Introduction to Healthcare for Industrial Engineers...Introduction to Healthcare for Industrial...

Introduction to Healthcare for Introduction to Healthcare for Industrial EngineersIndustrial Engineers

This presentation incorporates the work of many active IIE and This presentation incorporates the work of many active IIE and SHS members and to whom the society expresses its appreciation SHS members and to whom the society expresses its appreciation

for their efforts and continuing the growth in our field.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 andand emphasis to suit their own experiences and audience.

SOCIETY FOR HEALTH SYSTEMS

Overview Of ContentOverview Of Content

Healthcare OverviewQuality− Quality

− Cost

Overview of HospitalsOverview of Hospitals

IE’s in Healthcare− Backgroundg− Organizational Structure− Key Roles

Examples− Examples

Future of Healthcare

R


Resources

Healthcare OverviewHealthcare OverviewHealthcare OverviewHealthcare Overview

Quality, Cost, Access


The U.S. Health Care IndustryThe 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

SOCIETY FOR HEALTH SYSTEMSSource: Institute for Industrial Engineers

insurance for qualifying patients through Medicare/Medicaid

U.S. Health Challenges: QualityU.S. Health Challenges: Quality

Most American hospitals provide safe and effectivef th t j it f ti t th tcare for the vast majority of patients, the vast

majority of the time

The vast majority of caregivers are well trained and conscientiousconscientious

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


is nothing short of miraculous


…but that does not change a harsh reality…

…care is far too unsafe…

…and quality is too inconsistent…



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 treatmentsSchuster MA, McGlynn EA, Brook RH. How good is the quality of healthcare in the United States? Millbank Quarterly, 1998; 76(4):517-63 (Dec).


American health care" t it i ht”"gets it right”

54.9%5 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).


So why is this so hard?

Inadequate levels of safety and inconsistent quality result from clinical uncertainty which in turn results from:

A i i l l h lth i t− An increasingly complex healthcare environment− Rapidly exploding medical knowledge − Lack of valid clinical knowledge (poor evidence)g (p )− Over reliance on subjective judgment



Rapidly Exploding Medical KnowledgeI 2004 th U S N ti l Lib f M di iIn 2004, the U.S. National Library of Medicine

added

almost 11,000 new articles per weekto its on-line archives

That represented about 40% of all articles published, world-wide, in biomedical and clinical journals.

(1 500 3 500 l t d f d 5 d k)(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


20 articles per day, 365 days of the year

This is an impossible task…


Medical errors and iatrogenic injury:• 98,000 deaths / year

770 000 2 illi ti t i j i• 770,000 - 2 million patient injuries• $17 - $29 billion dollars

More US deaths/yr than for traffic yaccidents, breast cancer, & AIDS

Hospital-acquired infections:1 7 illi NSI/ $3 000/

Institute of Medicine 2000

• 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

Adverse drug reactions:• 770,000 to 2 million per year• $4.2 billion annually

Centers for Disease Control and Prevention


y• 6-10% of hospital patients suffer 1 or more

serious adverse events

How Would You How Would You Measure SuccessMeasure Success??

• Patient Safety

• Patient Centeredness

Ti li• Timeliness

• Efficiencyy

• Effectiveness

• Equity

Voice of the Customer!SOCIETY FOR HEALTH SYSTEMS

Voice of the Customer!

We’re We’re NNotot The Best: IE’s Needed!The Best: IE’s Needed!

Australia Canada New UK US

(1 = best, 5 = worst)

Australia Canada Zealand UK US

Patient Safety 2.5 4 2.5 1 5

Patient-Centeredness 2 3 1 5 4

Timeliness 2 5 1 4 3Timeliness 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

Healthcare System TodayHealthcare System Today

Descriptive Statistics Costs of Poor Quality

• Largest single industry in the world• Approximately 17% of the USA’s

GDP

• Estimated 35% of all healthcare costs = waste

• Duplication non value addGDP• Expenses increasing at 4 - 10%

annuallyM j t b

• Duplication, non-value add, redundancies

• Medical errors, adverse events, preventable deaths process• Major pressure to become more

efficient and provide higher quality careSh t f kill d k

preventable deaths, process defects

• Shortage of skilled workers

Sound familiar?


