Chapter 6.
Reengineering
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
1
Outline






Reengineering vs. Other Methods
Work Design in Health Care Organizations
– Work Design
– Job Design
Work Measurement-Standard Times
– Stopwatch Time Studies
– Standard and Predetermined Times
Work Measurement Using Work Sampling
– Determination of Sample Size
– Development of Random Observations Schedule
– Training Observers
Work Simplification
– Flow Chart
– Work Distribution Chart
– Flow Process Chart
Worker Compensation
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
2
Reengineering vs. Other Methods


Healthcare managers have often sought
organizational change, restructuring, and
downsizing. Although those methods may
improve the financial base of the organization or
productivity at least temporarily by “cutting the
fat,” namely by reducing the staff across the
board, yet they create other problems. In
particular, reducing staff can lead to major
problems in the quality of care.
Two other contemporary and popular methods that
aim to improve both performance and the quality
are total quality management (TQM) and
continuous quality improvement (CQI) which are
geared to make incremental changes over time.
Chapter 6: Quantitatve
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Management
Yasar A. Ozcan
3
Reengineering vs. Other Methods


Reengineering is a methodology intended to
overcome the difficulty in realizing TQM/CQI
performance over a long duration, as well as
the myopic conduct of organizational change,
restructuring and downsizing.
To reengineer the system, healthcare managers
must be able to understand work-design, jobs,
job measurement, process activities, and
reward systems – all well known concepts of
industrial engineering. With that knowledge,
they can recognize the bottlenecks in the old
system, identify unnecessary and repetitive
tasks, and eliminate them in the reengineered
system of care.
Chapter 6: Quantitatve
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Management
Yasar A. Ozcan
4
Importance and Purpose
Human resources represents over 40%
of healthcare facility budgets
 Productivity and satisfaction of staff
involves an understanding of the work
environment
 Work must be designed so that
employees are happy, organizational
productivity is high, and costs are
minimized

Chapter 6: Quantitatve
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Management
Yasar A. Ozcan
5
Work Design- A Systems Perspective
Work Design
Work
Measurement
Job Design
•Who?
•How?
•Where?
External
Factors
Worker
Compensation
•Time Study
•Time Based
•Predetermined
•Output Based
Standard
•Work Sampling Job Simplification •Incentive Plans
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
6
Job Design
Who does what, how, and where?
 Consistent
with organizational
goals
 Write it down!
 Understand and communicate it
 Involve employees and
management
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
7
Frederick Winslow Taylor
 Developed
Scientific Management
Approach
 Focused on time studies
 Conflicts between labor and
management occurred because
management had no idea how long
jobs actually took
For what types of jobs would this
approach work best? Are there
Chapter 6: Quantitatve
Healthcare applications?
Methods in Health Care
Management
Yasar A. Ozcan
8
Efficiency School-Logical and Systematic



Best for simple, repetitive routine, and
separable tasks
Healthcare Examples:
– lower level administrative duties
– division of labor
– standardized forms and paperwork
– robots in laboratories
– automation of routine tasks
Not good for judgmental/unpredictable tasks
Chapter 6: Quantitatve
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Management
Yasar A. Ozcan
9
Advantages and Disadvantages of Specialization
Management
Advantages
Disadvantages
Employees
a. Simplifies training
b. Higher productivity
c. Low wage costs
a. Low education/skill
b. Minimum responsibilities
c. Little mental effort needed
a. Difficult to motivate
quality
b. Worker dissatisfaction,
absenteeism, high turnover, disruptive tactics,
poor attention to quality
a. Monotonous and boring
b. Limited opportunities for
advancement
c. Little control over work
d. Little opportunity for selffulfillment
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
10
Behavioral School
Satisfaction of Wants/Needs
 Intrinsic
and extrinsic motivators
 Specialization leads to monotony and
worthlessness
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
11
Socio-technical School Approach
Efficiency School
(Technical Focus)
Behavioral School
(Human Focus)
Socio-technical School
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
12
How can jobs be improved?
Job enlargement-- give workers a
larger portion of the total task
(horizontal loading-- additional work at
same level of skill and responsibility)
 Job enrichment-- increasing
responsibility for planning and
coordinating tasks (vertical loading)
 Job rotation-- workers periodically
exchange jobs

