Operational Management in Health & Social Care - Essay Example

Operational Management in Health & Social Care Executive Summary Since its adoption by Toyota in the 1990s, the concept of lean management has evolved to become a powerful management tool in manufacturing and service organisations alike, including the healthcare industry. The healthcare in the West has particularly embraced lean management. However, the same cannot be said of Hong Kong where the concept is virtually non-existent in the healthcare system. Based on the lessons learned from two American cases and one Hong Kong case, this report recommends the adoption of lean management by a Hong Kong hospital. Operational Management in Health & Social Care Part 1: Short Notes Question 1.1 Root cause analysis (RCA) is one of the management tools the ward manager may use to investigate the cause of medication errors in the ward. RCA is a tool for problem-solving used to diagnose the root causes of a problem or error (Wilson, et al., 1993). A factor qualifies as a root cause if its removal from the problem sequence stops the undesirable outcome from occurring again. However, the manager must distinguish between a root cause and a causal factor; the latter affects the outcome of an event, but does not cause it. Although the removal of a causal factor may lead to the desired outcome, it does not prevent the problem from recurring with certainty. The ward manager should recognize that RCA is an iterative rather than a linear tool, involving movement back and forth in the process of applying it (Shaqdan, et al., 2014). RCA is also a tool for continuous improvement as opposed to one that is applied on a once-off basis. RCA is governed by a number of principles, one of them being that the tool is applied systematically as a part of an investigation in which the root causes must be backed up by documented evidence. The ward manager will most likely need team effort to accomplish the investigation. An RCA can be conducted in a seven-step process: the manager identifies the event to be investigated and collects preliminary data; the manager constitutes a team to conduct the RCA; the team describes the event being investigated; contributing factors are identified; root causes are identified; changes to eliminate the root causes are designed and implemented and finally, the success of changes is measured. The manager will know the corrective action was effective by collecting data to prove that medical errors have either reduced or been eliminated. The manager should also take cognizance of the weaknesses of RCA, one of them being that even though the tool is widely used to improve patient safety, there is little data to support its effectiveness. Question 1.2 One of the advantages of the current scenario is convenience for the patient as they simply have to patronize the nearest hospital (Cervantes, et al., n.d.). Otherwise, if there were a referral system, some patients would be disadvantaged as they would have to travel longer distances to access the referral hospital. An advantage to the four-hospital referral system is the fairly even distribution of patients among them such that none suffers congestion. However, the even distribution is possible only if the hospitals cooperate among themselves such that one hospital whose resources are overwhelmed can direct patients to another hospital. The main disadvantage of the current situation is the duplication of efforts hence under-utilization of resources. If only one of the four hospitals took care of the elderly, the other three would free their resources to be used to provide care to other types of patients. One cost-effective way of redesigning the health care system in the area is to have three of the hospitals provide basic care to the elderly and make the fourth one a referral hospital for advanced care for the elderly (Cervantes, et al., n.d.). This arrangement will save the Health Authority the longer term costs of building a referral facility for the elderly from the scratch. Meanwhile, patients will incur fewer costs to access care, assuming that most cases will be handled at the primary care facilities. Part 2: Report Question 2.2 Lean Thinking and Its Application to Healthcare Management Introduction Despite its wide application in the West, the adoption of lean management by the Hong Kong health care system is almost lacking (Chan , et al., 2014). This report recommends lean management for a Hong Kong hospital based on the lessons learned from the cases of two American hospitals. The concept of “lean thinking” or “lean management” is often associated with Japanese manufacturing (Institute for Health Improvement (IHI), 2005). In particular, the concept is associated with the Toyota Production System (TPS). TPS way of thinking is largely influenced by the thinking of Edwards Deming, the quality guru who taught, among other thoughts, that managers should stop their reliance on mass inspection as a way of achieving quality and instead embed quality in the production process and the product in the first instance. Essentially, “lean” means doing more with less by eliminating or at least limiting the waste of time and resources (Womack & Jones, 2003). Lean thinking is a management strategy that applies to all organizations, including health care organizations, because the concept has to do with the improvement of processes. Every organization has in place a series of processes intended to create value for its customers. The central idea in lean thinking is to scrutinize an organization’s processes with the aim of discerning between the processes that add value to the customer and those that do not and are, therefore, wasteful. If rigorously applied throughout the organization, lean principles have been found to dramatically reduce waste and cost and increase productivity and quality. At the mention, lean thinking is often associated with manufacturing business organizations, not health care where the wastage of time, supplies and money are rampant (López-Fresno, 2012). However, the principles of lean thinking can work in health care just as they do in manufacturing; this paper demonstrates how