Sound familiar?

U.S. Health Challenges: CostU.S. Health Challenges: Cost



Total National Health Expenditures, 1980 – 2009(1)

$2,200

$2,700

$1,200

$1,700

Billi

ons

$200

$700

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

Inf lation Adjusted(2)

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


http://www.cms.gov/nationalhealthexpenddata/downloads/benchmark2009.pdf.(2) Expressed in 1980 dollars; adjusted using the overall Consumer Price Index for Urban Consumers.

U.S. Health Challenges: CostU.S. Health Challenges: Costge

of G

DP

Per

cent

a


Source: www.oecd.org/health/healthdata


National Health Expenditures as a Percentage of Gross Domestic Product, 1989 – 2009(1)

%

% 5% 3.2% 3.5% 3.8%

3.7%

13.9

%

3.8%

3.7%

3.7%

3.8%

3.8% 14.5

%

15.4

%

15.9

%

16.0

%

16.0

%

16.1

%

16.2

%

16.6

%17

.6%

16%

18%

20%

11.8

%

12.5 13 13 1 1 1 1 1 1 1 1

10%

12%

14%

age

of G

DP

4%

6%

8%

Per

cent

a

0%

2%

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09



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.


National Health Expenditures as a Percentage of Gross Domestic Product and Breakdown of National Health

Expenditures 2009

$2.49 TrillionU.S. GDP 2009

Expenditures, 2009

Other, 33.6%

Nursing Home Care, 5.5%

Prescription Drugs, 10.1%

Nursing Home Care, 5.5%

Physician Services, 20.3%Other

Sectors, 82.4%

Health Care Expenditures,

17.6%

Hospital Care, 30.5%


Source: Centers for Medicare & Medicaid Services, Office of the Actuary. Data released January 6, 2011.


National Expenditures for Health Services and Supplies(1) by Category, 1980 and 2009(2)

Other Medical Durables and N d bl 5 88% Other Medical Durables and

Nursing Home Care, 6.48%Nursing Home Care, 5.88%

Other,(3) 11.4% Other,(3) 15.5%$235.6B $2,330.1B

Physician Services, 20.25%

Other Professional,(4) 7.1%Other Professional,(4) 7.3%

Home Health Care, 1.01%Home Health Care, 2.93%

Prescription Drugs, 5.11%Prescription Drugs, 10.73%

Non-durables, 5.88% Other Medical Durables and Non-durables, 3.35%

Hospital Care, 42.67% Hospital Care, 32.58%

Physician Services, 21.71%

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


(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.


Distribution of National Health Expenditures by Source of Payment, 1980, 2000, and 2009(1)

Oth P i t 7 9%

Other Private, 6.5% Other Private, 6.3%Out-of-pocket, 22.8% Out-of-pocket, 14.7% Out-of-pocket, 12.0%

$255.7B $2,486.3B$1,378.0B

Other Government 13 8%

Private Insurance, 27.0%

Private Insurance, 33.2% Private Insurance, 32.2%Other Private, 7.9%

Total Medicaid, 10.2%Total Medicaid, 14.8%

Total Medicaid, 15.5%Other Government, 17.5%

Other Government, 14.5%Other Government, 13.8%

Medicare, 14.6% Medicare, 16.3% Medicare, 20.2%

1980 2000 2009



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.

U.S. Health Challenges: AccessU.S. Health Challenges: Access

Percent Growth in Medicare Spending per Beneficiary vs. Private Health Insurance Spending per Enrollee, 1989 –

2009(1,2)2009( , )

14%16%18%20%

6%8%

10%12%14%

Private Health Insurance

-2%0%2%4%6%

Medicare

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.

