Healthcare Operations management.

Introduction

A Hospital is a highly challenging work place. There are numerous bottlenecks that deteriorates the
productivity & efficiency of the Healthcare services delivered.
Brand reputation of a Hospital depends on how quick they resolve the issues raised without compensating the
quality and patient satisfaction. Spontaneity to untangle any situation is possible only with a strong “Hospital
Operations team”. Operations management team is responsible for managing all operational process of the
Hospital which includes all clinical & non-clinical departments to have a smooth working environment.
Health Care Operations

Health care operations are certain administrative, financial, legal, and quality
improvement activities of a covered entity that are necessary to run its business and
to support the core functions of treatment and payment. These activities, which are
limited to the activities listed in the definition of health care operations, include case
management and care coordination and business management and general
administrative activities.
What is operations management?

Operations management is the design, operation, and improvement of the processes

and systems that create and deliver the organization’s Health care services. The goal of
operations management is to more effectively and efficiently provide the Health care services.

“Operations management is essential for the efficient

functionality and provision of health services.”
 Challenges:
Efficient operation of hospitals is one of the major concern areas for the management team of any
organization as it involves multiple departments, numerous activities, intertwined processes, involvement of staff
at different levels and more importantly efficient use of scarce resources. As a result of such diversity, the
challenges are also diverse and of varied intensity, which requires detailing and working at various levels of the
organization. These challenges have a high impact on the productivity, employee morale and patient satisfaction.

Some of the operational challenges that need to be addressed on a priority basis.

 Improve and optimize planning and scheduling.

 Maximization of bed management and usage of hospital facilities.
 Understanding of Inpatient diagnosis and procedures with their cost.
 Streamlining and optimizing utilization of operation theatre.
 Streamlining and optimizing utilization of various assets including high-tech equipment.
 Wait time for patients at various departments and processes.
 Medication error.
 Average length of Stay vis-à-vis cost for the patient.
 Improved and efficient processes.
 Waste, fraud and abuse of resources.
 Today’s Hospitals Facing Major Challenges

Maintaining Technology
patient safety upgradation

Hospital
security
 Financial challenges and hospital productivity:
Hospitals are the second most energy-intensive buildings after restaurants, and globally, healthcare costs are on
the rise. These financial challenges— in addition to an aging world population and increasing energy costs—are
putting pressure on healthcare organizations to do more with less without compromising quality of care.

Maintaining patient safety:

Reducing the risk of infection, as well as other potential risks, such as power failures, is crucial in ensuring a high
quality of care and maintaining the organization’s reputation.

Regulatory standards

Noncompliance with regulatory standards can lead to a disruption in operations, poor quality of care, safety
issues, and substantial fines. At the same time, as energy demand rises, many countries are requiring healthcare
facilities to reduce carbon output and meet mandates for energy reductions.
Hospital security:

Healthcare facilities are often open 24/7, and those visiting are often under a great deal of stress when life and
health are at stake. Violence, infant abductions, patient wanderings, and theft of drugs and hospital assets are
major concerns.
Patient satisfaction:
The well-being of patients is a key to reducing length of stay and preventing readmissions. In green hospitals,
patients are discharged an average of 2.5 days earlier compared to traditional hospitals. Additionally, patient
satisfaction can also affect a hospital’s revenue. If the systems are operating poorly or not at all, quality metrics
such as Hospital Consumer Assessment of Healthcare Providers and Systems can be adversely affected.

Technology upgradation

Technology has brought about many improvements in health care that have a positive impact on the patient
experience in hospitals. Some facilities are using tracking technology originally designed for supply chain
management to make a big difference in lowering wait times and improving treatment across the continuum of
care.
Personal shortages
More hospitals are seeing their operations suffer as the number of insured patients grows, and the number of
Specialty Doctors and staff dwindle. And the demands from the changing healthcare industry are taking their toll on
the clinical staff.
 How to tries to resolve the challenges in healthcare ?

 The administrative team of the Hospital plays a vital role in streamlining administrative as well as non-clinical
operational process flows.
 The ultimate destiny of every Hospital is to “render quality service at low-cost”.
 The Hospital first seeks to find the severity of the issue. Then, they frame methods to approach problems and
to figure out the obstacles.
 But the major importance & focus is given in solving the clinical issues by medical departments. Where, a
Hospital seeks expertise to find a persistent solution making a complete change in the operations for the other
non-clinical barriers.
 The expert opinion assist in achieving operational efficiency that contributes to the success which leads the
organization towards a healthy growth
 Planning Scheduling.

