HEALTH SERVICE OPERATIONS MANAGEMENT: STUDY GUIDE
WEEK 1: HEALTH SERVICE QUALITY AND VALUE-BASED HEALTHCARE
Operations management transforms input into output:
Example →
Unit-process-network
- Unit: a department in a health organization that performs operations of the same operation type
(usually part of a process)
- Process/chain: a series of operations that need to be performed to produce a particular service
- Network: combination of units and chains performing operations for services for several groups of
clients
Differences between the unit, process, and network approaches:
- Unit OM approach: focuses on resources, efficiency and workload, how people work together
producing that operation. Looked at as a single unit, not focused on the process
- Process OM approach: looks more to service level, e.g. throughput time or waiting time in the
process. Looked at how to combine operations to best deliver a service
- Network logistics approach: combination of process management and capacity management – easier
to optimize a process or a unit though
Services: 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 and/or physical resources or goods and/or systems of
the service provider, which are provided as solutions to
customer problems.
→ Characteristics of services:
- Customer participation
- Simultaneous creation and use
- Heterogeneity
- Perishable
- Intangible
- Non-transferrable ownership
,Service value & quality
Classical value chain (Porter)
- This primary process can be seen as different
steps to produce value
- Transforming a specific input to an output
- Supporting functions: infrastructure, human
researchers, etc
- Value: comparison between quality and service
delivered compared to the cost
Health service value:
Perceived quality is composed of three components:
- Clinical outcomes e.g. healing of a broken leg
- Functional outcomes e.g. what you can do again
- Experience e.g. feeling safe, friendliness
Sacrifices: cost (money) and effort (transport for example)
Health service quality:
o SERVQUAL (by Parasuraman et al)
▪ Reliability: delivering service on time and without errors
▪ Responsiveness: giving fast attention
▪ Empathy: understanding the customer
▪ Assurance: combination of different underlying dimensions (e.g. communication)
but also safety and e.g. competence of staff
▪ Tangibles: supporting roots that belong to the service
o Revised SERVQUAL (by Bowers et al)
▪ Reliability
▪ Responsiveness
▪ Empathy
▪ Communication
▪ Caring
Service quality expectations (Fitzsimmons et al)
,If there is a problem in the customer satisfaction then the Service Quality Gap Model can be used:
▪ Used to investigate and find solutions
▪ Looking at the different steps in the process of delivering the service to see where it
should be improved
▪ First gap: understanding the customer
• Can be solved by doing marketing research
• Asking the patient what they expect
▪ Second gap: service design
• Organize the care to meet the customer expectations
▪ Third gap: conformance
▪ Fourth gap: managing the evidence
• Influence patient perceptions
o This model can help to find where problems arise
Value-based Health Care in the Netherlands, part 1
What is the issue?
- The way we provide health care is fragmented and siloed. How can the system be redesigned?
- Difficult to gain insight into the patient journey
- Insurers also find the system fragmented
- Porter: the way we pay for healthcare incentivizes volume instead of value
o We measure quality mainly with process indicators, instead of outcome indicators that
measure healthcare
- There is an administrative burden
- Meyer et al, Elg et al: there is a call for balance between measuring for accountability and measuring
for improvement.
- Bohmer, Porter: we need orchestrated teams that take responsibility for the ‘full cycle of care’ (e.g.
teams constructed around what the patient needs, should cover the entire patient journey)
What is value?
- Porter: “Value is health outcomes achieved per dollar spent”
o Achieving health gain and quality of life
- Prada: “Value is in the eye of the beholder”
o Very personal what you experience as value
- Bisognano: “Focus: What matters to you?”
o Ask the patient what is really important to them
,Focus on value is a focus on outcomes: Porter’s three tiers and ICHOM
- The lower tiers are contingent on the higher tiers
- Each tier contains two levels:
o Tier 1: survival rate
o Tier 2: time to recovery
o Tier 3: sustainability of health
- Porter argues that measuring outcomes should be based on standard sets of indicators
- International Con… of Health Outcomes Measurement (ICHOM)
o 40 standardized sets of outcome indicators
o Patient reported outcomes should be included in the indicators
- Patient Reported Outcome Measures (PROM’s)
o Any report of the status of a patient’s health condition that comes directly from the patient,
without interpretation of the patient’s response by a clinician or anyone else
o Generic: EQ-5D Index/VAS; Domain specific: NRS pain, PROMIS anxiety; Disease specific:
Oxford Hip Score, Oxford Knee Score, before and after measurement
▪ For example: have you had any trouble with washing and drying yourself (all over)
because of your hip?