What are examples of each?
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
13
Work Measurement Using Time
Standards
Time standards are important in
establishing productivity measures,
determining staffing level and
schedules, estimating labor costs,
budgeting, and designing incentive
systems
 A time standard represents the amount
of time needed for the average worker
to do a specific job working under
typical conditions

Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
14
The First Step. . .
The amount of time it should take a qualified
worker to complete a specified task, working at
a sustainable rate, using given methods and
equipment, raw materials, and workplace
arrangements is called a standard time.
A Standard time can be developed through:
•Stop-watch studies
•Historical times
•Predetermined data
•Work sampling
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
15
Stopwatch Time Studies



Take time over a number of trials (cycles)
Workers should be educated regarding the
process to avoid suspicion and avoid the
Hawthorn Effect
Number of cycles to time (i.e., sample size)
– variability in observed times
– desired accuracy
– desired level of confidence for the estimate
Chapter 6: Quantitatve
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Yasar A. Ozcan
16
Determining Sample Size
Accuracy desired may be explained by the percentage
of the mean of the observed time. For instance, the goal
may be to achieve an estimate within 10 percent of the
actual mean. The sample size is then determined by:
zs 2
n= ax
where:
z = number of std. dev.
needed for desired
Z-value
confidence
1.65
s = sample std. dev.
1.96
a = desired accuracy
2.33
x = sample mean
2.58
( )
Desired
Confidence
90
95
98
99
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
17
An Alternative Formula
Desired accuracy may be expressed as an amount (e.g.,
within one minute of the true mean). The formula for
sample size becomes:
n=
zs 2
e
( )
where
e = Accuracy or
maximum error
acceptable
To make an initial estimate of sample size, you should
take a small number of observations and then compute
the mean and std. dev. to use in the formula for n.
Chapter 6: Quantitatve
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Management
Yasar A. Ozcan
18
An Example
A time study analyst wishes to estimate the time required
to perform a certain job. A preliminary study yielded a
mean of 6.4 minutes and a standard deviation of 2.1 min.
The desired confidence level is 95 percent. How many
observations will be needed (including those already taken)
if the desired maximum error is:
a) +/- 10 percent?
b) one-half minute?
a) n =
=
zs 2
ax
( )
(
1.96(2.1) 2
= 41.36
.10(6.4)
Chapter 6: Quantitatve
Methods in Health Care
Management
)
Yasar A. Ozcan
zs 2
b) n = e
1.96(2.1) 2
= 67.77
n=
0.5
( )
(
)
19
Determining the Standard Time


