Health Service Operations Management
Lecture 1 – Introduction of the course
Health service operations management is the analysis, design, planning and control of all the steps necessary to deliver services to
clients in healthcare (to transform input into output). It is a combination of healthcare services, and service operations management
(consisting of service management and operations management).
Operations management ensures that adequate resources are in place to provide acceptable services for patients:
- Input – patient with a health need or request, prosthesis used during surgery (material input).
regulations
For hospital processes there are different inputs (patient demand, availability of goods from
suppliers, level of finance available, other hospitals and providers.
- Operation/process – where inputs are transformed into outputs, and thereby adding value; input operation output
service to help the patient with a health need > driven by a desire to produce a service or
resources
product for the patient. Operation can also imply a group of activities that constitute together
the operation. Activities involve different tasks. For hospitals, there are different processes
(clinical process; resources used for diagnosis and treatment of patients, management process; support clinical processes
by organizing payment and purchasing goods from suppliers, ancillary processes; support general functioning of the
hospital).
- Output – patient with added value (without health need) due to diagnosis, referral or cure. In healthcare there are different
outcome values (health status markers for the clinical process; patient satisfaction and mortality rates, resource
performance for the efficiency and effectiveness; length of stay and use of appropriate procedures). There are potential
conflicts and relationships between the different types of output: patient satisfaction increases may reduce the ability to
achieve budgetary targets.
- Resources – a resource is used in the operation for the transformation into outputs, but can also be reused (not something
that gets lost; material input) > healthcare staff, healthcare equipment used during surgeries. Some resources can be
shared (surgery theater or intensive care department used by more than one patient), but there are also dedicated
resources (ward for patients with colon issues). Some recourses are leading, for example the operating theatre requests
capacity on other wards of the hospital (operating theatre is leading, wards are following recourses). Inadequate planning
and control of resources within any of the processes has an impact on the others (shortage of equipment to support care
at home may lead to delays in patient discharge from hospitals) > planning is influenced by predictability of the number of
operations in the chain, the duration of the operations and the routing of patients through the chain of operations; with
lower predictability, there is much variation and requires more flexibility compared to high predictability.
- Regulations – regulations that have to be used during the e required to deliver that service. medical guidelines that help
to get an added value from the operation. When a physician is more experienced (which is often wanted to give trust), the
guidelines may not be needed anymore.
Service operations in daily practice are for example; going from home to university by tram (tram is used, input is passenger
that wants to travel from A to B, there are regulations etc.), accounting work (request from customer, working procedures,
regulations, delivering reports etc.).
There are different types of operations (operation type is a group of operations using the same recourses, but the amount of
recourses may differ) in one operation (for example surgical procedure).
- Alteration – surgical procedure in an operating theatre; surgeon alters something to the patient.
- Transportation – transport of the patient from the ward and vice versa
- Inspection – inspection of the wound.
- Storage – in healthcare there is no storage, it is more about waiting. In normal industries they may cope with peak demand
due to the inventory, in healthcare this cannot be done, patients cannot be stored. As there is no storage, this leads to
waiting (patient perspective when high demand, professional perspective when low demand). Not all waiting in healthcare
systems is unproductive (for a drug to become effective or recovery may be productive waiting); non-productive waiting is
an important indicator for the malfunctioning of the system.
.
There are two buffers to cope with variability; if there is peak demand new/extra capacity can be brought in (capacity buffer), or
have patients or professionals waiting (time buffer).
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Often in the length of stay distribution there is a high peak (large number of patients) for short lengths of stay (day operations, go
home on the same day), and a long tail for some patients having a longer length of stay > Erlone distribution. This may be due to
patient variation; some patients are more complex and therefore have a longer stay. Or it is the effect of poor organization as follow
up care may not be arranged (for example due to shortage of nurses at elderly care facilities) and therefore patients stay
unnecessary longer at the hospital than needed. The care process should be more patient flow centered rather than patient
centered, to improve the patient flow to shorten throughput time.
There are different levels in operations. Operations exist of different activities; in surgical operations you have surgeon, anesthetist,
support staff, assistants with different tasks (clean theatre, perform surgery, hand instruments, administer patient). Those activities
exist of different tasks. Hierarchy; process > operation > activity > task.
The process is a combination of operations that resembles the patient journey (GP refers to specialist in hospital, who may refer to
surgeon, then back to the specialist in hospital and GP). However, the healthcare system (and insurances) is not organized in a
process way, it is organized in a fragmented way (silo of primary and secondary care etc.). An example of a short process with high
predictability is a total knee operation (highly routinized process of care) and a long process with low predictability is an organ
transplantation (longer length of stay and variation in rejecting of the organ), chemotherapy, mental health disorders (more
complex care is more uncertain).
Health service operations management distinguishes units (a department in a health organization that performs operations of the
same operation type; emergency department, outpatient department), process/chain (series of operations that need to be
performed to produce a particular service (process for single provider, chain for multiple providers included in the delivery)) and
network (a combination of units and processes performing operations for services for several groups of clients (integrated care)).
