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Case Study: THE EMERGENCY

ROOM Examine BI Data Sets

MELJUN CORTESMELJUN CORTES

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IntroductionThis case introduces the notion of the emergency room as a production site

The notion of demand/supply matching is a concept borrowed from supply-chain management that is being applied to hospital management in a number of lean hospital projects

Before analyzing the data, students should discuss the following:1. What constraints impinge on hospital management, especially as it

relates to the ER? (Note that this is another way of analyzing the external environment.) Close this discussion by showing how their analysis fits with a five-forces type of approach.

2. Generate a strategy map for the ER. In addition, what is the ultimate outcome and what can one do to influence these outcomes?

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OverviewThe Emergency Room

•Dr. Brownlee manages the emergency room (ER) at the BigTown Hospital (BTH), Ontario. •On a recent vacation, he took time to speak number of doctors and administrators in a newly created ER •hospital was privately run•it enjoyed a higher degree of operational flexibility

• higher compensation for meeting certain treatment time targets • higher compensation for following treatment protocols

•Same management practices adopted at BTH in early 2004 that were in line with what he saw in the privately operated hospital in Italy

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Background• Recent studies, both in the United States and in Canada, have suggested

that ER usage can be expected to increase. • U.S. study noted a rise of 18% in ER usage between 1993 and 2004• similar study in Ontario found a trend towards decreased visits

– closure of 20 ERs during the period under study– remaining ERs experienced an actual increase in traffic of approximately 10%

• main challenges: – escalation in demand – pressure to reduce the number of beds– Pressure to reduce wait times for specific surgeries – compete for staff in the face of a shrinking labour pool of physicians and

nurses

• Dr. Brownlee felt that the time was right to examine more carefully the “business model” of an ER.

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The ER Business Model• Main characteristic noted about ER operations - the careful approach taken

to developing and implementing a business model• Focus needed on examining administrative aspects from a strategic

perspective

• Italian administrators modeled the ER as a form of production system• Key elements included:

– Physical layout to allow for the efficient flow of patients, and – The height of counters in the reception areas

• Ensure that patients could maintain good eye contact with the reception staff

• Reception staff could clearly view the body language of patients entering the ER

• Better communication meant more effective triage which contributed to reduced wait times

• Health care in Canada is a public-sector service, therefore, there is not as much administrative freedom

• There is scope for taking a systemic view that could help improve overall efficiency and effectiveness

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Late 2003• Dr. Brownlee and his administrative team debated on the notion of a

brokerage system

Key discussions• role of the administrative team role - matching demand and supply by linking

patients with certain types of symptoms to doctors with certain types of skills• Argument - the “symptom-skill” matching process did not matter for a large

majority of ER cases as ER is staffed mainly by general practitioners (any doctor would suffice)

• some situations required specialists to be called in, so the matching process was important in these instances (but not for all)

Result• the brokerage model would provide a good start for their evaluation and

improvement of ER management

The ER Business Model (cont’d)

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Core aspects of the system:

• Outcome of the system – patients whose issues have been resolved (resolution could mean treated or referred)

• Key outputs – the number of patients treated in a certain period of time, and the cost of this throughput

• Critical inputs – material (medical and surgical supplies) and labour

The ER Business Model (cont’d)

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Deep Dive - System Outcomes and Outputs• all patients were either treated or referred

– Argument• the number of patients who returned with the same ailment and

those who gave up waiting and either went home or to another clinic should also be important metrics for the ER

– Majority vote• patients leaving without being seen occurred so rarely that this aspect

did not merit inclusion in the model for the time being– Not to be forgotten:

• a strictly clinical approach to measuring system outcomes would be inadequate

• something about patient satisfaction should also be addressed• Dr. Naismith (2nd in command) vocal about the need to consider patient

satisfaction• the number of patients who returned with the same ailment and the number

of patients who left before being treated should be important components of the business model.

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Compromise: • “throughput” – the interval of time from when a patient first

enters the ER to when he or she leaves – was adopted as the key output metric

• separated into “treatment time” and “wait time.”

