Arnold Palmer Hospital: Managing Operations - Essay Example

?Arnold Palmer Hospital: Managing Operations Introduction Managing the quality of service is always a challenge among hospital or health care organizations as traditional and prevailing practices often impede or threaten adoption of new or untested systems that may prove to be worthwhile. The management background of Arnold Palmer Hospital provides a refreshing take on the issue. Its Executive Director Kathy Swanson’s improved system about achieving quality health care is beyond question as she was able to implement various techniques to determine problems as well as how to solve them. Empowering the work force towards achievement of goals is employed by Swanson aside from directly being in contact with customers or patients. However, quality health care is not only achievable through management approach but also on processes and supply chain of which guaranteed if not availability of quality health care products and services are provided to customers. This paper will try to determine the approach in managing the quality of services, processes and supply chain from both a strategic and tactical viewpoint of Arnold Palmer Hospital in consideration of their existing practices. Approaches in Managing Quality Services Quality service amongst health providers is of paramount importance. In fact, health care providers across the world have been exerting efforts to improve their operations and management in order to meet their patients’ expectation and satisfaction. In the first place, it is important to give proper attention to their patients’ assessment because healthcare organizations exist due to patients. In the health sector, quality is practically referred to the totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs (American Society for Quality, cited in Heizer & Render, 2008). Arnold Palmer Hospital The Arnold Palmer Hospital, one of the most important hospitals in the United States which provide health care services to both women and children, is one of these many health care providers that immediately implemented approaches in managing quality services. The underlying reasons of the organization in improving their services are to; increase quality and efficiency, raise patients’ satisfaction, protect their company reputation, improve their ability to compete, reduce exposure to liability, and reduce risks and cost (Institute of Medicine, 2001). Quality Management Approaches In order for Arnold Palmer Hospital to meet these goals, it is important to employ the quality management approaches that include the following: continuous quality improvement, employment empowerment; benchmarking; Just-in-time (JIT); and total quality management (TQM) tools (Heizer & Render, 2008). Continuous quality improvement: When an organization wants to improve on quality it may tend to increase costs; however, with the right quality improvement approach these organizations are able to improve quality while maintaining low costs. The continuous quality improvement is an approach that was already employed by Arnold Palmer Hospital in order to undertake their operational changes such what needs to be improved and what methods/strategy is available to assess the improvements. In addition, to implement change, the APH management has involved all the staff from the highest position down to the lowest position to work as a team. The management emphasized that quality service is everyone’s responsibility; hence every employees are given extensive orientation on quality, patients’ satisfaction, and their role in continuous improvement. To improve their operations such admissions, inventory, food service delivery, billing, vacated room turnaround time, the APH may need to adopt the Kaizen and Six Sigma model. The Kaizen is a Japanese term for continual improvement which is also referred to PDCA, Shewart or Deming Cycle. The model is comprised of 4 steps: Plan – design or revise business process components to improve results; Do – implement the plan and measure its performance; Check – assess the measurements and report the results to decision makers; and Act – decide on changes needed to improve the process (see Figure a). Figure (a): Kaizen cycle (Source: Heizer & Render, 2008) Meanwhile, the Six Sigma system may be utilized by APH in the implementation of quality improvement because it could reduce or eliminate defects to 3.4 defects per million operations. It was originally developed by Motorola which consists of five steps, also referred to as DMAIC approach. In APH, the Six Sigma (see Figure b) was utilized to perform the following: Define their patients’ needs and satisfactions; Measure their work and collect process data; Analyze the data to determine improvements to be made; Improve the process by implementing the improvements that have been determined; Control the new process to maintain quality performance Figure (b): Six Sigma Model (Source: Heizer & Render, 2008) Employee Empowerment: The employees are considered as the most important component in implementing changes because they are the ones who will perform and carry out the activities and plans for quality services. In the case of Arnold Palmer Hospital, they can achieve the full commitment and cooperation of their staff through implementing various empowerment techniques. These techniques includes: building communication networks with the employees; developing open and supportive supervisors; allowing employees to make decisions; building a high morale organization; creating formal team structures and quality circles (Heizer & Render, 2008). Furthermore, the Arnold Palmer Hospital management should also train their employees in planning, problem solving, and in conducting statistical methods. Benchmarking: In order for APH management to provide standard performance with their patients, they have formed their own benchmark