Improving Productivity In Health Care

229 Pages·1988·32.547 MB·\229

by  Jack H.U. Brown (Author), Jacqueline Comola (Author)

Improving
Productivity
in
Health Care
Authors
J. H. U. Brown, Ph.D.
Professor, University of Houston
Adjunct Professor, University of Texas Health Science Center
Houston, Texas
Jacqueline Comola, M.A.
Vice President
American Productivity Center
Houston, Texas
Boca Raton London New York
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PREFACE
The productivity of American industry lags far behind that of other countries. The other
industrialized nations including Japan, Sweden, Germany, and France, far outstrip the U.S.
by any measure of productivity. Unfortunately, the health care industry lags far behind the
industrial counterpart and its record of productivity is abysmal. A part of the problem lies
in the industry itself and a part lies in the definitions which are adopted for measures of
productivity. In terms of patient days, hospital beds built, increase in technology, and number
of patients handled the health care system is productive, but if the measures are costs for
value received, improvement in care for unit improvement in costs, and similar outcome
measures the record is very poor indeed. The health care system has costs or charges(?)
increasing at about twice the rate of inflation with no demonstrable increase in efficiency.
In fact, hospitals find an increase in productivity to be detrimental to keeping empty beds
full. In addition, most hospitals operate on a cost plus system which makes increases in cost
profitable. Nevertheless productivity can be improved in the health care system and that is
the thesis of this book.
In an attempt to treat the subject realistically we have divided the book into three parts.
Part I deals with an overview of the problem. The causes of low productivity are examined
and general problems are pointed out. Part III deals with practical solutions to productivity
problems in terms of case histories where productivity has actually been increased by training
or other steps. It is impossible to restructure the system at one fell swoop so each case deals
with a small part of the total problem. Part II presents some major ideas for improving
productivity including some now in the process of development like the Diagnostic Review
Group (DRG). Other ideas like National Health Insurance are far from being adopted by
this country so we have examined the impact in Canada. We have also presented some new
ideas in terms of where the system is likely to be some years from now.
At the moment there does not appear to be any way in which to control the physician
and the way he practices medicine, but as the number of physicians continues to increase
and pressure builds we are likely to see changes.
We make no apology for the amount of time spent on a discussion of management and
techniques of management. Management is what is needed in the industry and until admin-
istration begins to approach the problems of productivity with new management skills we
are unlikely to see much change.
THE AUTHORS
Dr. J. H. U. Brown, has been a researcher, teacher, and administrator in the health
professions for most of his life. After a period of teaching in medical schools (University
of Pittsburgh, Pennsylvania; University of North Carolina, Chapel Hill; and Emory Uni-
versity, Atlanta), he became Acting Director of the National Institute of General Medical
Sciences of the National Institutes of Health and Deputy Associate Admistrator of the Health
Services and Mental Health Administration dealing with the impact of technology on health
services and the development of new technology. During this period, he participated with
NASA in the development of the Linc-8 computer, launching of the ATS-6 technology
satellite, and in the development of the technology based communication and health delivery
system for the Indian Health Service.
Dr. Brown received his B.S. from Southwest Texas State University, San Marcos, where
he has been declared a Most Distinguished Alumnus, and his Ph.D. from Rutgers University,
New Brunswick, N.J., in biochemistry and physiology.
He was responsible for the development of the biomedical engineering research and training
program at NIH and was the founder and president of the Biomedical Engineering Society.
Dr. Brown has received many honors. He is a member of the national Academy of
Engineering, a Fellow of the IEEE and the AAAS, a Fulbright Scholar, and the holder of
several prestigious fellowships.
During the course of his career, Dr. Brown has published more than 120 papers and some
20 books in the area of medical research and health care delivery. He has invented several
devices for medical research.
Jacqueline Comola’s work improving organizational systems spans a decade of the
greatest technological, human, and economic change experienced by our national corpora-
tions. She began her professional career with the computer industry leader, IBM Corporation;
later directing the national marketing for a Dallas based computer manufacturing company.