by analysing two healthcare organizations that successfully applied lean management to reduce cost and wastage and improve service delivery. The analysis is preceded by an overview of the key concepts of lean management. Finally, the author makes a number of recommendations for lean management in their place of work, a healthcare facility. Key Concepts in Lean Thinking Leadership:According to the organizations that have applied it, lean management is not for the faint-hearted (Rother, et al., 2003). It cannot be done piecemeal; it has to be applied to the whole organization. Neither is it a quick-fix solution to organizational problems; it is long term. Lean thinking cannot be applied only by supervisors or middle managers; the top management must be involved. The CEO must be vocal and passionate about lean management. They must be prepared to make room for “leaps of faith” and room for failure. The CEO must then have the full support of their managers at all levels of the organization. Culture:The application of lean techniques calls for a lean culture. When people behave according to those values and beliefs and get the results expected of them, the values and beliefs are reinforced. The cycle of reinforcement creates culture (Byrne & Fiume, 2005). The table below differentiates between conventional and lean cultures. Table 1: Conventional vs. Lean Culture Conventional Culture Lean Culture Individual effort Teamwork Managers direct Managers enable Blame people Root cause analysis Reward individuals Reward team effort Supplier is enemy Supplier is ally Guard information Share information Use volumes to lower costs Reduce cost by eliminating waste Internal focus Customer focus Expert driven Process driven Source: Adopted from Byrne and Fiume, 2005 A leader who desires to bring about a culture change in their organization cannot do so by issuing directives or circulars; they must lead by example and a behave in a manner that will inspire staff to do likewise, while allowing them to experience better results (Fiume & Cunningham, 2003). However, the leader must be warned that one of the main challenges of introducing culture and effecting lean management in healthcare is that it requires health professionals to identify waste in their work. Most, if not all, workers believe that their work is good and valuable. To require them to recognize that certain aspects of their work are wasteful and do not add value to the customer can be difficult. For instance, the nurse who runs up and down the corridors of the hospital in search of medical supplies does so because they want to serve the client. For such a nurse, they may not realize that by running all over the place in search of supplies, they are wasting time. It would be better if supplies were readily available to the nurse so that the nurse will not chase after them and instead spend that time with the patient, for instance. Managers must help staff to appreciate lean thinking by providing a clear vision statement that guides staff in making choices in their daily work. Process: A process is a series of actions that must be done properly and in the right sequence in order to create and deliver value to the customer(Spear, 2004). In healthcare, primary processes are designed to serve patients and their families. Internal processes serve the staff and support the primary processes. Though not as visible as the primary processes, internal processes facilitate the creation of value for the customer. Real Life Applications of Lean Thinking to Healthcare An Internet search conducted for the purpose of this paper revealed that the American health care system has embraced lean management more than any other. As for Hong Kong, documented empirical evidence of lean thinking in health care is scanty(Chan , et al., 2014). The search yielded only one empirical study of real life application of lean thinking in the emergency department of an anonymous health facility. This situation makes it impossible to present this report in a purely Hong Kong setting. Consequently, two American cases and the one from Hong Kong are analysed. Given, the universality of the principles of lean thinking, the author believes that the lessons learned from the two American cases can be replicated in a Hong Kong hospital setting. Case Study 1: Virginia Mason Medical Centre Seattle-based Virginia Mason Medical Centre is an integrated healthcare provider comprising a hospital with a bed capacity of 336, 9 locations, 400 physicians and 5000 employees as of 2005. In 2000, in the wake of an economic downturn and a general lethargy in the organization’s culture, the Board of Directors initiated wide-sweeping changes (Kim, et al., 2006). The Board adopted the new strategic plan shown below. Figure 1: The Virginia Mason Medical Centre Strategic Plan Source: IHI, 2005 The plan pushed for, among other aspirations, a sharper business focus and greater accountability (Association of American Medical Schools (AAMS), 2010). At the top of the pyramid lies the organizations primary customer, the patient. Four pillars support the patient equally: people (the organization aims to hire and retain the best health workers available), quality (the organization is committed to the highest quality of care possible), "extraordinary patient service" and a culture of innovation. Virginia Mason aims to design its production system and its processes around the needs of the patient as opposed to the needs of staff and service providers (Kenney, 2011). Virginia Mission’s new strategic plan was adopted in late 2001. Following its adoption, the Board proceeded to define roles, accountabilities and expectations more explicitly, an important step in creating a lean environment. The Board created “compacts” for itself, managers, physicians and all the other employees. The compacts spelled out roles and responsibilities of each member of the organization as well as what they could expect from Virginia Mission. In order to get its senior executives on board the lean and wagon, in 2002, Mason took them all to Toyota’s Hitachi Air conditioning plant so they could see for themselves how lean management works. The executives