Inefficiencies Drive Up CostInefficiencies 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

F t ti fFragmentation of care− Repeated medical histories and duplicative diagnostic tests

Services that yield savings are not used effectivelyServices that yield savings are not used effectively− Preventive care− Care for chronic conditions, such as hypertension, high cholesterol,

diabetes


diabetesSource : IIE & Ronald M. Davis, MD, Addressing the Rising Cost of Health Care, AMA eVoice, Feb 2008,

More Contributions To Rising CostsMore Contributions To Rising Costs

Intensity of ServicesLonger life spans and increase in chronic disease− Longer life spans and increase in chronic disease

− Increased need for on-going treatment, long-term care

Inflation in high cost / high technology productsInflation in high cost / high technology products− Pharmaceuticals− Surgical supplies

Non-Clinical Spending- especially “transactional” costs

Duplicative services− Facilities & technology


− Staffing

What Are The Solutions To The What Are The Solutions To The Rising Costs Of Healthcare?Rising Costs Of Healthcare?

Reduce the burden of preventable didisease

Health care delivery must be more efficient

Must reduce nonclinical health system costs (administration, overhead, etc.)

Promote value-based decision makingPromote 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

What Does It All Mean For IE’sWhat Does It All Mean For IE’s

IE’s are in a unique position to greatly improve the healthcare system

• Improving quality of careg y• Decreasing cost through increasing

efficiencyy

This creates a high demand for Process Optimization and Project Management


Overview of HospitalsOverview of HospitalsOverview of HospitalsOverview of Hospitals


Types Of HospitalsTypes Of Hospitals

Community − Profit – Investor owned − Non-Profit – Supported by local funding

Teaching- Associated with a Medical College & provide clinical training to medical g p g

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 orpediatrics, 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,

lt ti ith b i li t d h hi ti t d i t i


consultations with subspecialists and when sophisticated intensive care facilities are required

Community Hospitals By OwnershipCommunity Hospitals By Ownership


Source: Kaiser Family Foundation 2009, www.statehealthfacts.org

Types Of HospitalsTypes Of Hospitals

Number of Community Hospitals,(1) 1989 – 2009

5,000

6,000

7,000

All Hospitals

2,000

3,000

4,000

Hos

pita

ls

Urban Hospitals

0

1,000

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09(2)

Rural Hospitals

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 availableto the public


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.

Hospital Bed ChangesHospital Bed Changes

Number of Beds and Number of Beds per 1,000 Persons, 1989 – 2009

3.5

4.0

4.5

1,000,000

1,200,000

Number of Beds

2.0

2.5

3.0

600,000

800,000

per

Thou

sand

Bed

s

Number of Beds

Number of Beds per 1,000

0.5

1.0

1.5

200,000

400,000

Bed

s

0.0089 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



Hospitals & Health SystemsHospitals & Health Systems

Number of Hospitals in Health Systems,(1) 2000 – 2009

2,900

3,000

2 600

2,700

2,800

Hos

pita

ls

2,400

2,500

2,600

2000 2001 2002 2003 2004 2005 2006 2007 2008 20092000 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


(1) Hospitals that are part of a corporate body that may own and/or manage health provider facilities orhealth-related subsidiaries as well as non-health-related facilities including freestanding and/or subsidiary corporations.

Hospital CostsHospital Costs


Hospital CostsHospital Costs


Hospital Labor CostsHospital Labor Costs


Patient Volume Is IncreasingPatient Volume Is Increasing

Inpatient Admissions in Community Hospitals, 1989–2009

35

36

37

32

33

34

35

Milli

ons

28

29

30

31

2789 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09



Patient Time In Hospital Is FlatPatient Time In Hospital Is Flat

Total Inpatient Days in Community Hospitals, 1989 – 20091989 2009

220

260

140

180

Milli

ons

100

140

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09



ALOS Is Gradually DecreasingALOS Is Gradually Decreasing

Average Length of Stay (ALOS) in Community Hospitals, 1989 – 2009

7.2

7.2

7.2

7.1

7.0

6.7

6.5

27

8

9

6

6.2

6.1

6.0

5.9

5.8

5.7

5.7

5.7

5.6

5.6

5.6

5.5

5.5

5.4

4

5

6

7

Day

s

2

3

4D

0

1

89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09



ED TrendsED Trends

Emergency Department (ED) Visits and Emergency Departments(1) in Community Hospitals, 1991 – 2009