Ms. Comola joined the public sector as Director of Training for a five-state government
agency where she established and administered an employee development and training
department.
Declining U.S. productivity and the potential of the human resource to contribute to the
reversal of that decline drew her to the U.S. Office of Personnel Management where she
joined the Consultant Services and Productivity Programs staff. She has written human
resource guidance programs for numerous local, state, and federal government agencies;
many of which have been adopted nationwide. She designed and conducted a 2-year na-
tionwide management development program for hospital administrators and the medical staff
of Indian Health Service, U.S. Public Health Service, Washington, D.C. Her work com-
missioned by the Panama Canal Company is published in two languages. Ms. Comola
teaches and has designed curricula for over 30 management courses. As an adjunct professor
for a Florida university, she developed and taught an advanced Ph.D. course in public sector
productivity management.
At the American Productivity Center, a Houston, Tex. nonprofit foundation, she serves
as Vice President and directs an action research project targeted at the productivity improve-
ment of the white collar workforce. Of America’s leading corporations, 54 are reporting
impressive results having implemented the white collar improvement process.
Ms. Comola received her B.A. in Political Science, her M.A. in Urban and Regional
Affairs, and has completed all course work for her Ph.D. in Organization Behavior from
the University of Texas at Arlington. More than 100 major organizations have benefited
from Ms. Comola’s consulting expertise. She has received numerous academic, professional,
and community leadership honors. She is a frequent conference speaker and has published
more than 30 professional papers and articles. This will be Ms. Comola’s first book.
TABLE OF CONTENTS
PART I: SOME GENERAL CONSIDERATIONS
Chapter 1
Productivity in Health Care — An Introduction ...........................................................3
I. Introduction..................................................................................................................3
II. The Hospital................................................................................................................3
III. The Physician..............................................................................................................5
IV. The Trustees................................................................................................................6
V. The Patient...................................................................................................................6
VI. Technology..................................................................................................................7
VII. Control of Productivity..............................................................................................9
VIII. An Overview.............................................................................................................10
Chapter 2
Productivity and the Economy ..........................................................................................11
I. Introduction................................................................................................................11
II. Counterproductivity...................................................................................................13
III. Policy and Productivity.............................................................................................13
Chapter 3
The Costs of Medical Care................................................................................................17
I. Introduction................................................................................................................17
II. The Hospital..............................................................................................................17
III. The Physician.............................................................................................................20
IV. The Surgeon..............................................................................................................20
V. Technology and Costs..............................................................................................20
VI. Some Solutions.........................................................................................................21
Chapter 4
Personnel and Productivity................................................................................................23
I. Introduction................................................................................................................23
II. Motivation.................................................................................................................24
III. The Manager..............................................................................................................25
IV. Control Systems........................................................................................................27
V. Group Theory.............................................................................................................28
VI. Unions........................................................................................................................31
VII. The Bureaucracy........................................................................................................32
VIII. Line vs. Staff.............................................................................................................34
IX. Creativity...................................................................................................................35
Chapter 5
The Physician and the Hospital.........................................................................................37
I. Introduction................................................................................................................37
II. Control of Physicians................................................................................................38
III. The Board of Trustees and the Physician................................................................39
IV. The Professional Staff..............................................................................................39
Chapter 6
Economics and Decision Making in Health Care..........................................................41
I. Introduction................................................................................................................41
II. Economic Laws.........................................................................................................41
III. The Zero Sum Game.................................................................................................42
IV. Supply and Demand.................................................................................................42
V. Model Making..........................................................................................................44
A. Difference Models.........................................................................................44
B. Queue Theory................................................................................................45
VI. Objective Functions..................................................................................................47
VII. Return on Investment...............................................................................................48
Chapter 7
The Management of Health Care......................................................................................53
I. Introduction...............................................................................................................53
II. The Budget...............................................................................................................53
III. Communication.........................................................................................................54
A. Medical Records ..........................................................................................55
B. Pharmacy.......................................................................................................55
C. Management Information..............................................................................55