observed and took notes on workflow, recorded process flow and measured cycle times. They concluded that healthcare shares many processes and concepts with the production of goods. Like healthcare, Japanese manufacturing processes are also concerned with such concepts as safety, quality, staff and customer satisfaction and cost reduction. For a product or service to be completed, it goes through hundreds or even thousands of processes, some of which can be quite complex. In both cases, product failure can result in fatalities. Following the benchmarking trip, Virginia Masons senior executives developed the Virginia Mason Production System (VMPS), modelled after the Toyota Production System (TPS). The rationale behind VMPS is to achieve ever increasing improvement without adding resources – staff, money, space, inventory and equipment. For this goal to be realized, there must be zero waste. VMPS has six focus areas: (a) "Patient First", driving all other processes, (b) the creation of an enabling environment that fosters creativity and continuous improvement, including the policy of not laying off staff, (c) the “The Patient Safety Alert System” in case of a defect, (d) promotion of innovation and “trystorming”, a higher and more spontaneous form of brainstorming, (e) enhancing profitability by eliminating waste and (f) accountable leadership. Two components of the VMPS are particularly important to the success of lean management: the No-Layoff Policy and the defect alert system (Institute for Health Improvement (IHI), 2005). People will be more motivated to improve their job performance if they are assured of having their job tomorrow. An alternative to lay-offs is staff attrition – the reassigning of staff to areas of the organization where their work is needed more. In order to be effective, the no lay-off policy should be accompanied with a culture change in the area of staffing as well: in most healthcare setting, staff often see themselves as working for their department or care team, not the organization. In lean thinking, the customer (or patient) drives all processes. It is, therefore, necessary that staff start viewing themselves as working for the patient. In the TPS, the system for alerting members of the organization in the event of a defect in the production system is known as “stopping the line”. The rationale behind the component is that errors may be inevitable, but are reversible (Jimmerson, et al., 2005). The adoption and implementation of lean management at Virginia Mason, the organization has made gains in profits, efficiency and clinical processes (Institute for Health Improvement (IHI), 2005). The introduction of lean management at Virginia Mason set the stage for the introduction of the “ventilator bundle”, a specific series of steps known to reduce the incidence of “ventilator-associated pneumonia” (VAP). In 2002, Virginia Mason had 34 reported cases of VAP that cost the organization about $500,000. In 2004, following the implementation of the ventilator bundle, VAP cases dropped to only four, costing the organization approximately $60, 0000. Despite the successes, the implementation of lean management at Virginia Mason has not been without challenges. The process demands considerable focus and consistent commitment. Case Study 2: ThedaCare Inc. ThedaCare Inc. is a Wisconsin-based healthcare provider with three hospitals, 27 clinics and a health plan with 300,000 members. ThedaCare Inc. is recognized nationally for its quality care and also has reputation for being one of the most computer-savvy healthcare organizations (Institute for Health Improvement (IHI), 2005). As of 2005, the hospital employed 5,000 people, making it the second largest employer in the state. ThedaCare Inc.’s journey to lean thinking is very much similar to that of Virginia Mason, except that the former’s senior executives did not have to travel to Japan to experience the TPS first-hand. Instead, they opted for the nearby Ariens OutdoorPower Equipment Company, a Wisconsin-based company that has successfully applied lean management for years. ThedaCare’s Board of Directors set lofty, but specific goals to stir a culture change in the organization: (a) provide world-class healthcare, (b) become the preferred healthcare employer and make it to the Fortune 100 list of employers of choice and (c) lower the costs of providing care and pass the benefits to their customers in the form of reduced prices (Institute for Health Improvement (IHI), 2005). The figure below shows these goals. Figure 2: ThedaCare’s Lean Goals and Metrics Source: IHI, 2005 The customer is at the centre of ThedaCare’s goals. The new culture at ThedaCare that binds leaders and staff alike, is that of continuous improvement and relies on the organization’s most important asset: staff brain power. Improvement is underpinned by the ThedaCare Improvement System that comprises three tenets of change: respect for people, teaching and learning through experience and the pursuit of world-class performance. The system was informed by the recognition that staff waste a great deal of time on “fire-fighting” activities that do not add value to the customer and that putting in place processes that work free up staff time that can then be expended on improving patient care (Fine , et al., 2009). Though more complicated than Virginia Mason, ThedaCare’s lean efforts have born some fruits, most of them financial (Institute for Health Improvement (IHI), 2005). For instance, through the implementation of lean management, the organization saved $ 3.3 million in 2004. The organization saved a further $154,000 in lab supplies procurement processes. Non-financial gains included improvement in physician phone triage, reducing the average wait time to 58 seconds down from the previous 89 seconds, representing a 35% improvement. Meanwhile, the rate of physician phone triage abandonment fell from 11.6 to 6%. The time a patient takes to complete paperwork dropped by 50%. Overall, the ThedaCare ripped more benefits from the implementation of lean management than Virginia Mason, with no major challenges reported. Case Study 3: ED of a Hong Kong Hospital A 2014 study