team. The team is responsible in determining what services or operation needs to be measured or standardized. From the patient feedbacks and satisfaction surveys, the team would recommend actions to improve their services. For example, in order for the APH to improve their customers’ complaint services, the organization recruits and trains their customer service staff, make complaints easy, responds immediately, and use computers to manage complaints. In addition, to improve their general operation and procedures, the APH has also utilized the most advance technologies (registration, billing, surgery, etc) as well as offering prevention and wellness services to their customers (Heizer & Render, 2008). Just-in-time: The APH has also incorporated JIT in their management operation for the following reasons: to reduce costs, to maintain control of their inventory, to eliminate waste, and avoid massive storage. Since APH ordered/purchased their medical supplies in bulk, open pack errors will most likely to occur. In case this happens, the JIT inventory system of the hospital would allow them to return the pack to the supplier within one-day after informing and identifying them the reasons of errors. It also allows them to purchase what are only the required and necessary supplies. JIT also improve their purchase scheduling wherein they only ordered when it is necessary or indispensable. The JIT system of the APH also allowed them to improve the design and lay-out of their supply storage to minimize inventory time and maximize space. Further, the JIT system of the hospital also improves their purchasing system (either medical packs or medical instruments) because every proposal will be evaluated by their Medical-Economic Department before purchasing (Toyota Production System, 1989) TQM tools: There are various TQM tools which are cauterized according to their specific purpose. These include tools for generating ideas such as check sheets, scatter diagram, and cause-and effect diagram; tools to organize data which include Pareto charts and flowcharts; and tools for identifying problems like histogram and statistical process control chart. These tools are utilized by APH in their operations i.e. admissions, inventory, billing, food service delivery, scheduling, inspection, appointments, vacated room turnaround time and among others. The hospital used these tools in order to obtain information of what’s really happening in the organization and to enable them to assess and recommend techniques for improvement. For the purpose of better understanding, the TQM tools are described as follows: Check Sheet: Is an organized method of recording data. Scatter Diagram: Is a graph which exhibits the value or correlation of one variable from the other variable. Cause-and-Effect Diagram: Is a tool that identifies process elements (causes) that might effect an outcome. The causes could include the people/manpower, materials, methods, machinery, or any involved that cause or becomes a reason for certain variation in the operation. It is also referred to as Ishikawa or fishbone diagram. Pareto Chart: Is a graph that both exhibits bar and line graph to identify and plot problems or defects in descending order of frequency. Flowchart (Process Diagram): Is a chart that describes the ordered steps in a process connected by arrows. Since it exhibits sequenced steps in resolving problems, it is widely utilized in analyzing, designing, documenting or managing process. Histogram: Is a graphical representation of a distribution showing the frequency of occurrences of a variable. Statistical Process Control Chart: Is a chart with time on the horizontal axis to plot values of a statistic. The statistics signals when special causes of variation the effects adversely in the process, likewise the control chart determined when to take corrective actions. It is commonly used to drive process improvement which composed of four key steps: measure the process; find assignable/special cause when change is indicated, eliminate or incorporate the cause, and restart the revised process: Critic on the Arnold Palmer Hospital’s Supply Chain Arnold Palmer Hospital is one of the leading hospitals for women and children in the United States which has long been a member of national group purchasing organization (GPO). However, due to its several limitations, the APH may opt to change and develop a new supply chain strategy. Along with seven other hospitals in Florida, they can form and found their own, smaller purchasing group such as Healthcare Purchasing Alliance (HPA). Generally, the new supply chain strategy is aimed to cut their cost wherein APH is possible to save up to 7% which estimated to be about $ 7M from their $100 M purchases budget. Specifically, the new innovation should be implemented in order to allow their medical doctors to choose their brand choices for certain surgical implants and to address the various limitations of GPO such supplies brand changes every delivery (HPA, 2011). The APH should drop GPO for results such as: radiology and laboratory supplies differ in rooms; pharmaceuticals may change when a patient visits the hospital again; medical devices can be different or it will be necessary to throw away old devices to make all the devices the same, and doctors may not be familiar with the surgical supplies. When the new supply chain strategy is implemented, several changes should take place such as: Many suppliers strategy is changed to few suppliers’ strategy; Long-term contract with suppliers; and Few suppliers’ strategy is applied so especial are developed for APH. The new long-term few suppliers strategy of the APH yield several improvements in the supply chain management. The expected results are: Product Standardization: The medical supplies and equipments will all be the same because it is single point contract. The APH doctors and healthcare