D. Planning.........................................................................................................57
E. Prevention......................................................................................................57
F. The Communication Failure..........................................................................58
IV. Planning....................................................................................................................58
V. Evaluation.................................................................................................................59
VI. Standards..................................................................................................................59
VII. Regulation.................................................................................................................61
VIII. Policy Making................................................................................................62
Chapter 8
Productivity and the Ethics of Medical Practice...........................................................65
I. Introduction...............................................................................................................65
II. The Physician............................................................................................................65
III. The Judiciary............................................................................................................67
IV. Ethics of the System.................................................................................................68
V. The Patient.................................................................................................................69
VI. Society and Ethics....................................................................................................69
VII. Ethics and the Physician..........................................................................................70
Chapter 9
The Medical School Influences Productivity..................................................................73
Chapter 10
The Industrial-Medical Complex......................................................................................85
I. Introduction...............................................................................................................85
II. Services.....................................................................................................................85
III. Instrumentation.........................................................................................................85
IV. The Clinical Laboratory............................................................................................86
V. The Pharmacy ..........................................................................................................87
VI. The Physician............................................................................................................88
VII. The Hospital.............................................................................................................89
VIII. The Public.................................................................................................................89
IX. Marketing..................................................................................................................90
X. Profit-Making Hospitals............................................................................................91
Chapter 11
What is Good Medical Care?............................................................................................93
I. Introduction................................................................................................................93
II. Life and the Health Care System............................................................................93
PART II: ATTEMPTS TO INCREASE PRODUCTIVITY IN HEALTH CARE
Chapter 12
Introduction.........................................................................................................................99
Chapter 13
National Health Insurance...............................................................................................103
I. Introduction..............................................................................................................103
II. Australia...................................................................................................................103
III. Federal Republic of Germany.................................................................................104
IV. France......................................................................................................................104
V. Sweden....................................................................................................................105
VI. U.K...........................................................................................................................105
VII. New Zealand............................................................................................................105
VIII. The U.S.S.R............................................................................................................105
IX. Republic of China...................................................................................................106
X. A Summary..............................................................................................................106
XI. The Canadian System of Health Care....................................................................106
A. The Medical Care Act...............................................................................107
B. Services......................................................................................................108
XII. National Health Insurance in the U.S.....................................................................108
XIII. Some Proposals for National Health Insurance......................................................109
Chapter 14
Attempts to Control the System Productivity...............................................................Ill
I. Introduction..............................................................................................................Ill
II. Professional Services Review Organizations.........................................................Ill
III. Utilization Review..................................................................................................113
IV. Quality Assurance..................................................................................................113
Chapter 15
Prospective Reimbursement System...............................................................................115
Chapter 16
The Diagnostic Review Group .......................................................................................119
Chapter 17
The Health Maintenance Organization..........................................................................123
Chapter 18
Other Systems of Health Care.........................................................................................127
I. Introduction..............................................................................................................127
II. Prepaid Group Practice..........................................................................................127
III. Consumer Choice Plans..........................................................................................129
IV. Designated Provider Organization (DPO)..............................................................129
V. Certificate of Need..................................................................................................130
VI. Health Service Organizations.................................................................................131
A. Health Planning Agencies...........................................................................131
B. Experimental Health Services Delivery Systems (EHSDS)........................132
C. Regional Medical Program (RMP) ............................................................132
D. STARPAHC.................................................................................................132
E. Health Service Agencies..............................................................................133
F. National Center for Technology Assessment (NCTA)..............................133
G. Office of Technology Assessment (OTA).................................................133