sought to evaluate the existing patient flow in the ED of the hospital, identify and eliminate processes that did not add value to the customer and improve the existing situation(Chan , et al., 2014). The study found that among all the ED processes, blood tests consumed the most time (52.73 minutes per patient on average), followed by the wait for an admission bed at 38.24 minutes. The researchers concluded that lean management has the potential to improve patient flow in the ED, hence the need for health institutions to embrace the tool(Chan , et al., 2014). Lessons Learned From the two case studies, we learn that the introduction and sustained implementation of lean thinking is a daunting task(Chassin, et al., 1986). In order for an organization to succeed in lean management, a number of conditions must obtain(Adamson & Kwolek, 2008): Leadership: Successful lean management cannot be left to supervisors, middle managers or any other level of management alone; the top leadership of the organization must lead from the front. Otherwise, chances of the initiative succeeding are slim. Culture change: Lean management calls for an organization-wide culture change; people must change the way they perceive things. Among other things, the organization must cease to be inward-focusing and start focusing outwardly on the customer. Again, the top leadership must lead the change by example, not edicts. Processes: Lean management demands that the organization scrutinizes its processes with the aim of eliminating those processes that add no value to the customer(Ben-Tovim, et al., 2007). In so doing, however, the organization must distinguish between primary and internal processes and be aware of the latent role of the latter. These are processes that create value to the customer indirectly by supporting staff. Benchmarking: While lean thinking originated in Japan, today lean practices are well-entrenched in organizations around the world. Getting the senior executives of the organization to see for themselves how another organization has successfully implemented lean management can go a long way into motivating the executives to champion the same in their organization. Customer-driven strategic plan: This is an effective tool for operationalizing the customer-focused culture change(Institute for Health Improvement (IHI), 2005). Recommendations Based on the lean management lessons learned from the cases of Virginia Mason and ThedaCare, I hereby recommend the following procedure for the introduction and introduction of lean thinking in my organization. It is useful to note that the process is more iterative than linear(Adamson & Kwolek, 2008). The preparation and adoption of a strategic plan: Lean thinking requires that an organization shifts its focus from its internal affairs such as staff and focus on the customer(Adamson & Kwolek, 2008). A strategic plan, as seen from the case of Virginia Mason, will be a good starting point. The strategic plan should state expressly that from now henceforth, the organization will reorganize its operations to sustain the requirements of the patient as opposed to its internal needs. The Board of Directors will be charged with this duty within six months of adopting these recommendations, although the senior executives will draft the plan. Once adopted, the plan will be communicated to all the members of the organization and copies of it posted throughout the organization in visible locations. The strategic plan will guide the organization for the next five years and will be reviewed yearly to accommodate any changes that may arise. The constitution of a team comprising top-level managers: As noted from the two case studies, the effective implementation of lean management calls for the active involvement of the organization’s leaders (Institute for Health Improvement (IHI), 2005). The purpose of this team that will be set up by the CEO with approval of the Board, will be to steer the implementation of lean thinking in the organization. Among other things, the team will champion culture change. The CEO will chair the team. The team will be established immediately following the adoption of the strategic plan and will last for the duration of the plan – five years. The signing of “compacts” by all members of the organization: As learned from the case of Virginia Mason, “compacts’ are an effective way of getting every member of the organization to continually improve their work with the view of meeting the needs of the patient. The Board will prepare a compact for every member. It will stipulate the member’s roles and responsibilities and the reward they can expect from the organization. The compact will be reviewed every year. Identification of key processes: The team of managers will then embark on identifying the organization’s key processes – processes that support key products (MacLeod, et al., 2008). The organization’s key products (or services) include physician consultations, in-patient stay and emergency services. A person will be assigned to each key process; the person will be charged with examining the process in its totality and recommending ways of improving it. The leaders will delegate each process to a respected member of the organization. This will not be a full-time job; it is work that the person will do alongside their daily work. Neither does it require the person to supervise those performing the process. However, it will demand the attention of the person. Besides exploring ways of improving the process, the purpose of this exercise is to eliminate waste and duplication of effort. Process evaluation will last the duration of the plan. Benchmarking: The senior executives and other staff of Virginia Mason travelled to Japan on many occasions to learn about lean thinking from the TPS. Whereas it would be exciting for the managers and other staff of my organization to learn about lean management from Toyota, the mother of lean practices, they will not have to. There are a number of local organizations that have embraced lean management, from which my organization’s staff can learn without incurring high costs. 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