personnel become familiar with their equipments because they no longer confused with new equipment. The personnel will become more efficient errors are decreased due to confusion. In addition, supplies are established and patients’ confusion is prevented and doubts about different drugs and equipments are removed. Save cost from contracting efforts generated, training and education of employees due to new equipments and medical supplies, reduce transportation cost; reduce distribution fees; Established better deal and partnership with the vendors/suppliers due to long term business and trust. Customized products become possible as result supplier collaboration for new product development. Incentives such freight, early-pay discounts, rebate, etc. Allows bulk buy opportunities at lower price (HPA, 2011). New Approaches for Arnold Palmer Hospital In order to achieve a more comprehensive and effective approach in management of the Arnold Palmer Hospital, the following are proposed for adoption: Physicians as partners: Strengthen the engagement of the doctors in the materials management program of the organization. Establish a group of doctors who will study and recommend standard utilization and device practices based on industry innovations, standards, as well as experience. The social movement of physicians and professionals will enable them to gain insights in the updates about innovations, new practices, and best practices. These gained insights can be valuable for APH in its management, supply chain, and strategic approach (Wilson, Dowling, Abdolell and Tannock, 2000). Recruit Service Representatives who will be responsible for assigning vendors, setting deliveries, daily monitoring of purchase and inventory activities and to look over for the utilization of volumetric data to maximize pallet-order size. Physicians expect the service representatives to provide drug information prior to promoting the product, provide and support physicians to promote appropriate as well as rational use of the product, as well as comply with the committee’s decisions (Santell, Birdwell & Scheckelhoff, 1990). Utilization of a Demand Forecasting tool: It is an accurate forecast management software tool which is utilized in warehouse management, demand and inventory planning. This tool enables the organization to: manage inventory to prevent backorders increase fill-rates decrease cash reserve use analyze of stock items capture data at item level and by facility captures seasonality and trending allows quick view of graph of what is available or ordered/allocated to mange budget enables the availability of customized reporting capabilities and allowed organization to validate patterns and other data Decrease in returns related to expirations (Armstrong and Green, 2005). Through application of the demand forecasting tool, possible running out of supplies as well as services may be avoided as there is already in place available options or supplies ready for the clients to use. Integration of Value Chain Management: In health sector, the value chain management is of paramount important because of its numerous benefits in controlling the hospital management in general. Aside from that fact that it significantly improves services, it also improve the performance of the APH, allows the use of cost efficiently, shorten health care processes, as well as allow efficient use of medical facilities and human resources. The value chain management is widely utilized in management strategies because it has the ability to visualize the connections/links and contributions of the different sectors/levels of the organization towards achieving their vision and missions. The strong point of this type of management approach is it can mapped-out the important factors that could contribute to the overall success of the health care facility such as the stakeholders’ expectations, core processes, support processes, products, channels and client definitions. In order to obtain better result, it is best to combine it with various sub-approaches such as balanced scorecard, health care processes and analysis report. The value chain would be established by the hospital’s Board of Directors to gain an overview of the said contributing factors in order to obtain end results through synchronizing them. The results will then be measured through the use of balanced scorecard to obtain the extent to which the goals are realized. Likewise, the incorporation of the health care processes would help the organization to accumulate information in order to integrate strategies such for faster treatment, improving flow of patients to reduce waiting time, and for improving health care demand and supply connections. In addition, through organized health care processes, it would enable the organization to customized practices such implementation of general treatment protocols, guidelines, laws and regulations, and work instructions. In the same end, all the implemented actions and measured performance should be continuously analyzed and monitored from time to time in order to implement adjustments and risk mitigations to avoid loopholes and miscalculations (de Vrij & van de Haar, n.d). Integration of Sustainable Bio-Medical Waste management: Since almost all waste from hospitals are categorized as hazardous waste which include antibiotics, cytotoxics, corrosive chemicals, radioactive substances, its disposal should be appropriately manage in order to avoid dangers amongst the staff, patients, general public and in the environment. In big hospitals such APH, it is recommended that they must adopt scientific waste management in order to achieve the following benefits: cleaner and healthier surroundings; reduction in the incidence of hospital acquired and general infections; reduction in the cost of infection control within the hospital; reduction in the possibility of disease and death due