5,100

5,300

125

130

)

ED Visits Emergency Departments

4,500

4,700

4,900

,

105

110

115

120

epar

tmen

ts

isits

(M

illion

s)

3,900

4,100

4,300

90

95

100

105

Em

erge

ncy

D

mbe

r of

ED

Vi

3,500

3,700

80

85

90

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

E

Num


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.

ED TrendsED Trends

Hospital Emergency Department Visits per 1,000 Persons, 1991 – 2009

390

410

430

330

350

370

er T

hous

and

270

290

310

330

Vis

its p

e

250

270

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.

ED TrendsED Trends

Percent of Hospitals Reporting Emergency Dept. Capacity Issues by Type of Hospital, March 2010

23% 27% 50%Urban Hospitals

ED is "At" Capacity ED is "Over" Capacity

19%

20%

32%

11%

1%

31%

T hi H it l

Rural Hospitals

22%

19%

14%

32%

36%

51%

Non-teaching Hospitals

Teaching Hospitals

21% 17% 38%

0% 10% 20% 30% 40% 50% 60%

All Hospitals


Source: American Hospital Association 2010 Rapid Response Survey: Telling the Hospital Story.

Inpatient & Outpatient TrendsInpatient & Outpatient Trends

Inpatient Use Has Plummeted While Outpatient Use Has Soared

Total Hospital Days and Outpatient Visits, 1970-2003

550 000600,000

ays

Total

350 000400,000450,000500,000550,000

er o

f Hos

pita

l Din

000

s)l N

umber of O

ut(in 000s

200,000250,000300,000350,000

Tota

l Num

be ( tpatient Visits

s)

150,000,

1970

1975

1980

1985

1990

1997

1998

2000

2002

2003

SOCIETY FOR HEALTH SYSTEMSSource: IIE & Vital and Health Statistics, National Hospital Discharge Survey, 1995; 2000 AHA Statistics; 2005 AHA Statistics

Hospital Outpatient

Healthcare Is Highly RegulatedHealthcare Is Highly Regulated


The Changing FocusThe Changing Focus

Old New

Coordination Fragmented Continuity

Strategy “Every institution for itself” Strategic AlliancesStrategy Every institution for itself Strategic Alliances

A b l t Feeder for Hospital Core Business withAmbulatory Care

Feeder for Hospital Core Business with Independent Sites

PhysicianRelationships

Loose Affiliation Hospital/Physician Integration


Typical Hospital Organizational Typical Hospital Organizational StructureStructure

Two Governance StructuresBoard of Directors & CEO / Management− Board of Directors & CEO / Management

− Medical Staff

K L d hi R l i l dKey Leadership Roles include− CEO – Chief Executive Officer

COO Chief Operations Officer− COO – Chief Operations Officer− CNO – Chief Nursing Officer− CFO – Chief Financial OfficerCFO Chief Financial Officer− CIO – Chief Information Officer− CMO - Chief Medical Officer (VP of Medical Affairs)


Typical Hospital Organizational Typical Hospital Organizational StructureStructure


MultiMulti--Hospital System StructureHospital System Structure

Organizational Structures− Traditional Functional − Matrix Organizations

System vs Facility Structure− System functions vary by organizationy y y g− IE’s may be at system level or facility level (or both)


Integrated Health Care SystemsIntegrated Health Care Systems

“ t k f i ti th t id“ a network of organizations that provides, or arranges to provide a coordinated

ti f i t d fi dcontinuum of services to a defined population and is willing to be held fi ll d li i ll t bl f thfiscally and clinically accountable for the health status of the population served.”

