Healthcare Management: Topics and Methods
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1 University of Cologne Healthcare : Topics and Methods
2 Healthcare Ludwig Kuntz Executive for Information at the University Hospital of Mainz Head of Controlling at the University Hospital of Hamburg Professor for Business Administration and Healthcare
3 Healthcare Content of the Talk 1. Question 2. Healthcare and Health Economics 3. Healthcare : Faults and Methods - Examples Operations Research - Examples General Business Administration 4. Situation Analysis (Teaching and Research) 5. Summary
4 Healthcare Question What is Healthcare? Healthcare = Health Economics? Which methods are used? What are topics? Relevant literature?
5 Healthcare Healthcare : A particular perspective! Medicine (doctors, nurses, treatment, ) Economics (state, system financing, insurance companies, ) (executives, hospitals, costs, revenues, performance, )
6 Healthcare Economic Perspective Fundamental Papers Arrow K. J; Uncertainty and the Welfare Economics of Medical Care, The American Economic Review, Shleifer A.; A theory of yardstick competition, Rand Journal of Economics, Dranove D.; Rate-Setting by diagnosis related groups and hospital specialization, Rand Journal of Economics, Ellis R. E., McGuire T.G.; Provider behaviour under prospective reimbursement, Journal of Health Economics, 1986
7 Healthcare Economic Perspective Fundamental Papers failure of the market price regulation should depend on the costs consideration of DRG-based reimbursement risk of reducing quality risk of patient selection
8 Healthcare Medical Perspective Topics and Methods health status measurement assigning values to health states cost benefit analysis (CBA) cost effectiveness analysis (CEA) cost utility analysis (CUA)
9 Healthcare Medical Perspective Topics and Methods Example (Eddy,1990): Cost per Year of Life Saved for Different Frequencies of Sreening $ $ $ $ $ $ $0 $ $ $ $ Years 3 Years 2 Years 1 Year Sreening ervery
10 Healthcare Perspective A long MS/OR Tradition State of the art: Operations-Research and Health Care A Handbook of Methods and Applications, 2004 (Ed.: A.L.Brandeau, F. Sainfort, W.P. Pierskalla) Content: 3 categories 1.Public policy and economic analysis 2.Clinical applications 3.Health care operations management
11 Healthcare Perspective A long MS/OR Tradition State of the art: Operations-Research and Health Care A Handbook of Methods and Applications (Ed.: A.L.Brandeau, F. Sainfort, W.P. Pierskalla) Public policy and economic analysis + Clinical applications Modeling Health Outcomes, Treatment for Opiate Addiction, HIV, pedriatic immunization, Kidney Allocation, global Modeling medical treatment, medical decision analysis, anesthesia patient risk reduction, Asthma policy model, radiotherapy treatment planning individuel
12 Healthcare Perspective A long MS/OR Tradition State of the art: Operations-Research and Health Care A Handbook of Methods and Applications (Ed.: A.L.Brandeau, F. Sainfort, W.P. Pierskalla) Content: 3 categories 1.Public policy and economic analysis 2.Clinical applications 3.Health care operations management
13 Healthcare Perspective Method 1: DEA Erroneous thinkung: Comparisons are not possible! Output (e.g. cases DRG) hospital Efficiency Input (e.g. budget, investments)
14 Healthcare Perspective Method 1: DEA g x i + g x E i i = = E E * i i = max E 1,..., E Output Input C i { } n cases (internal) 300,00 250, , ,00 100, ,00 0,00 0,00 50,00 100,00 150,00 cases (surgery)
15 Healthcare Perspective Method 2: Queues/Simulation Erroneous thinkung: Decisions are based on averages! Distrubution of Occupancy days per month %- 10% 11%- 20% 21%- 30% 31%- 40% 41%- 50% 51%- 60% 61%- 70% 71%- 80% 81%- 90% 91%- 100%
16 Healthcare Perspective Method 3: Linear Programming Erroneous thinkung: More is better! DRG B Intensive care unit profit (0;500) (500;200) (800;0) operating theatre DRG A
17 Healthcare Perspective Method 3: Linear Programming Case Mix Optimization with Budget constraint (Germany) billings costs budget earnings break even 1 break even 2 cases
18 Healthcare Perspective Method 4: MAUT Erroneous thinkung: Rational decisions are not possible! System of different objectives! profit, quality, satisfaction, good company
19 Healthcare Perspective Method 4: MAUT System of different objectives! (Kleinmuntz/Kleinmuntz) Objective Attribute Score Weights Financial Present Value ,90% Financial Resource Efficiency ,90% Quality Facility Quality 50 8,50% Quality Patient / Family Satisfaction 75 12,70% Quality Patient Outcomes 70 11,90% Quality Physician Relationships 45 7,60% Strategic Information Integration 50 8,60% Strategic Market Share ,90% Totals ,00%
20 Healthcare Perspective Method 4: MAUT Erroneous thinkung: Rational decisions are not possible! Example: NPV quality satisfaction weight 30 % 50 % 20 % Value Information system Tsd ,55 x-ray unit +/ ,60 More than 250 applications in USA (Kleinmuntz/Kleinmuntz)
21 Healthcare Perspective Method 5: Portfolio Erroneous thinkung: Every department is the best! attractivity of market question marks stars internal medicine dogs surgery cash cows obstetrics rel. position in competition
22 Healthcare Perspectice Situation Analysis (Michael Carter; Diagnosis: Mismanagement of resources-ailing health care system desperately needs a dose of operations research, so why aren t more OR professionals responding to the emergency, OR/MS Today 2002) Health care is a business like no other multiple decision-makers with conflicting goals Control by goverment or insurance companies Politicians and advocacy groups try to influence Recommendation: A soft start of OR-projects
23 Healthcare Perspectice Situation Analysis Papers in journals listed by Financial Times (1/2003-6/2005) 8,00% 6,00% 4,00% 2,00% 0,00% Share "Healthcare " 0,28% 6,49% Study beginners in 2004 at Faculty of, Economics and Social Sciences (University of Cologne) Research Teaching
24 Healthcare Perspectice Situation Analysis Four examples of papers in TOP-Journals (Financial Times) Krishnan R.A., Joshi S, Krishnan H.; The influence of Mergers on Firms Product-Mix Startegies; Strategic Journal, 2004 Huckman R.S.; The Utilization of Competing Technolgies Within the Firm: Evidence from Cardiac Procedures; Science, 2003 Tucker A. L., Edmondson A.C.; Why Hospitals Don t Learn from Failures: Organizational Dynamics that Inhibit System Change; California Review, 2003 Lleewellyn S, Northcott D.; The Average Hospital, Accounting, Organizations and Society, 2004
25 Healthcare Perspectice Situation Analysis Four examples of papers in TOP-Journals (Financial Times) Results Mergers did not shift away from low-profit services Technological status of groups affects the relative rate of use Hospitals are not learning from the daily problems If doctors, patients and clinical practices are moulded in costed categories, they become more standardizes and commensurate
26 Healthcare Perspective Summary of Analysis What we have! We have a lot of data! Healthcare is important and complex What scientists should do! Work multidisciplinary (not only with doctors and nurses) Don t just transfer something known: While this study focuses on hospital nurses, the authors note that the lessons learned have implications for managers in other service organizations as well (Tucker and Edmondson, 2003) Ludwig Kuntz
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