BUILD YOUR OWN HIGH PERFORMING HEALTHCARE ORGANISATION:
THE ACCOUNTABLE ORGANISATION:
A TRIBUTE TO THE WORK OF WILLIAM A KRICKER
SECTION 3: OPERATIONAL PLANNING
CHAPTER 9: CAPACITY MANAGEMENT
Table of Contents
BUILD YOUR OWN HIGH PERFORMING HEALTHCARE ORGANISATION: .......................................................................................................... 1
THE ACCOUNTABLE ORGANISATION: ............................................................................................................................................................ 1
A TRIBUTE TO THE WORK OF WILLIAM A KRICKER ......................................................................................................................................... 1
SECTION 3: OPERATIONAL PLANNING .......................................................................................................................................................... 1
CHAPTER 9: CAPACITY MANAGEMENT ......................................................................................................................................................... 1
CAPACITY MANAGEMENT: ........................................................................................................................................................................... 8
INTRODUCTION TO CAPACITY MANAGEMENT .............................................................................................................................................. 8
MANY WAYS TO SKIN A CAT ......................................................................................................................................................................... 8
HANDS ON! .................................................................................................................................................................................................. 8
JAPANESE OR AMERICAN ............................................................................................................................................................................. 8
CAPACITY PLANNING PARAMETERS .............................................................................................................................................................. 9
SIMPLE OR COARSE MASTER CAPACITY PLANNING ....................................................................................................................................... 9
COUNTING ................................................................................................................................................................................................... 9
COUNTING SPACES..................................................................................................................................................................................... 10
COUNTING LENGTH OF STAY ...................................................................................................................................................................... 10
CLASSIFYING CAPACITY .............................................................................................................................................................................. 10
WHAT ARE YOUR CLASSES OF CAPACITY? ................................................................................................................................................... 10
CAPACITY AS A TYPE OF WARD OR FACILITY ............................................................................................................................................... 10
CAPACITY CLASSIFICATION ......................................................................................................................................................................... 10
DEFINITIONS .............................................................................................................................................................................................. 10
ADULT GENERAL ........................................................................................................................................................................................ 10
CHILDREN GENERAL ................................................................................................................................................................................... 10
DAY ........................................................................................................................................................................................................... 10
SPECIALITY ................................................................................................................................................................................................. 11
OUTSOURCED ............................................................................................................................................................................................ 11
TRANSIT..................................................................................................................................................................................................... 11
SUB-CLASSES OF CAPACITY: THE I WANT TO KNOW ABOUT MY OWN WARD SECTION ! ............................................................................... 11
CAPACITY ACCORDING TO AGE ................................................................................................................................................................... 12
FROM PERFORMANCE PLAN TO CAPACITY PLAN AND BACK ........................................................................................................................ 12
UTILISATION: THE DIFFERENCE BETWEEN SUPPLY AND DEMAND ............................................................................................................... 13
CAPACITY DEMAND.................................................................................................................................................................................... 13
CAPACITY TO BE SUPPLIED ......................................................................................................................................................................... 13
WHERE SHOULD THIS CAPACITY BE DELIVERED? ......................................................................................................................................... 14
WRAPPING UP SUPPLY AND DEMAND ........................................................................................................................................................ 14
DEMAND AND SUPPLY ............................................................................................................................................................................... 14
DEMAND AND SUPPLY IN REAL NUMBERS .................................................................................................................................................. 14
RECORDING THE RULES AND THE PROCEDURES .......................................................................................................................................... 16
DECIDING WHERE TO DELIVER THE PLANNED BED DAYS.............................................................................................................................. 16
THE STRUCTURE AND GOVERNANCE OF THE SYSTEM: MEDICAL AND NURSING CLINICAL UNITS................................................................... 16
A TOLERANCE FOR OUTLIERS – PATIENTS IN THE WRONG WARD ! .............................................................................................................. 17