Stephen Shortell, et al., 1993


Integrated Healthcare Delivery Integrated Healthcare Delivery NetworkNetwork

Aligns health care facilities to deliver integrated healthcare services by improving quality and reducing costs to aservices by improving quality and reducing costs to a defined geographic area

Hospital and physician components and at least one otherHospital 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 agreementsOwnership or formal agreements

Source: IIE & KnowledgeSource , Integrated Healthcare Networks Market Overview , 2008


g , g ,

Integrated Healthcare Delivery Integrated Healthcare Delivery NetworkNetwork


Source: IIE & http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=459233From parallel practice to integrative health care: a conceptual framework

IE’s in HealthcareIE’s in HealthcareIE’s in HealthcareIE’s in Healthcare

BACKGROUND

ORGANIZATIONAL STRUCTURE

KEY ROLES


Healthcare Systems EngineeringHealthcare Systems Engineering

IE/OR in HealthcareRi h d di hi t

Application Areas• Rich and diverse history

As old as the field of industrial engineering itself

• Hospital operations– Patient and information flow– Appointment access– Scheduling

Gilbreth’s 1911 surgical studiesScheduling

– Facility layout and location

• Public health– Vaccination optimization– Outbreak surveillance– Emergency response

• Public policy– Disease screening– Regional planning

O h i


– Organ sharing

History Of Healthcare IE/ORHistory Of Healthcare IE/OR

1911-18Time studies of surgery and delays (F. Gilbreth)

1920-40 Basic process and capacity analysis

1972 Nurse scheduling (branch and bound) algorithms (Warner, Wolfe)

Perishable inventory theory applied to bloodp p y y

1945 ‘Management engineering’ invented and applied to nursing (L. Gilbreth)

1957 Deming advocates use of SPC in healthcare

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)

1974 Regional planning OR models (Wolfe)

1967-82 Diagnostic-related groups (DRG’s)

1965Clinical information systems (Kennedy et al)

1960s Flagle’s Nursing Acuity Studies at Johns Hopkins

1979 Forecasting bed needs (Griffith)

1980 Cancer screening optimization (Eddy)p

1965Hospital inventory optimization (Reed, Stanley)

Fi t i l ti i t di f ti t

1980’s MDM utility theory (Weinstein)

1988 Total quality management (Berwick)


1965-66 First simulation queuing studies of patient waits (Nuffield Report, Fetter, Thompson) 1990’s Patient safety movement (Leape)

2000’s Lean & Six Sigma

IEs Needed!IEs Needed!

Systems Engineering/Engineering/ Healthcare PartnershipPartnership

National Academy of Engineering


National Academy of Engineering and Institute of Medicine, 2005

WhereWhere Do IE’s Work In Healthcare?Do IE’s Work In Healthcare?

OrganizationsHospitals

Departments

S i iHospitals

HMO’s

Physician offices

• System engineering

• Management engineering

• Quality managementLong-term care facilities

Outpatient clinics

• Quality management

• Process improvement

• Performance improvementPublic health (CDC, etc)

Insurance organizations

Government agencies

• Clinical safety

• Information systemsGovernment agencies

Healthcare Consulting Firms

Healthcare Information Systems

• Facilities management

• Others


Healthcare Information Systems Companies

IE’s In Healthcare: Job TitlesIE’s In Healthcare: Job Titles

Management Engineer

D i i S t A l tDecision 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, There is no clear path: IE’s work in many areas, t t d t t d h i titlt t d t t d h i titl

There is no clear path: IE’s work in many areas, There is no clear path: IE’s work in many areas, t t d t t d h i titlt t d t t d h i titl


report to many departments and have various titlesreport to many departments and have various titlesreport to many departments and have various titlesreport to many departments and have various titles

Management Engineering Management Engineering Department: ExampleDepartment: Example

Chi f O tiChief OperatingOfficer

FinanceQualityImprovement

Director of Management

Systems

• Clinical Pathway Development• Quality Improvement Training • Financial Decision Support

ManagementEngineer

ManagementEngineer

(Decision Support)

DataAnalyst

• Process Improvement• Productivity Management• Position Control• Labor Standards Development

• Cost Accounting• Benchmarking• Labor Standards Development

• Productivity Monitoring• Benchmarking• Marketing Data Analysis


WhatWhat Do IE’s Do In Healthcare?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 CostMaximize Quality and Safety, Minimize CostMaximize Quality and Safety, Minimize CostMaximize Quality and Safety, Minimize Cost

WhatWhat Do IE’s Do In Healthcare?Do IE’s Do In Healthcare?