H. Other Attempts at Control...........................................................................133
I. Ambulatory Care.........................................................................................134
J. Emergency Medical Care Systems..............................................................134
VII. New Techniques in Productivity..............................................................................135
Chapter 19
Development of New Ideas...............................................................................................139
PART III: PRACTICAL IMPROVEMENT APPLICATIONS CAN CHANGE
PRODUCTIVITY
Introduction.......................................................................................................................147
Chapter 20
The State of U.S. Productivity .......................................................................................149
I. Introduction..............................................................................................................149
II. Government Actions to Address U.S. Productivity..............................................149
III. The State of Health Care Productivity...................................................................151
IV. Productivity and Costs............................................................................................151
Chapter 21
How to Make Changes in Productivity...........................................................................161
I. Introduction..............................................................................................................161
II. Change Process.......................................................................................................161
III. Nine Questions to Answer......................................................................................161
IV. Readiness to Start....................................................................................................162
V. Sequence for Productivity Success.........................................................................163
Chapter 22
The Impact of Human Behavior on the Productivity of an Organization —
Employee Involvement......................................................................................................165
I. Introduction.............................................................................................................165
II. A Paradox?..............................................................................................................167
III. Japanese Manager....................................................................................................168
IV. Japanese Workers....................................................................................................168
V. Mutuality.................................................................................................................169
VI. American Direction?...............................................................................................169
VII. Summary .................................................................................................................169
Chapter 23
Sequence for Productivity Success................................ 171
I. Introduction..............................................................................................................171
II. Five Ways to Improve Productivity.......................................................................171
III. Sequence for Productivity Success — A Phase Description of the
Model by Phase.......................................................................................................171
A. Awareness/Education — Phase One...........................................................171
B. Strategic Productivity Planning — Phase Two .........................................172
C. Assessment — Phase Three.......................................................................172
D. Tactical Planning — Phase Four................................................................172
E. Training/Implementation — Phase Five....................................................173
F. Maintenance/Evaluation — Phase Six........................................................173
IV. Broad Areas of TacticalO pportunities for Long-Term Improvements....................174
A. A Labor-Management Tactic......................................................................174
B. A Gainsharing Tactic...................................................................................174
C. A White Collar Productivity Tactic............................................................174
D. A Measurement Tactic...............................................................................175
E. An Employee Participation Tactic..............................................................175
Chapter 24
A Case Study of Productivity.........................................................................................177
I. Introduction..............................................................................................................177
II. Background and Action Steps.................................................................................177
A. A Target Department...................................................................................178
B. An Analysis of Actions...............................................................................179
1. Awareness/Education......................................................................179
2. Strategic Planning............................................................................179
3. Assessment......................................................................................180
4. Implementation...............................................................................180
5. Evaluate/Refine...............................................................................180
6. Results..............................................................................................180
III. An Assessmenta nd Application in a Clinical Laboratory.......................................181
A. Description of Clinical Laboratory A.........................................................181
B. Productivity Assessment Project in the Clinical Laboratory....................181
Chapter 25
Case Examples of Productivity Strategies in the Health Care Industry..................191
I. Introduction..............................................................................................................191
II. Government..............................................................................................................191
III. Insurance.................................................................................................................191
IV. Companies...............................................................................................................192
V. Individuals...............................................................................................................193
VI. Hospitals...................................................................................................................194
A. Illinois Hospital Designs a System to Determine Impact of the
Cost of Treatments on Productivity............................................................194
B. Hospital Employees Can Help Control Costs............................................194
C. Cost Containment Partners.........................................................................194
D. The Nonprofit Health Care Leader of Houston.........................................194
E. Revolution in Hospital Management...........................................................195
F. Cash Reward for Good Performance.........................................................195
G. All Hands Needed for Cost Containment...................................................195
H. 25-Year Record of Cost Containment.......................................................195
I. Cost Problems Require Long-Term Solutions...........................................195
J. Meal Service Also Demands Fiscal Responsibility...................................195
K. Two Tries for Success of Cost Committee................................................195
L. Major Savings from Cost Improvement....................................................196
M. Productivity Improves in Radiology Department......................................196