Synopsis of Mini-Case 11.1: Perfecting Patient Care (p. 173; Lee textbook): In this case, Jamie, the nursing home administrator, and Logan, the system’s Chief Operations Office, are under the impression that the management team at the nursing home, in question, needs to focus more attention on improving operational efficiencies and addressing perceived safety concerns by utilizing a Lean production approach. The system vice president of finance, Reilly, expressed concern that utilizing a Lean may actually lower the quality of care provided to the residents due to the cost cutting that will result. In addition, he is concerned that resultant changes in processes will put unnecessary pressure on employees and, finally, that diminished quality of care and unnecessary pressure on employees are inconsistent with the current mission of the organization.This mini-case does a really nice job illustrating that there isn’t always unanimous support for cutting costs to increase profits. With that said, there is a lot of pressure on organizations to lower their operating costs in order to generate the needed profits to reinvest in the business. Healthcare reforms have increased the number of previously uninsured residents and citizens, which has correspondingly increased the volume of clients utilizing healthcare services. At the same time, reimbursement methodologies are moving away from the fee-for-service model, which is based on volumes, and instead are using a value-based approach, which is focused on the quality of the case provided. In addition, there is a growth in capitation and bundled payment systems—each compelling providers and provider organizations to better manage their expenses. These same healthcare reforms and insurers are adding pressure the healthcare leaders to adopt new models of care delivery that will improve outcomes while better controlling costs. This trend isn’t likely to lessen. Instead, healthcare organizations are going to need to place more emphasis on utilizing health informatics and data analytics to drive financial, operational, clinical, and strategic decision-making. In addition, leaders will need to put more effort on identify and addressing inefficient and ineffective processes, since these will increase costs and lower profits.SourcesLee, R. H. (2015) Economics for Healthcare Managers Third edition. Chicago, Ill: Health Administration Press.DIRECTIONSThe student, will assume the role of Jamie, and has been tasked with preparing a position paper that supports his recommendation to utilize a Lean production approach to improve the operational inefficiencies and safety concerns associated with his facility. Realizing that this paper will be read by members of the system’s senior leadership team, including Reilly, and approval will be needed to move forward with the Lean approach (reengineering), Jamie will need to address the concerns expressed by Reilly. It should be assumed that Reilly’s concerns may be shared by other members of the leadership team. Jamie will need to take into consideration how you would respond to the following questions when preparing the position paper:1. Why is inefficiency common in healthcare? Doesn’t competition force organizations to be efficient?2. What evidence do we have that process redesign can improve efficiency? Isn’t process redesign just another name for making employees work harder? Is there evidence that employees will accept the redesign?3. Plenty of evidence indicates that problems with quality of care harm patients, but won’t improving quality cost more? How could better quality not cost more?
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