PractitionersData analysis

ResearchersSt ti ti l lit t lData analysis

BenchmarkingCost analysis and reduction

• Statistical quality control

• Disease screening optimization

• Scheduling algorithmsEconomic analysisFeasibility studiesProcess/quality improvement

• Scheduling algorithms

• Regional capacity planning

• Organ transplant optimizationProcess/quality improvementSimulation flow analysisQueuing analysis

• Statistical surveillance

• Cognitive and human factors research

Space planning and layoutAppointment scheduling optimization

research

• Public policy


p

WhatWhat Do IE’s Do IE’s NOTNOT Do In Healthcare?Do In Healthcare?

Practice medicine

Make medical decisions

I f i li i l tiInfringe on clinical prerogatives

Pretend to know medicine/clinical contentPretend to know medicine/clinical content


Typical IE Projects In HealthcareTypical IE Projects In Healthcare

Productivity Management

Staffing and Scheduling

Process ImprovementAll require excellent All require excellent change managementchange managementAll require excellent All require excellent change managementchange management

Inventory Management

Simulation

change management change management skills!!skills!!

change management change management skills!!skills!!

Simulation

Benchmarking

Facility Design and Capacity AnalysisFacility Design and Capacity Analysis

Operations and System Analysis


Quality Improvement

The Importance Of The Importance Of Change ManagementChange 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 -– 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


p j y g g g

IE’s In Healthcare:IE’s In Healthcare:The Importance Of Interpersonal SkillsThe Importance Of Interpersonal Skills

Negotiating with Decision Makers

Selling data and building accountability

Facilitation in difficult situationsFacilitation 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


healthcare setting

“You can design and create and build theYou can design and create and build the most wonderful place in the world, but it takes people to make the dream a reality ”takes people to make the dream a reality.

Walt DisneyWalt Disney


IE’s in HealthcareIE’s in HealthcareIE’s in HealthcareIE’s in Healthcare

EXAMPLES


Key Operational & Strategic Key Operational & Strategic Challenges For Hospitals Challenges For Hospitals

Inpatient throughput and Length-of-Stay

Surgical Services - productivity scheduling throughputSurgical Services productivity, scheduling, throughput

Inpatient Nursing - productivity & staffing

Emergency Services throughput & productivityEmergency 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, C


Laboratory, Cardiac

Physician services - owned practices

Labor Productivity ManagementLabor Productivity Management

• Develop capabilities to compare the organization’s performance to other high-performing

• Develop systems to effectively project and manage labor resources as part of the organization’s budgeting high performing

organizations .organization s budgeting process.

Budgeting & Forecasting Benchmarkingg

I l t t tC t t t

Productivity Monitoring

Position Control

• Implement systems to continuously monitor labor productivity at all levels of the organization.

• Create systems to monitor and control positions, skill mix and labor expense.