Observed Time-- average of observed times
– OT = xi/n
Normal Time-- observed time adjusted for
worker performance
– NT = OT * PR (where PR = performance
standard measured for the entire job)
– NT = (Ej*PRj) (where PR is measured
element by element)
– PR equals 1 for the average worker; PR< 1 is
for a slower worker
Chapter 6: Quantitatve
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Management
Yasar A. Ozcan
20
ST = NT * AF
 Standard
time equals normal time
multiplied by an allowance factor
 Allowance Factor
– accounts for personal delays,
unavoidable delays, and/or rest breaks
– AFjob = 1+A, where A= allowance
percentage based on job time
– AFday = 1/(1-A), where A = allowance
percentage based on work day
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
21
Table 6.1 Typical Allowance Percentages for Varying Healthcare Delivery Working Conditions
Allowance Level
Percent
1. Basic-low (personal, fatigue, standing)
11
2. Basic-moderate (basic-low and mental strain)
12
3. Basic-high (basic-moderate and slightly uncomfortable
heat/cold or humidity
14
4. Medium-low (basic high and awkward position)
16
5. Medium-moderate (medium-low and lifting requirements up to
20 lbs.)
19
6. Medium-high (medium-moderate and loud noise)
21
7. Extensive-low (medium-high and tedious nature of work)
23
8. Extensive-medium (extensive-low and with complex mental
strain)
26
9. Extensive-high (extensive-medium and lifting requirement up to
30 lbs.)
28
Source: Adapted from B.W. Niebel, 1988.
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
22
The Allowance Factor
 Compute
the allowance factor if:
– The allowance is 20 percent of job time.
– The allowance is 20 percent of work
time.
A) AF = 1 + A = 1.20, or 120%
B) AF = 1/(1-A) = 1/(1-.2) = 1.25 =
125%
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
23
An Example
The following observed times have been collected with a
performance rating of 1.10. Using an allowance factor
of 15% of job time, determine the appropriate standard
time.
Preliminary Calculations:
n=9
PR =1.10
A = 1.15
Chapter 6: Quantitatve
Methods in Health Care
Management
Obs
1
2
3
4
5
Time (min) Obs Time
4.20
6
4.18
4.15
7
4.14
4.08
8
4.14
4.12
9
4.19
4.15
37.35
Yasar A. Ozcan
24
The Solution
A. OT = 37.35/9 = 4.15 minutes
B. NT = OT x PR = 4.15 x 1.10 = 4.565 minutes
C. ST = NT x (1+A) = 4.565 x 1.15 = 5.25 minutes
Now, what do: OT, NT and ST represent?
Chapter 6: Quantitatve
Methods in Health Care
Management
Obs. Time (min) Obs. Time
1
4.20
6
4.18
2
4.15
7
4.14
3
4.08
8
4.14
4
4.12
9
4.19
5
4.15
37.35
Yasar A. Ozcan
25
What are the problems with time
studies?
 Subjective
performance ratings and
allowances
 Only observable jobs can be studied
 Highly costly -- best for repetitive
tasks
 Disrupts worker routine
 May cause worker resentment
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
26
Other Methods


Historical/Standard Elemental Times
– Firms collect data on standard job elements
– Put these data together to determine job
times
– Less costly and disruptive
– Limited applications in healthcare
Predetermined Standards
– Obtained from trade publications
– Need no performance of allowance factor
– Operations are not interrupted
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
27
Work Measurement Using Work
Sampling