Rationale:• patient satisfaction mainly determined by wait time• treatment or how long it took was not often in question• wait time would be used as a proxy for patient satisfaction

Deep Dive - System Outcomes and Outputs (cont’d)

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Budget• administrative team responsible for meeting the cost budget set by the

hospital– doctors worked on a fee-for-service basis (billed to public health

insurance) - this cost was not reflected in the hospital’s budget. – cost of throughput included labour costs for nurses and administrative

staff and material costs which varied with each procedure• Overhead costs were more or less fixed

Other Considerations: • influence of ancillary services such as radiology

– time spent in ancillary services influenced overall treatment time– impact of ancillary services on throughput would be more or less

constant – given the low level of control on these services, it would be better to

leave this aspect out of the model for now

Deep Dive - System Outcomes and Outputs (cont’d)

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“Trading Floor”• ER provided a “trading floor” where buyers (patients) could be linked to sellers

(doctors and nurses)• The physical facilities represented the constraint on the system• The behaviours of the buyers and sellers within this constraint contributed to

expected outputs

Brokerage System effectiveness• Staff had to be recruited and trained• Materials (medical and surgical supplies) need to be coordinated so that these

would be available when required

Key Factors• Well-developed supply management system (very rarely stocked out)• Steady supply of health-care professionals • Administrative procedures for using this talent effectively

Deep Dive - System Inputs

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Base Year• It was decided to gather information on the

functioning of the ER using 2004 – the year in which the business model was first developed

Other information• severity of cases being handled and specific

procedures performed would be needed• a selection of measures

Deep Dive - System Inputs (cont’d)

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Severity• rating scale to define the severity of a patient’s condition was collapsed into the

following three categories:– Category 1 – Urgent cases (life-threatening and “close to” life-threatening)– Category 2 – Semi-urgent cases (serious but not life-threatening)– Category 3 – Non-urgent cases

Procedures• The specific treatment codes used in the hospital were collapsed into the following six

broad categories:1. Trauma – patients with injuries caused by external forces (accidents, fights, etc.)2. Upper respiratory – patients with problems related primarily to breathing3. Skin and gastrointestinal – patients with skin or intestinal disorders4. Signs and symptoms – patients with unspecified signs and symptoms of a disorder5. Cardiac: patients with heart problems6. Psychological, endocrine and poison – this category includes patients with

psychological problems, endocrine disorders or poison-related issues

Deep Dive - System Inputs (cont’d)

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1. Would a different physician staffing formula make a difference for wait times, treatment times and costs? The current model is a “contractor” model: independent doctors provide services to the hospital in addition to running their own practices. Some ERs had made use of Alternate Funding Arrangements to create a salaried group of doctors dedicated to the ER.*

2. The planned labour and material cost targets assumed that a specific treatment protocol would be followed. Does it make sense to enforce protocols or is it better to allow doctors to follow practices learned in their own training and in their individual practices?

3. Does it make sense to exclude ancillary services from their business model? Even if members of the administrative team do not have direct control over these services, they could, as a team within BTH, influence what goes on there.

4. What is the “boundary” of an ER? Is it really constrained by the physical layout of the hospital? Are paramedics, for example, part of the ER “team”?

Outstanding Questions

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Discussion PointsTime: 20 minutes each

Discussion 1: Patient satisfaction appears to be improving slightly (students can explore the data here to verify). – What does patient satisfaction mean? – Are Brownlee and his team measuring the right things? (Students can

explore the web to find definitions of patient satisfaction.)

Summary: – A wide variety of stakeholders with different needs influence ER

management (In Ontario, these are the Ministry of Health and Long Term Care, the LHINs and, of course, doctors and patients)

– Is it possible to satisfy all expectations? – Which should take priority?

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Discussion Points (cont’d)Time: 20 minutes each

Discussion 2:• In 2004 and 2005, Brownlee tried to make a number of changes.

– What changes are evident? Students should explore to find out the changes that are relevant. The idea of creating teams of doctor and leveling out the number of procedures each doctor performs is one of the main changes introduced.

Summary: • In the hospital environment, what degrees of freedom exist in improving

efficiencies? • What are the constraints? Key questions:

– Can one force treatment protocols on doctors? – Can one provide incentives for cost control? – Does the administrative team influence patient satisfaction?

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Conclusions• The purpose of this case was to explore the notion of applying

different business models as a performance-management framework in the health-care environment. There are several key things to consider:– First, to what extent can one apply production-type

business models to such an environment? – Second, what are the key outcomes? – Third, who are the most important stakeholders?

• The most likely responses for Brownlee are:– to consider the constraints, – to continue to “team” the MDs– to review the treatment protocols