Productivity Management: Budgeting & Productivity Management: Budgeting & Forecasting Forecasting -- Roles For The IERoles For The IE

I Units ofI. Units of service Establish Units-of-ServiceMonitor productivity

Review position requests relativeto budget vs actual performance

II. ForecastV. Budget Adherence Develop forecasting

models

III. Budget Development

IV. Administration

& Control Project staffing requirements & costsProject supply expenses

Incorporate into position control; Other performance indicators


Decision Support: Surgery Decision Support: Surgery Balanced ScorecardBalanced Scorecard

Financial Quality Service Satisfaction

Reduce OR TimeInsurance AuthorizationEfficient Preference cardsPre-test results

Team / Supply ReadinessPatient H&P / Tests readyAccurate Preference CardsPatient / Site Verification

Reduce Time / DelaysRecords / Tests ReadySupply / Equipment ReadyReduced Case Delays

Convenience & AccessInformation AccessNo Supply / Equipment DelaysPatient Wait Times

Physician OfficePre-AdmissionCase / Supply PreparationPre-surgery

Patient CareQ y

Pre test resultsStaffing MixTimely Recovery

Patient / Site VerificationCorrect Procedure / DrugsTimely Intervention

Reduced Case DelaysReduce Procedure DelaysDischarge Delays

Patient Wait TimesEffective Staff / SuppliesReduced Wait time

Pre surgeryProcedurePACU

ManagementEfficient OR Allocations Accurate Case Info Accurate Case Times Start Times & Follow onSchedulingHigh OR UtilizationEfficient SchedulingHigh Value Proc SpaceContracting / UsageComm / Docmt TimeManage Profitability

Smooth Urgent / Add-ons Patient InformationReduced DelaysClinical StandardsReal-time Mgmt InfoReal-time Patient Info

Reduced DelaysLimit Delay / ChangeNo Space DelaysJust-in-Time InventoryImprove CoordinationTimely Info Access

Physician Wait TimesReduced overtimeSmooth Flow & AccessRight Supplies, Place & Time High Info AvailabilityEase of Info Access

gCase ManagementStaffing FacilitiesLogisticsCommunicationInformation Systems

IncreaseProfit per

Right Patient,Procedure

Reduce TotalOR Time

ImproveConvenience


Profit perProcedure

Procedure,& Care

OR Time Convenience& Access

Source: Institute for Industrial Engineers

Simulation And Risk AnalysisSimulation And Risk Analysis

Risk analysis is a useful tool to capture the uncertainty and to account for multiple factors affecting infection p gtransmission.

Components affecting the risk of infection transmission i l d h i l i l i k i t ti i k d itiincludes 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.

A i l l iAssessing alternate solutions

− Identify and assess the factors that may reduce the risk of infection transmission


of infection transmission

− Change medical practices

Public Health ExamplePublic Health Example

Response Planning for Avian FluNo Intervention Interventions


Process Analysis ExampleProcess Analysis Example

Billing Error Process Basic Data Analysis

Correlation to Paperwork Volume?New Member Application,

Termination, or Re-Enrollmen

Data Entry Process

Temps hired dueto high volume

Correlation to Paperwork Volume?

Print Out New Entries at End of Each Day

100% Inspection of

Highlight Error for Correction

100% Inspection of Previous Day's Input

Data Entry Error Found?Yes

Monthly Volume(r = 0.23)

Error Reduction Over Time

Process Remaining p/w, Activate Member's Record


Month

Quality Control ExamplesQuality Control Examples

Fall Rate

3

3.5

Surgical Site InfectionsFalls and Slips

1

1.5

2

2.5

3

Falls

/100

0 pa

tient

day

s

0

0.5

11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9

Fiscal Period

F

Subgroup Num

2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40

25

30

35

tilat

or d

ays

UCL

UWL 200

300

UCL

Trial X-bar Control ChartPerioperative Antibiotic Timing

X-bar ChartVentilator-Associated Pneumonia (VAP)

5

10

15

20

VA

P ra

te p

er 1

000

vent

LWL

LCL

-100

0

100CL

LCL


01 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

LCL

Subgroup (Month) Number

-200

4/93

5/93

6/93

7/93

8/93

9/93

10/9

3

11/9

3

12/9

31/

94

2/94

3/94

4/94

5/94

6/94

7/94

8/94

9/94

10/9

4

11/9

4

12/9

4

1/95

2/95

3/95

4/95

5/95

6/95

7/95

8/95

9/95

Project Management / FacilitationProject Management / Facilitation


IE Beyond HospitalsIE Beyond Hospitals

Simulation of smallpox or bird flu spread (CDC)