- PREM’s, Patient satisfaction, CQ index, e.g. factor Communication with doctors:
o Doctors treat me with respect, take me seriously, listened carefully, explained things clearly,
spent enough time, kept their appointments
- NPS: what is the likelihood that you would recommend this hospital to a friend or colleague
,Value-based healthcare (Ahaus, 2018):
The value agenda (Porter & Lee)
Explains how value based healthcare can be implemented
1: Organize into integrated practice units (IPU’s) – physicians should
be organized around patients needs. They should accept joing
accountability and responsibility for outcomes and costs
2: Measure outcomes and costs for every patient
3: Move to an alternative payment model – such as bundle
payment, for all care; diagnostics and treatment, while not limited
to one provider
4: Integrated care across facilities
5: Excellent services should be spread in the region
6: Build an enabling IT platform – this requires common data
definitions and access to the medical record
Value-based Health Care in the Netherlands, part 2
Integrated Practice Units (IPU’s) in Porter’s papers
- A dedicated team made up of clinical and non-clinical personnel
o Organized around the patient’s medical condition
o Organized or experienced as an organizational unit
o Taking responsibility for outcomes and costs full cycle of care
o Taking responsibility for engaging patients and their families in care
o Co-located in dedicated facilities
o Measuring outcomes and costs using a common measurement platform
o Meeting formally and informally on a regular basis to discuss patients, processes and
outcomes
- There are not many examples of IPU’s yet
o Rotterdam stoke services: Erasmus Medical Center, Laurens nursing home, GP’s, Zilveren
Kruis, municipality, and a few technology partners
,Orchestrated Team-based Redesign (Bohmer)
- An IPU is led by a clinical lead, and supported by a data
analyst, an IHH agent and by a patient panel – to ensure
patient engagement
- A disease team works with a dashboard that comprises
patient reported outcome measures, patient reported
experiences etc
- A disease team with encourage change of an
organizational structure of the hospital
Integrated care
- IPU’s integrate care
- Integrated care: a coherent and coordinated set of
services which are planned, managed and delivered to
individual service users across a range of organizations
and by a range of co-operating professionals and informal
carers
Rainbow model of integrated care (RMIC):
Dimensions and examples of integration (Valentijn et al):
- Gives a comprehensive view of what integrated care encompasses
Creating a quality dashboard for the IPU
- Use a bottom-up approach
- Engage both care professionals and patients
- Start with improvement indicators and complement these with accountability indicators
- Use existing data structures
- Distinguish indicators (signals) and their key determinants (managing performance)
- Formulate ambitious ‘stretch’ goals
,Example of a disease-specific dashboard:
LITERATURE WEEK 1
• Bowers et al. (1994): What attributes determine quality and satisfaction with healthcare delivery?
• Ahaus (2018): Perceptions of practitioners and exports on value-based healthcare: a mixed-methods
study.
• Fitzsimmons & Fitzsimmons: Chapter 6; Service Quality, pages 143-147
Bowers, Swan & Koehler, 1994
→ This article identifies five attributes of health care delivery that define patient’s perceptions of quality and
satisfaction
Introduction
- Nelson: main conclusion was that in practice, some of the attributes that research suggests
determining satisfaction have received insufficient attention and health care managers need to know
what attributes patients use in evaluating health care providers
- SERVQUAL – do not include some attributes that have received considerable empirical support in the
older patient satisfaction research stream
Background
- SERVQUAL:
o Tangibles: physical facilities, equipment, and appearance of personnel
o Reliability: ability to perform the promised service dependably and accurately
o Responsiveness: willingness to help customers and provide prompt service
o Assurance: knowledge and courtesy of employees and their ability to inspire trust and
confidence
o Empathy: caring, individualized attention the firm provides its customers
- These were statistically distilled from a list of 10 generic quality attributes from focus group
interviews
- Findings of SERVQUAL have been mixed, some studies raised questions about it
, - No evidence was obtained to learn if patients used additional or different dimensions of service
quality
Rationale of the study
- Carman argued that service-specific dimensions need to be added to completely capture the
consumer’s definition of service quality
- Two lines of evidence suggest that SERVQUAL may not completely cover dimensions of health care
services that are important to patients:
o The nature of health care services in terms of a higher and more intensive provider-
consumer interaction is different from the services from which SERVQUAL was developed
o The patient satisfaction literature suggests additional dimensions
Results
- 1) Caring was found to be a significant dimension
- 2) Communication was found to be a significant dimension
- 3 of the generic SERVQUAL dimensions were found to relate significantly to patient satisfaction: 3)
empathy, 4) responsiveness, and 5) reliability
- Because of the lack of ability to assess technical quality, consumers and purchasers utilize quality
attributes associated with the delivery of health care
- In order to manage consumer perceptions of quality in health care, administrators should focus on
the human components of delivery; steps include:
o Determining the specific attributes of quality employed by each institution’s customers to
judge quality and attempt to prioritize these attributes