to reuse and repackaging of infectious disposables; low incidence of community and occupational health hazards; reduction in the cost of waste management and generation of revenue through appropriate treatment and disposal of waste; improved image of the healthcare establishment and increase the quality of life. To effectively implement this scientific waste management, all the hospital staffs should be involved and aware of the management program through efficient information dissemination as well as providing various training, workshops and seminars. Color codes for the segregation of waste should be encouraged in the hospital such: Yellow for infectious waste, like anatomical, pathological, soiled dressings like gauze, cotton, linen, etc. contaminated with blood or other body fluids; Red for infected plastics like IV sets, tubing, catheters micro-biological waste etc. stainless steel or translucent puncture proof container for metal sharps; Blue for glass; Black for cytototoxic drugs, incinerator ash, chemical waste and expired medicines; White for all sorts of non-infected general waste which are dry and recyclable; and Green for collecting and transporting of food waste from wards, canteens and dining halls. The purpose of color code is to make the collection easier wherein similar colored are collected at once. The hospital should have designated temporary storage of waste and the collection per department should be scheduled alternately. One purpose of this is to trace which department is not properly following waste segregation as per the rules. In addition, the responsible for the collection and segregation of waste should record the quantity of waste collected in order to study and analyze on how to minimize them (Sharma & Mahajan, n.d). APH, as one the largest and busiest health care in US is also one of the organization with the best management approaches. The APH is guided by their goal to provide 100% patient satisfaction at all times. This means a need to continuously assess, monitor, and implement changes if necessary in order to meet their boundary line. The APH has combined various management approaches in order to ensure that they provide quality services and performance to their patients. One of the tools that the hospital uses consistently is the Kaizen Approach and Six Sigma Model. Both this approaches are utilized for their continuous quality improvement program with the purpose to improve their operations such speed up admissions, inventory, food service delivery, billing, and turnaround time of vacated room. The underlying reason of the APH for integrating use of these tools in their management is because it enables them to plan, implement, evaluate, and assess a particular operation/facility with lesser defects or mistakes (Heizer & Render, 2008). Meanwhile, it is a good move for the APH to empower and involve their employees in all their management plans. This is a manifestation that the organization believes and trusts the ability of their employees, i.e., in decision-making, planning and problem solving. In the same manner, benchmarking their quality and performance is also a manifestation that the organizations is confident enough about their provided services and are open to more opportunities even if it means abrupt changes in operations and processes in case the situation calls for it. Furthermore, the JIT system of the APH is also of advantage for them because it is efficiently managed as evidenced by their reduced costs, controlled inventory, reduced waste and decreased massive storage of medical packs or medical instruments (Toyota Production System, 1989). The APH has also utilized various TQM tools in order to record data and graph the changes that occur within the organization upon implementation of plans or strategies. The graphs and charts are used to analyze which particular area or operation has improved or which needs improvement. In general, the management approaches of APH are suitable and applicable because it continuously benefit them as well as provide their patients with quality care and services. Conclusion Application of the various approaches in managing Arnold Palmer Hospital’s quality of services, processes and supply chain from both a strategic and tactical viewpoint may be difficult at some time. The presence of available options that could be patterned by APH streamlines possible management, process and supply chain loopholes making the adoption more efficient and cost-effective. However, the proper attitude and motivation as well as sufficient change and adoption resources are needed in order to effect these proposed changes. In the adoption of new strategies, new approaches always meant readjustment of the staff and management attitude and opening their senses to change which could prove a challenge. In addition, resources will be taken into consideration. New equipment, technologies, and skills must be introduced to the management, staff, and even addition of more manager positions and staff that could meet goals for the change. If all these could be achieved, it can result to quality health care services and total patients’ satisfaction. References: Armstrong, J.S; Green, K.C. (2005) "Demand Forecasting: Evidence-based Methods". In: Luiz Moutinho and Geoff Southern (Eds) Strategic Marketing M.anagement: A Business Process Approach. De Vrij & van de Haar,( n.d). “Hospital Management System – Our approach to gain comprehensive control.” PDF accessed from: http://www.visionwaves.com/CmsData/Documents/Articles/Article%20Hospital%20Management%20Solution.pdf Heizer, J. & Render, B. (2008). Principles of Operations Management. 7th ed. New Jersey, Pearson Prentice Hall. Heizer, J. & Render, B. (2011). Operations Management. 10th ed. New Jersey, Pearson Prentice Hall. Healthcare Purchasing Alliance, Inc. (2011). About. 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