Emergency services planning

Medical decision makingg

Risk-benefit analysis of alternate treatments

Statistical surveillance of infectious diseasesStatistical surveillance of infectious diseases

Regional capacity planning models

D l b li d ti (h f t )Drug labeling and error prevention (human factors)


Possible Career PathsPossible Career Paths

Hospitals and Health Systems− Management engineering (IE) departmentManagement engineering (IE) department− Quality, process improvement department

Non-hospitalsHMO’ di l ti i th− HMO’s, medical practices, senior care, others

− Government, regulatory agencies, other

Industry− Biomedical− Pharmaceutical

Graduate school

It starts with your It starts with your initial project initial project

opportunities and opportunities and

It starts with your It starts with your initial project initial project

opportunities and opportunities and Graduate school− IE/OR with healthcare emphasis − Healthcare degrees (MPH, MHA, etc)

ppppchoiceschoices

ppppchoiceschoices


Future of HealthcareFuture of HealthcareFuture of HealthcareFuture of Healthcare


FutureFuture

The future will be led by the needs and wants of the patient – trends include:

Changing health of the community

the patient trends include:

The exchange of information − Patient information

H it l f− Hospital performance− Physician performance

P t f f f / tPayment reform - pay for performance/outcomes as opposed to pay for service

Healthcare reform and regulations


Healthcare reform and regulations

ResourcesResourcesResourcesResources


Society For Health Systems (SHS)Society For Health Systems (SHS)

The leading professional organization for analysis and improvement of healthcare processes.and improvement of healthcare processes.

• Largest and most active society within IIE• Education• Resources• National initiatives• Partnerships with other organizations• 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

Further Information / Next StepsFurther Information / Next Steps

Society for Health Systems, SHS (www.shsweb.org)Co op jobs Internships Job bank- Co-op jobs, Internships, Job bank

- Student webpage, Mentoring- Annual conference- Paper competitions, Senior projects

Local hospitalsOther organizationsOther 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”

LinkedIn GroupsLinkedIn Groups

LinkedIn has developed a strong professional network and can be leveraged to expand your knowledge and network;

Society for Health Systems

g p y g ;suggested groups include:

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])


Professional SocietiesProfessional Societies

• Institute of Industrial Engineers, Society for Health Systems

H lth M t d I f ti S t S i t• Healthcare Management and Information Systems Society

- ME/PI Community

• Healthcare Financial Management AssociationHealthcare Financial Management Association

• American Society for Quality, Healthcare Division

• Others

WHY???• Networking with peers

Membership and Membership and networking is vital networking is vital Membership and Membership and

networking is vital networking is vital • Networking with peers

• Professional growth and mentoring

• Do not recreate the wheel

part of your part of your professional growth professional growth

and successand success

part of your part of your professional growth professional growth

and successand success


and successand successand successand success

Some ReferencesSome References

Sahney VK. Evolution of hospital industrial engineering: from scientific management to total quality management Journal of the Society of Healthmanagement 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 y g g pEngineering, 1959; 10:171-175.

Flagle CD, Young JP. Applications of operations research and industrial i i t bl f h it l J l f I d t i l E i iengineering to problems of hospitals. Journal of Industrial Engineering,

1966; 17:609-614.

Fries BE Bibliography of operations research in health-care systemsFries 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.

Hospital DefinitionsHospital 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.

Ad i i Th # f i ti t h d itt d t th h it lAdmissions - The # of inpatients who are admitted to the hospital.

Discharges - The # of inpatients that are released from the hospital.

A D il C (ADC) Th b f i ti t i thAverage 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.g y y p y p

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

Definitions Definitions -- Payer CategoriesPayer 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 whoMedicaid 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

“ it t d” “ b th”“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.I d it P id id f f i b i


− Indemnity - Providers are paid on a fee-for-service basis.− Self-Pay - Patient pays all out-of-pocket expenses.

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