Technique for estimating the proportion of
time that a worker or machine spends on
various activities
Observers make brief observations of a worker
or a machine at random intervals over a
period of time and simply note the nature of
the activity
Purpose:
– To estimate percentage of unproductive or
idle time for repetitive jobs
– To estimate the percentage of time spent on
various tasks for non-repetitive jobs
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
28
Work Sampling Steps
1)
2)
3)
4)
Determine the sample size
Train the observers,
Develop random sample schedule
Take observations, and re-compute the
desired sample size several times if initial
estimates are not reliable
5) Determine the estimated proportion of time
spent on specified activity
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
29
Step 1: Sample Size
The goal of work sampling is to obtain an estimate that provides
a specified confidence not differing from the true value by more
than a specified error
CI  pˆ  e
e  z ( pˆ * (1  pˆ )) / n
n  ( z / e) pˆ (1  pˆ )
2
CI = confidence interval,
e = error,
z = number of standard deviations needed to achieve desired
confidence,
p̂  sample proportion (number of occurrences divided by sample size),
n = sample size.
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
30
Sample Size, cont.
Example 6.1: A hospital administrator wants an
estimate of X-ray idle time that has a 95.5
percent confidence of being within 4 percent
of the actual percentage. What sample size
should be used?
e = 0.04
Desired
Confidence
90
95
95.5
98
99
Chapter 6: Quantitatve
Methods in Health Care
Management
z = 2.00
Z-value
1.65
1.96
2.00
2.33
2.58
n = (z/e)2p(1-p)
When p is unknown, a
preliminary estimate of
sample size can be obtained
using p = 0.5. Then after 20
observations, a new estimate
can be obtained.
Yasar A. Ozcan
31
Solution:
Given: e = 0.04; z = 2.00 (see Appendix A);
p̂ = 0.5 (preliminary).
p̂ = 0.5: n = (2.00/0.04)2 * .50 * (1-.50) = 625 observations.
If for 20 observations, it is observed that the x-ray was breaking down on
average 1 time, the revised estimate is then
p̂ = 1/20 = 0.05.
The revised estimate of sample size is:
p̂ = 0.05, n = (2.00/0.04)2 x .05 x (1-..05) = 118.75 or 119 observations.
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
32
Step 2: Train Observers
A comprehensive training program of three steps should be
standardized for all data collectors. Data collectors should be
first educated as to the study’s goals, protocol, collection
procedures, and data submission procedures, and the
guidelines for their behavior. Then, the observers should be
trained in data collection. Training may include sessions using
videotaped activities for practice in identifying and recording
actual nursing services. In the third phase, observers
participate with a project member, in explaining the nature of
the project to those who will be observed, in the observation
setting.
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
33
Step 3: Random Observation Schedule
 Need
random number for day, hour,
and minute, with the number of
digits needed for each number
equaling the number of days in the
study, hours per day, and minutes
per hour.
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
34
Table 6.6 Random Numbers
1
2
3
4
5
6
7
8
1
35491937
20651090
30546738
27696713
91854858
26470901
29600381
43662404
2
90089321
75138197
18262296
58506988
53664329
58683691
44072656
72123301
3
74264444
20553216
88880910
32182848
99227273
42091243
00185415
8357505
4
6975941
19701236
59830829
79995795
34330400
63691396
97866058
36093751
5
85104515
28079011
30791869
49069307
25601053
20059512
59647584
82327514
6
49445830
31791906
92435664
55449680
36293078
76826714
89141197
12205275
7
97984536
60317366
21508928
98014497
61529058
44276591
14715726
69340554
8
50991720
74038271
96451777
08764415
56072460
46404128
38033324
01926168
9
64349299
37831506
63182639
04789945
77658452
04272124
48048380
41902751
10
34894237
13116155
43110883
70982790
83397806
76383491
01380231
72811348
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
35
Example 6.3: A nursing manager wants to observe the time a
nurse spends in direct and in indirect care over a 5-day
period, on a unit where the shift is 8 hours.
Solution:






A one digit number will be needed for the day, one digit for the
hour, and two digits for the minute.
Using Table 6.4, starting from row 4, column 3, we obtain the
random number 59830829.
The first number is 5. Thus, we determine the day (in this
case, the fifth day of the week, Friday).
We move to the next number, 9, for the hour; but since activity
is performed 8 hours daily, we discard that number, and move
to the next one, 8. If we assume that the shift starts at 7:00
AM, the number 8 represents 2:00 PM.
The minutes are derived from the next two digits, 30. Put
together, the first observation is made on the fifth day, 30
minutes into the 8th hour of work, or at 2:30 PM.
This procedure is repeated for each observation to be taken.
Then the observations should be sorted chronologically by day,
hour and minute.
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
36
Example 6.4: The chief of the hospital maintenance technicians wants to
estimate the proportion of time that technicians spend in a part of the
maintenance process. The maintenance office is open 9 hours, starting at
8:00 AM, every day of the week. 20 observations will be taken during a
month-long investigation. Determine the random observation times and
develop an observation schedule, assuming that the serial number of a dollar
bill starts with 25.
Solution:
 Since we know the starting point in Table 6.4 is the 2nd row and 5th column,
the random number is 53664329.
 Next we need to choose the reading direction of the succeeding random
numbers: either by moving to the right on the same row, and when the row
is finished, going down one row and moving from left to right; or by going
down on the same column, and when the column is finished moving to the
next column right and reading from bottom to top.
 For this case, we choose to read in the same column, going down. For days,
read two digits from left to right – select two-digit number, if higher than 31,
then move to the next digit to make a two-digit day observation, and so on.
 Within eight digit numbers, if there are not enough digits to identify day,
hour and minutes for the observation, discard that random number and
select the next one.
 For hours, read single digit numbers from left to right, discard 0 and assign
1=8:00 A.M., 2=9:00 A.M., and so on.
 For minutes, read two digit numbers and discard numbers 60 or over.
Prepare a chronological list of the observation time results by day, hour and
minute, to be given to the data collection team.
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
37
Table 6.7 Development of the Schedule for a Work Sampling Study
Observation
Random Number
Day
Hour
Minute
53664329
Chapter 6: Quantitatve
Methods in Health Care
Management
Notes
discarded
1
99227273
22
7=2 PM
27
2
34330400
30
4=11 AM
00
3
25601053
25
6=1 PM
01
4
36293078
29
3=10 AM
07
5
61529058
15
2=9 AM
05
6
56072460
07
2=9 AM
46
77658452
discarded
83397806
discarded
7
41697527
16
9=4 PM
52
8
97271339
27
1=8 AM
33
39337813
discarded
75852472
discarded
9
35183489
18
3=10 AM
48
10
08589156
08
5=12 PM
15
Yasar A. Ozcan
38
Table 6.8 Final Work Sampling Schedule
Chapter 6: Quantitatve
Methods in Health Care
Management
Observation
Day
Time
18
04
8:28 AM
17
04
9:21 AM
13
07
8:04 AM
6
07
9:46 AM
10
08
12:15 PM
14
10
2:36 PM
15
11
10:13 AM
12
11
4:08 PM
16
12
11:42 AM
5
15
9:05 AM
7
16
4:52 PM
9
18
10:48 AM
11
19
12:08 PM
1
22
2:27 PM
3
25
1:01 PM
20
26
2:14 PM
8
27
8:33 AM
19
27
1:59 PM
4
29
10:07 AM
Yasar A. Ozcan
39
Table 6.4 Abridged Patient Care Tasks in a Nursing Unit
Professional
Patient Care Tasks
NonProfessional
Direct
1. Ace bandage application
*
*
2. Admit – patient orientation
*
*
3. Assist to/from bed, chair
*
*
4. Bed bath
*
5. Bed change – empty
6. Bed change - occupied
*
*
7. Bed pan
*
*
*
*
8. Blood pressure
*
*
9. Catheterization of bladder
*
*
10. Census count
Chapter 6: Quantitatve
Methods in Health Care
Management
*
Yasar A. Ozcan
Indirect
*
40
Table 6.5 Work Sampling Data Collection Form for Nursing Unit
Unit: 4 West
Observed
Staff
Name& Title
Observer: CL
Prof.
Direct
G. Smith, RN
√
V. Black, RN
√
NonProf.
Direct
Prof.
Indirect
Non-Prof.
Indirect
Shift: AM
Time: 10:04
In Communication with
Patient
Staff
Physician
On
Break
√
√
√
E. Mason, RN
√
Z. Sander, RN
P. Bills, RN
Date: 11/02/05
√
Chapter 6: Quantitatve
Methods in Health Care
Management
√
Yasar A. Ozcan
41
Work Sampling Steps
4) Take observations, and re-compute the
desired sample size several times if initial
estimates are not reliable
5) Determine the estimated proportion of time
spent on specified activity
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
42
Advantages of Work Sampling
Observations less susceptible to short
term fluctuations
 Little or no work disruption
 Workers are less resentful
 Less costly and time-consuming
 Many studies can be conducted
simultaneously
 Useful for non-repetitive tasks

Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
43
Disadvantages of Work Sampling
Less detail on elements/tasks of a job
 Workers may alter patterns
 Often no record of method used by worker
 Observers may fail to adhere to random
observation schedule
 Not useful for short, repetitive tasks
 Much time required to move from
observation area to observation area to
ensure randomness

Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
44
Nobody likes to do things the hard way!
Work Simplification


Work Simplification-- process of changing work
methods:
– Eliminate unnecessary parts of work
– Combine and rearrange parts of work
– Simplify work when possible
Work Simplification Tools
– Flow Chart
– Work Distribution Chart
– Flow Process Chart
– Layout Chart
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
45
Figure 6.4 Commonly Used
Flow Chart Symbols
Start/Terminate
On page connector
Off page connector
Process
Decision
Preparation
Chapter 6: Quantitatve
Methods in Health Care
Management
Document
Manual
Operation
Yasar A. Ozcan
46
Figure 6.5 Flow Chart for Emergency Room Specimen Processing
Initial Process
After Improvement
Patient
Entry
Patient
Entry
Triage:
need blood?
No
Triage:
need blood?
end
No
end
Yes
Nurse draws
blood
Nurse draws
blood
MD orders
lab
MD orders
lab
IS order
entry
IS entry
label & package
Label &
package
Lab
Verification
Accession &
analysis
Results
arrive in ER
(end)
Lab
Accession &
analysis
IS double
entry
MD
Chapter 6: Quantitatve
terminates
Methods in Health Care
lab order
Management
(end)
Yasar A. Ozcan
47
The Work Distribution Chart



Shows what a department does to identify
each of its major activities and to pinpoint the
contribution of each employee to those
activities
Must be specific!
Spotting Trouble
– Which activities consume the most time?
– Are tasks evenly distributed?
– Is there under-specialization?
– Are employees assigned too many unrelated
tasks?
– Are talents utilized efficiently?
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
48
Table 6.9 Partial Work Distribution Chart for Nursing Unit
Activity
Hours
Nurse Manager
Hours
Patient admissions
12
Coordination with
Admissions Dept.
8
Communications
16
Physicians and
patient family
8
Patient family
4
Direct patient care
48
8
Medication
administration
20
Indirect patient care
16
4
Meals
6
Discharge planning
14
2
Scheduling & Adm.
4
4
Miscellaneous
10
TOTAL
120
Chapter 6: Quantitatve
Methods in Health Care
Management
Monitor charts
Supervisory
meeting
Sessions with
trainees
4
2
Nurse I
Hour
s
Nurse II
2
Emergency
coverage
40
Yasar A. Ozcan
Hour
s
2
Patient family
4
20
Update Charts
6
6
6
2
2
40
40
49
Flow Process Chart


Records a procedure in a graphic form, using a
sort of shorthand to simplify and unify the
record
– Ensures every significant detail of the work
process in its proper sequence is recorded
– Highlights inconsistencies and redundancies
Can eliminate, combine, change (sequence,
place, person), or improve activities
Operation
Move
Chapter 6: Quantitatve
Methods in Health Care
Management
Inspect
Store
Delay
Yasar A. Ozcan
50
Figure 6.3 Flow Process Chart for Emergency Room Specimen Processing
OPERATION
MOVE
INSPECT
DELAY
Patient Entry
Triage
RN draws blood
Specimen waits for MD order
Order entry
Label and package
Sent to lab
Accessioning process
Lab analysis
Verification by lab/IS entry
S e n t to E R
MD terminates lab order
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
51
Now the important part!
Worker Compensation


Compensation schemes:
– Time based-- most common in healthcare
– Output based-- more difficult to
operationalize, yet pay is related to efforts
Incentive Systems
– Profit sharing plans-- receive % of profits
– Gain sharing plans-- receive a % of the
value (i.e., cost savings) realized through
increases in productivity
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
52
The End
Chapter 6: Quantitatve
Methods in Health Care
Management
Yasar A. Ozcan
53