What are the

core functions Purchasing. Controlling.
of operations
management?
Quality Inventory
Control Control
General Functions and Roles in Healthcare Operations Management

Planning, Planning Helping to design and Managing inventory Optimizing quality

Managing projects
information systems develop services through the supply chain control

Conducting Managing and Conducting enterprise

Managing logistics Forecasting for planning
procurement/purchasing maintaining facilities resource planning (ERP)

Navigating industrial Analyzing the value Optimizing resource Eliminating waste and
Planning for capacity
labor relations chain usage bottlenecks

Continuously improving Executing a company’s

processes strategic plan
10 Decision Areas of Healthcare OM
Process and
Design of Quality Location
Capacity
Services. Management. Strategy.
Design.

Human
Inventory Supply Chain Layout Design
Resources and
Management. Management. and Strategy.
Job Design.

Scheduling Maintenance
The Strategic Decisions

Design of Services

• Defines what is required of operations

• Product design determines quality, sustainability and human resources

Managing Quality

• Determine the customer’s quality expectations

• Establish policies and procedures to identify and achieve that quality
The Strategic Decisions

Process and Capacity Design

• How is a service produced?

• Commits management to specific technology, quality, resources, and
investment.

Location Strategy

• Nearness to customers, suppliers, and talent.

• Considering costs, infrastructure, logistics, and government.
The Strategic Decisions

Layout Strategy

• Integrate capacity needs, personnel levels, technology, and inventory

• Determine the efficient flow of materials, people, and information.

Human Resources and Job Design

• Recruit, motivate, and retain personnel with the required talent and skills.
• Integral and expensive part of the total system design.
The Strategic Decisions

Supply-Chain Management

• Integrate supply chain into the firm’s strategy.

• Determine what is to be purchased, from whom, and under what conditions.

Inventory Management

• Inventory ordering and holding decisions.

• Optimize considering customer satisfaction, supplier capability, and production
schedules.
The Strategic Decisions

Scheduling

• Determine and implement intermediate- and short-term schedules.

• Utilize personnel and facilities while meeting customer demands.

Maintenance

• Consider facility capacity, production demands, and personnel.

• Maintain a reliable and stable process.
 PARTS OF OPERATIONS MANAGEMENT

operations management consists of prime 3 parts Gap analysis-

Implementation
1 Gap analysis-

Gap analysis is a useful tool for all active organizations to examine the running system judiciously, for
finding out the probable areas where more attention is required so that the organization becomes
more dynamic.

2 Process improvement
The process entails the assessment of the present condition and tally the same with the
projected stage making the Hospital system more effective.

Implementation –
3
The process of implementing the new strategy into the Hospital system to vanish the gaps (includes
knowledge sharing, training & setting quality indicators) and checking its efficiency
 Operational (Healthcare) Goals

The private sector entrepreneurs operating healthcare facilities are focused on effectively achieving following key
goals to manage the healthcare infrastructure efficiently. Achievement of these goals is more critical for the public
healthcare sector facilities operator given the higher % of public sector spending globally.

 Improve Operational Effectiveness

 Improve the quality of services in a time bound manner
 Reduce medication Errors
 Improve clinical effectiveness
 Use Business Intelligence and Data Analytics
 Improve financial and administrative performance
 Reduce readmissions
 Enhance member/ patient satisfaction
 4 ways for efficiency in healthcare operations

Efficiency of healthcare facilities is a relative term and has multiple, domain specific definitions. Efficiency
ultimately translates to added value and improved performance outcomes. Revisiting the importance of
infrastructure and facility management in healthcare organization, it is more often the forgotten information which
can play an important role in operational continuity, optimization and continuous improvement.

fficiency of Process

fficient people

fficiency of technology

fficiency of solutions implementation

Efficiency of Process
Incorporates the planning and operational practices that significantly reduce or eliminate the negative impact on
clinical service continuity in healthcare facilities. The analysis of infrastructure data and its contribution to
decision making will result in better understanding of cause and effect scenarios affecting the environment of
care. When measured against tangible criteria such as cost and quality, appropriately weighted against the
potential severity of impact from infrastructure failure to patient care and patient experience, the process and its
outcomes become enablers to change management initiatives, people efficiency and productivity gains. This
level of complexity, and the number of variables involved in determining the right process and reaction under
certain conditions, can no longer be contained without the aid of technology.