- Unit logistics approach – the focus of this approach is resource utilization and how balanced the workload is. Strong point
is that it focusses on capacity management (needed, utilized capacity). But a weak point is that it is not process oriented, it
is helpful when it is complemented with a chain or network logistics approach.
- Process logistics approach – the focus of this approach is on the service level, the quality delivered and therefore considers
the whole process. Strong point is that it is focused on process management, having attention for the patient journey and
how it is organized; expose areas where performance of health processes might be improved. But a weak point is that it is
not related to the use of resources.
- Network logistics approach – the focus of this approach is the trade off between service level and resource utilization.
Strong point is therefore that it is a combination of capacity and process management. But a weak point is that it takes
more effort to do both.
Cases (depends on the argumentation what is right or wrong)
- The unit manager should always strive to increase the occupancy level of a unit. No; it diminishes the resilience of the unit
that is needed to cope with peak demands. Yes; services are perishable, the bed is there and will be empty, so you could
have helped more people by filling that bed.
- Mrs. Jansen receives her insulin shot by a home care nurse at 8 am. Mr. Pietersen is her neighbor, the home care nurse
stops by shortly after 8 to help him with a personal hygiene need. By scheduling it this way the team (unit) is very efficient.
No; this patient with personal hygiene may take a lot of time and another patient has to wait with for example his insulin
shot; it is not time critical to have personal hygiene in time, whether having the insulin shot is time critical. Yes; in travel
time perspective it is very efficient as they live close to each other. It depends on what is more important, 8 am is a high
peak for home care as all patients have needs.
Healthcare is a service management context. In history there has been a move from agricultural economy to a manufacturing
economy, to currently a service economy > there has been a movement from industrial revolution (1800), to production
management (1900), to operations management (1975), now to service operations management. With services there is no
ownership anymore; use it and pay for it rather than owning it.
A service is an activity or series of activities of more or less intangible nature that normally, but not necessarily takes place in
interactions between the customer and service employees (it is about personalizing the care) and/or physical resources or goods
, Health Service Operations Management
and/or systems of the service provider, which are provided as solutions to customer problems (Gronroos). In services, a distinction
must be made between inputs (customers themselves) and resources (facilitating goods, employee labor etc.).
There are different distinctive characteristics of services (some are interrelated)
- Customer participation – the customer is participant in the process and therefore attention to the physical surroundings of
the service facility is needed (not as in factories where cars are built). For example shared decision making in healthcare. It
is not only important on the care level but also on the organization of care level; when wanting to redesign a process, you
need to involve patients as they know their journey.
- Simultaneous creation and use – while the service is created, it is consumed by the customer and therefore services cannot
be stored, therefore there are no buffers to absorb fluctuations in demand > seen as open system.
- Perishable – with services there is lost opportunity when the service is not used; an empty bed is gone as it cannot be stored
for another busy day. Full utilization of service capacity is a management challenge as customer demand exhibits variation
and inventory to absorb fluctuations is not possible.
- Intangible – services are ideas and concepts and therefore intangible. Therefore, customers must rely on the reputation of
the service firm (cannot see, feel or test it as with products). Governments have intervened to guarantee acceptable service
performances through registration, licensing, and regulation.
- Heterogeneity – services vary from customer to customer due to the intangible nature of services and customer as
participants in the service delivery. Variability in services is not bad (adjusted to patient needs), unless customers perceive
significant variation in quality > customers expect to be treated fairly and get the same service that others receive.
- Non-transferable ownership – customers do not receive ownership with services. Resources are shared among customers
by allocating the use of them (flight seat) and customers pay to have use of the asset for a specific time (human labor dentist
for example). Classification of services is: goods rental (equipment use), place and space rental (seat on plane use), labor
and expertise (surgery use), physical facility usage (gym use), network usage (internet).
in the figure on demand services are depicted as a continuum.
Perfectly on demand services are 24/7 available everywhere
(availability), instantaneous supplied so there is no time lack
(responsiveness), and highly divisible and easily addable
(scalability).
Health services are for example the dementia village, in which dementia patient live like they would live in a normal city; it is fully
dedicated to people with a disability. They go to hairdresser, do shopping etc. do the things they would normally do, however, they
don’t pay for it. The people working in this dementia village are fully trained to work with those disabled people. All operations are
combined into the dementia village; have a new home which is different from their former home but it is delivered as a package of
care. The disabled people still have a daily life routine.
In services it is really about the experience. There is some expectation and perceptions of how the service is. The service package is
a bundle of goods and services consisting of 5 features with information that is provided in some environment.
- Supporting facility – physical resources that must be in place before a
service can be offered (hospital). Criteria to evaluate: location, interior
decorating, supporting equipment, facility layout.
- Facilitating goods – material purchased or consumed by the buyer or
items provided by the customer (supplies that are needed). Criteria to
evaluate: consistency, quantity, selection
- Information – data that is available from the customer or provider to
enable efficient and customized service (electronic health record,
planning). Criteria to evaluate: accurate, timely, useful.
- Explicit services – benefits that are readily observable by the senses and
that consist of the essential or intrinsic features of the service (pain
