Enabling hospitals to meet the ever-increasing demands for quality health services

Health care delivery becomes increasingly challenging. People live longer, have more ailments, express higher expectations, while government and payors are trying to maintain/ reduce the costs. Hospitals must provide better care for less budgets. This article explains a systematic approach and best practices that help hospitals significantly improve their operations in a systematic and practical way.

Move from in-patient to ambulant services and self-care

A major cost driver is treating and lodging people in hospitals. Health care organizations seek ways to improve efficiencies when treating patients and to reduce time people spend in hospitals. They try to shift traditional hospital work to outpatient services, thus reducing/ eliminating hospital beds and related care operations.

Some of the recent moves are to enable patients to find help through telemedicine, visiting nurses, and other programs. Advanced technology, like apps and chatbots, help monitor patients' health at home and adherence to drug & exercise regiments; provide information, motivation and mental health comfort.

However, this is just one part of the solution...

Systematic approach to improve the performance and delivery quality

There are many different factors that impact the cost and performance of hospitals. It is important to look at all aspects holistically, understand the key components, analyze respective individual aspects and take specific actions. The following framework of Deloitte shows how:

Understand and improve five key components

1)    Optimize the core

Improve the financial performance. Reduce expenditure: Analyze P&L, budget & expenditure, activity costing analysis, high cost items (equipment, prosthetics, pharmaceuticals, etc.). Increase revenue from patient, insurer, government, and commercial (for example: provide additional, more value adding services). Improve cash flow.

Better manage the workforce, which is the largest expenditure of hospitals. Better schedule staff and roster (nursing hours per patient day, budget vs. actual FTE). Optimize workforce skill mix. Improve organization culture, teamwork, employee satisfaction and better outcome

2)    Maximize value in clinical practice

Understand the drivers of variation in patient outcomes and system cost. (Note: That there is a drastic variance of outcomes among hospitals not only across countries and provinces, but also within the same city!)

Monitor/ manage/ improve key aspects & metrics such as length of stay, discharge variation, DRG level clinical & cost variation, ward inliers/ outliers, appropriate treatment setting, bed utilization, day surgery/ day of surgery admission, procedures of limited clinical value, etc.

3)    Service and asset optimization

Understand the drivers of operational performance. Improve/ optimize each area:

Emergency department (e.g. time to admit/ discharge, process time, clinical model). Discharge (social care waiting times, ward rounds and review). Operating theatres (utilization, elective vs. emergency, clinical model). Outpatients (new to review, cancellations, clinical utilization, scheduling, waiting lists). Clinical support services (diagnostic test times, repeat testing, standardized testing, reporting times).

4)    Leverage scales and whole system transformation

Improve efficiency and effectiveness through transforming the whole system and organizational improvement:

Out of hospital strategies. Footprint optimization, Community health models. Leadership and turnaround labs. Change readiness and success criteria.

5)    Technology enabled care

Deliver improved operational and financial performance by embedding full spectrum of data & technology solutions: RPA, Optical Character Recognition, Machine Learning, Cognitive, BI & Visualization, IoT, Blockchain, Clinical coding & billing, physical robotics, Real Time Tracking Solutions, etc.

Examples of a real-life hospital implementation

Each hospital situation is unique. The location, population demographics, size, service offering and ambition varies. A tourist destination with many outdoor activities may require larger emergency room capabilities. A hospital located in a predominantly population of elders may cater more for respective age related disease types and treatments. A hospital part of a larger group may be able to leverage economies of scale with regard to staff pool, education, training, management, IT and systems.

At the same time there will be always key areas that are good prospective targets for operational improvements.

Here an example of a previous client project

How to drive improvements - The process explained

The previous section explained key areas with their respective aspects. This section explains the approach and methodology of a successful hospital improvement program.

It is helpful to follow a well-proven process. This process entails five steps. Please note that there may be notable iterations, learnings and improvement while moving through these steps depending on client specific needs.

1)    Discover

Analyze quickly existing initiatives. Assess current performance and interpret key drivers. Establish design principles in future-state. Establish OPEX base line. Assess organization change readiness. Plan for quick wins. Investigate relevant historical factors (within regional/ national context). Assess organizational capability and capacity to undertake notable change. Review adequacy of short-term cash flow and any respective constraints. Identify procurement opportunities for potential self-funding.

2)    Determine

Present shortlisted options to CEO/ MD. Lead practice comparison discussion. Prioritize opportunities against agreed objective criteria. Conduct benchmarking analysis. Conduct gallery/ facilities walk-throughs. Implement technology solutions to visualize improvements (dashboards, apps, etc.). Implement financial/ operational benefit tracking of performance.

3)    Design

Plan solution with initiative leaders. Establish clear objectives & milestones. Develop clear accountability for initiatives. Develop short/ medium term cash flow and working capital mgmt. initiatives. Start delivery of identified wins for rapid adoption. Appropriate mix of achievable, early wins. Plan for short-term savings available for reinvestment.

4)    Deliver

Manage project effectively. Establish system to track benefits. Mitigate risk strategies. Provide operational coaching for key initiative stakeholders to enable skills transfer and drive realization of opportunities. Deliver identified savings. Summarize achievements for communication.

5)    Drive

Establish global community of practice. Leverage client insights. Collaborate globally to gain/ share lessons learnt. Schedule periodic check-ups (3, 6, 12 months). Assess program results against original quantitative objectives and design principles.

Focus on people and leverage latest methodologies, assets and enablers

My personal advice and key to success is to always focus on meeting the needs of the individual health care professionals, stakeholders and patients.

There are several ways to achieve it: Close and frequent people interactions. Methodologies in design thinking, agile, and rapid prototyping. Digital technologies to facilitate communication.

Conclusion

Hospitals provide life-saving and health services to millions of people. Hospitals increasingly struggle to provide such services in cost-efficient and sustainable way due to numerous challenges such population growth, increased life span and complexity of medical operations. This article offered a systematic way of analyzing and improving hospital operations.

If you are interested in more Hospital, Health Care and/or Life Sciences related content, please refer to my other articles:

Read how the leading high tech companies build/ work with so-called Internet hospitals. Click below:

Read how Medtech companies need to better engage with hospitals and health care providers click below:

Read how pharmaceutical companies need to better engage with doctors, hospitals and healthcare providers. Click below:

You may also reach out to me personally. You can communicate with me through email at [email protected] or WeChat (ID: alexwsteinberg2 ).

About the author: Alex Steinberg comes out of a family of doctors, scientists and other health care professionals who have sacrificed their lives to improve the health & well-being of people. Alex works drives digital transformation, innovation and intelligent automation efforts for the largest companies his China. His personal ambition is to positively impact the health & well-being millions of people.

Special credits: Content and methodologies of my Deloitte colleagues.

Legal disclaimer: This article represents my personal opinion and does not reflect that of my current/ previous employer(s) or clients. The article intends to increase awareness, understanding and dialog about Health Care and Life Science issues. It does not present any offer or advice in a legal sense. Markets and technology change quickly and information gets out-of-date. The reader is advised to get individual analysis & consultation.