o Establishing a means by which these attributes may be measured
o Developing operational definitions and specifying levels of appropriate performance
o Incorporating the delivery of quality dimensions into job descriptions, evaluations, and
compensation structures
o Managing customer expectations concerning level of performance
- Consistent monitoring of the patient-based quality dimensions should allow administrators to learn of
current quality perceptions and identify specific problem areas
Ahaus, 2018
→ This study aims to provide a comprehensive framework for value-based healthcare and identified four
categories: patient value, costs, organization of care, and steering of quality
Introduction
- Michael Porter:
o Reforming the healthcare system
o Papers on value-based healthcare
o Argues that we need a shift in focus from volume to value
- Currently, healthcare providers are paid predominantly by volume (on a basis of fee-for-service),
instead of by value
- Value is defined as: “health outcomes achieved per dollar spent”
- Focusing on value requires reforming the fragmented, siloed organization of healthcare delivery
governed by an equally partitioned healthcare purchaser
o It calls for a transformation to an organization of “orchestrated multidisciplinary teams” that
take responsibility “for the combined efforts over the full cycle of care”
- Outcomes and costs should cover the full care cycle for diagnosing and treating a medical condition,
involving multiple specialties from different care providers in the patient’s journey
o This journey could be organized into “integrated practice units” (IPU’s)
o Bohmer (2016) refers to multidisciplinary teams
Theoretical background
- Porter argues that outcomes should be related to health gain and to what matters for patients
concerning their health
o He proposes a “three-tiered hierarchy” (where tiers 2 and 3 being dependent on tier 1)
, o Outcomes include: the health status achieved or retained (tier 1), the process of recovery
(tier 2) and the sustainability of health (tier 3)
- Patient Reported Outcome Measures (PROM’s)
- Patient Reported Experience Measures (PREM’s)
- Likert 5-point scale
- Costs can be measured based on the activities performed in the full cycle of care
- Ported and Lee (2013) discuss a strategic value agenda (a roadmap about transformation in:)
o The way healthcare is organized into IPU’s
o The way we measure quality and costs
o The way the healthcare provider gets paid for the value delivered
- IPU’s need to be supported by an IT platform, data support, and implementation expertise
- In healthcare the current dominant way of paying the providers is fee-for-service
Results
Discussion
- The study delivered a framework with four categories: patient value, costs, organization of care, and
steering of quality
- The patient value category emphasizes the focus on clinical outcomes, PROM’s and PREM’s
o PROM data is seen as important input for shared decision making
- The costs category accentuates the need for costs reduction and for the introduction of payment
systems that include incentives that drive value
- The third category is about organization of care and promotes care pathway development with
patient involvement and data and change support, based on a close and flourishing multidisciplinary
collaboration
- The steering of quality category points out the importance of evidence-based practice, of linking
outcome to its determinants and of implementing a PDCA cycle
- Several elements should be included in the approach:
o The use of PROM-data as the subject of the medical consultation and as an important input
for shared decision-making
o The strengthening of an open and safe culture with the professional in the lead
o The use of data to manage segments or target populations on a regional level
, Fitzsimmons & Fitzsimmons, Chapter 6: Service Quality
- Service quality is a complex topic. It includes five dimensions: reliability, responsiveness, assurance,
empathy, and tangibles
- These dimensions are used to introduce the concept of a service quality gap; this gap is based on the
difference between a customer’s expectations of a service and the perceptions
- Reliability:
o The ability to perform the promised service both dependably and accurately. Reliable service
performance is a customer expectation and means that the service is accomplished on time,
in the same manner, and without errors every time
- Responsiveness:
o The willingness to help customers and to provide prompt service. Keeping customers waiting
creates much unnecessary negative perceptions of quality
- Assurance:
o The knowledge and courtesy of employees as well as their ability to convey trust and
confidence. This includes the following features: competence to perform the service,
politeness and respect for the customer, effective communication, and the general attitude
that the server has the customer’s best interest at heart
- Empathy:
o The provision of caring, individualized attention to customers. Includes: approachability,
sensitivity, and the effort to understand the customer’s needs
- Tangibles:
o The appearance of physical facilities, equipment, personnel, and communication materials
- The gap between expected and perceived service is a measure of service quality; satisfaction is either
negative or positive
Gaps in service quality
- The market research gap is the discrepancy between customer expectations and management
perceptions of these expectations
- The design gap results from management’s inability to formulate a service design that meets
perceptions of customer expectations and translates these into workable service standards
- The conformance gap occurs because actual delivery of the service does not meet the service
standards set by management
- The communication gap
results when customers perceptions
are at odds with the intended
service delivery