Efficient people

It can make the most important difference to cost and quality of healthcare facility management service
delivery. The challenge to deliver better service quality at lower cost is driving the need to adopt
innovative ways in communication and people interaction with technology. Analyzing and collaboratively
managing patterns of infrastructure behavior creates visibility for potential issues and strengthens
engagement with all stakeholder groups in the organization. It turns a potentially daunting experience
into a positive, proactive risk mitigation approach, allowing for wide recognition, shared commitment
and support in required resolution. This information can also be used to continuously tune building
systems to facilitate the seamless interaction between services, enabling their logical connectivity and
response to uniquely complex and critical environment’s inputs
Efficiency of technology
Efficiency of technology and end-users’ adoption are key success factors. The
challenge remains to balance cost and complexity in implementation of intelligent
solutions with a measurable performance output by choosing the appropriate
technology to deliver the right process with an optimal utilization level.

Efficiency of solutions implementation

Efficiency of solutions implementation implies the decision to implement the right

solution in the right place, at the right time, for the right outcome. An efficient
implementation will support all other key considerations discussed thus far, providing
demonstrable ways to meet business objectives, offering ease-of-use for all stakeholders
and providing an environment that supports people-centric processes with near-term
Difference between hospital and other industries:

• Very simple difference. In all other industries whether manufacturing or services, customers always come by
choice, have an idea of what they want, what might be outcome and approximate cost. They have a choice in
selecting the service provider or the sellers. The state of mind is one that of anticipation of acquiring or
enjoying a benefit or a product.
• Hospital is a place where customers or patients do not come by choice. They are not sure of their outcome,
cost and many times don't have the time or ability to choose the service provider is not possible. The state of
mind is one that of anxiety.
• Hence the rules of game in hospital management change from other sectors.
• Most of the time, products, services and processes are built around the customers. But hospitals till recently
are built around doctors! This approach is changing and needs lot of improvement.
• While managing hospitals, we need to understand that we are delivering a combination of products, services
and above all well being.
• In this industry, the margin of error should almost be nil nay should be nil as that margin can lead to an
unwanted bag....
• This should be kept in mind while designing management systems in hospitals.
• Hospitals are led successfully by beneficial dictatorship open to review and changes. This means while there
should be an enforcement of management systems without exceptions and there should also be a continuous
review and consensus on changes to be identified through events
• The only similarity between management of hospitals and other industries is common sense that too in
delivering quality care!
There are five main differences between service and manufacturing organizations: the tangibility of their
output; production on demand or for inventory; customer-specific production; labour-intensive or automated
operations; and the need for a physical production location. However, in practice, service and manufacturing
organizations share many characteristics. Many manufacturers offer their own service operations, and both
require skilled people to create a profitable business.

Tangibility of Output
The key difference between service firms and manufacturers is the tangibility of their output. The output of a
service firm, such as consultancy, training or maintenance, for example, is a tangible feature i.e, something
that can satisfy a prospect's identified need.

Production on Demand

Service firms, unlike manufacturers, do not hold inventory; they create a service when a client requires it.
Manufacturers produce goods for stock, with inventory levels aligned to forecasts of market demand. Some
manufacturers maintain minimum stock levels, relying on the accuracy of demand forecasts and their
production capacity to meet demand on a just-in-time basis. Inventory also represents a cost for a
manufacturing organization.
Customer Specific Production

Service firms do not produce a service unless a customer requires it, although they design and develop the scope and
content of services in advance of any orders. Service firms generally produce a service tailored to customers’ needs, such
as 12 hours of consultancy, plus 14 hours of design and 10 hours of installation. Manufacturers can produce goods
without a customer order or forecast of customer demand. However, producing goods that do not meet market needs is
a poor strategy.

Labor Requirements and Automated Processes

A service firm recruits people with specific knowledge and skills in the service disciplines that it offers. Service delivery is
labor intensive and cannot be easily automated, although knowledge management systems enable a degree of
knowledge capture and sharing. Manufacturers can automate many of their production processes to reduce their labor
requirements, although some manufacturing organizations are labor intensive, particularly in countries where labor
costs are low.

Physical Production Location

Service firms do not require a physical production site. The people creating and delivering the service can be located
anywhere. For example, global firms such as consultants Deloitte use communication networks to access the most
appropriate service skills and knowledge from offices around the world.
Manufacturers must have a physical location for their production and stock holding operations. Production does not
necessarily take place on the manufacturer's own site; it can take place at any point in the supply chain.