels from doctors.
- ‘resource’ performance are relevant to all three generic processes as they are needed
to monitor the efficiency (e.g., patient lengths of stay, response times of ancillary
support services, resource utilisation) and effectiveness (e.g., use of ‘appropriate’ or
‘modern’ procedures) with which resources have been used to transform inputs into
outputs.
,Again, there are relationships and potential conflicts between the different types of output.
- For example, measures to increase patient satisfaction by reducing patient waiting
times might require additional investment and mean that the hospital is unable to
achieve its budgetary targets. Similarly, budgetary pressures may mean that a hospital
is unable to invest in all of those services that are known to be effective in improving
health status. Hence, in its attempts to ensure that there is effective and efficient
organisation of the delivery of services, the role of HSOM is to achieve an ‘acceptable’
balance between different types of output.
As value-based healthcare relates the value for customers to the costs of delivering services,
the patient process is put in the foreground, i.e., the journey of the patient along with the
services to answer the patient demand in the form of a diagnosis and treatment.
- So instead of a focus on individual encounters as indicated in Figure 1.1, the focus of
hospital management today is on the total process of the patient, leading to output
and outcomes.
Definition HSOM: Health Services Operations Management can be defined as the analysis,
design, planning, and control of all of the steps necessary to provide services for patients in
such a way that their needs are met, that service standards are met, and resources are used
efficiently.
1.2 Context of Health Services Operations Management
Drivers for change and factors which influence decision making.
External factors
Probably the main external factor which affects the behaviour of individual providers is the
overall healthcare system setting in which they function: for example, market and for profit,
national health system or government regulated.
- In a for-profit setting, the emphasis for providers is on profit maximisation. As a result,
providers will want to maximise the number of patients that they can treat at
‘acceptable’ standards of quality but at ‘minimum’ costs per case. The market
environment, therefore, creates the incentives for providers to ensure that the
processes for transforming inputs into outputs are functioning in an effective and
efficient way. Providers must continually review and invest in their transforming
processes as a means of maintaining their market share, attracting new patients, or
reducing costs.
- In a national health system or government-regulated system, providers are budgeted
by the contracts annually arranged with purchasers (government-related bodies or
insurance organisations). In such a system, the main incentive for providers is to
ensure that budgetary targets are not exceeded. Hence, providers need to invest in
mechanisms for monitoring the use of key resource areas such as the use of beds and
theatres. Beyond the need to ensure that ‘cost’ performance targets are achieved,
providers in public health services probably have lower incentives to continually review
and update transforming processes or to ensure that other ‘output’ measures, such as
client perception are ‘satisfactory’.
However, this situation is changing, and in the absence of market incentives, regulation is
being used as a vehicle for change.
, Irrespective of the health system in use, all systems seem to adopt a value-based
healthcare perspective in which the value of a health service for the customer is key and
value is defined as health per dollar or benefits for the customer versus costs. This
adoption of a value-based perspective offers many challenges to healthcare providers.
1. Firstly, value needs to be defined more precisely.
2. Next, the value chain from the perspective of the customer may require collaboration
with other providers.
Other external factors are affecting the context in which HSOM decisions are made as well:
- changes in the demographic mix of their populations, in particular there is an
increasing proportion of older people.
- advances in medical technology (for example, new drugs and other forms of
treatment) are either changing or expanding the options that are available for patient
care.
- via the internet and other media outlets, patient knowledge of healthcare treatments,
and so their expectations of healthcare providers, are increasing.
Internal factors
The internal environment for decision making is in itself unusual.
- Often, the roles and responsibilities of those involved in decision making are either not
very clearly defined or are overlapping.
Healthcare management often takes the form of dual management, in which
clinical professionals share management responsibilities with administrative
staff and business managers. There are commonly parallel hierarchies of
different staff groups. Finding out who is actually managing the system at
different levels can therefore be a real issue in healthcare organisations.
- In addition, healthcare management decision making often takes the form of finding
consensus among the different actors involved: managers, medical professionals,
nursing staff, paramedical disciplines, administrative staff. These actors often have
different interests and priorities across the metrics and trade- offs of quality versus
costs or effectiveness versus efficiency. It is therefore often difficult to find the
appropriate trade-off between these two perspectives of managing organisations.
1.3 Modelling and design cycle
Most HSOM studies make use of a quantitative model of the system under study and follow
the steps of a design cycle.
A model is a formal description of a system or a part of a system under study.
A system is a collection of elements that are distinguished from the environment, due to a
common perspective, and that have a mutual relationship. Within a system one can
distinguish:
- subsystems (grouping of elements) and
- aspect systems (grouping of relationships).
For example, a hospital consists of several departments (subsystems). If we are studying
the throughput times of radiology requests, we are only interested in the relationships
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