ALL NURSES ARE DIFFERENT: MOST NURSES ARE THE SAME........................................................................................................................ 17
ECONOMICS............................................................................................................................................................................................... 17
THE RULES ABOUT BED MANAGEMENT IN RELATIONSHIP TO CAPACITY PLANNING ..................................................................................... 17
CAPACITY MAXIMISATION STRATEGIES ...................................................................................................................................................... 18
STRATEGY 1: IDENTIFY OUTLIERS THROUGH BENCHMARKING – THEN DO SOMETHING ABOUT THE PROBLEM ............................................ 18
HOW TO BENCHMARK BED DAY AND CAPACITY PERFORMANCE ................................................................................................................. 18
GOOD ........................................................................................................................................................................................................ 18
HEALTH INDICATORS OF GOOD FOR INPATIENTS ........................................................................................................................................ 19
THE HEALTH ROUNDTABLE AND GOOD ....................................................................................................................................................... 19
MEASUREMENT PROCESS FOR ALOS ........................................................................................................................................................... 19
MEASUREMENT PROCESS FOR SAME DAY ADMISSION PERCENTAGE ........................................................................................................... 19
THE HEALTH ROUNDTABLE AND THE ROSETTA STONE................................................................................................................................. 19
THE IMPLICATIONS FOR OPERATING AT THE ALOS BRONZE LEVEL ............................................................................................................... 20
A WORD OF WARNING ............................................................................................................................................................................... 20
STRATEGY 2: STRANDED PATIENTS: THE 5:30 RULE ..................................................................................................................................... 20
PUSHING SICK PATIENTS OUT OF HOSPITAL CANT BE RIGHT!....................................................................................................................... 20
ANALYSING THE DATA - FINDING THE PATIENTS ......................................................................................................................................... 21
21 DAYS ..................................................................................................................................................................................................... 21
REPORT : SEQ 13010 WAIKATO HOSPITAL GENERAL PATIENTS BY LOS FOR ALL FOR FISCAL YEAR 2008 V1.XLS .............................................. 21
AGE PROFILE FOR EPISODES WHERE LOS>22 ............................................................................................................................................... 21
IN SUMMARY............................................................................................................................................................................................. 22
EXCESS GENERAL BEDS AS A FUNCTION OF LOS........................................................................................................................................... 22
SO ............................................................................................................................................................................................................. 22
EXCESS BED DAYS ANALYSED BY DISCHARGE UNIT ...................................................................................................................................... 22
IN THIS VIEW THE LONG LOS EPISODES HAVE BEEN SORTED BY DISCHARGE UNIT BY AGE ............................................................................ 22
FURTHER ANALYSIS .................................................................................................................................................................................... 22
IT IS OF COURSE POSSIBLE TO ANALYSE THE LONG STAY PATIENTS BY A VARIETY OF PARAMETERS E.G........................................................ 22
DOING SOMETHING ABOUT STRANDED (LONG STAY) PATIENTS .................................................................................................................. 25
THE OPPORTUNITY..................................................................................................................................................................................... 25
THE BENEFITS OF MANAGING THE STRANDED PATIENT RISK ....................................................................................................................... 25
IMPLEMENTATION: THERE ARE 12 TASKS TO BE PERFORMED...................................................................................................................... 25
RECOGNISE THE ORGANISATIONAL INVESTMENT REQUIRED ....................................................................................................................... 26
SENIOR MANAGEMENT AND SENIOR CLINICAL STAFF MUST UNDERSTAND THAT THE STRANDED PATIENT IS A MAJOR ISSUE . IT IS A ......... 26
PROFESSIONAL IMPLEMENTATION ............................................................................................................................................................. 26
THIS IS A SIGNIFICANT TASK WITH MAJOR BENEFITS ................................................................................................................................... 26
ESTABLISH A RISK MANAGEMENT UNIT ...................................................................................................................................................... 26
IDENTIFY ALL STRANDED PATIENTS............................................................................................................................................................. 27
EVERY STRANDED PATIENT NEEDS TO BE KNOWN AND RESCUED ................................................................................................................ 27
MEASURE THE RISK .................................................................................................................................................................................... 27
THE RISK MUST BE MEASURED DAILY, FOR A GIVEN CARE TYPE AND FORM PART OF THE DAILY OPERATIONS REPORT: FOR EXAMPLE ......... 27
ACTIVELY MANAGE ALL STRANDED PATIENTS ............................................................................................................................................. 27
THIS WILL NEED TO BE DONE PROMPTLY BY AN APPROPRIATE CLINICAL SPECIALIST & THE RMU ................................................................. 27
UNDERSTAND THE RISK .............................................................................................................................................................................. 27
USE THE STRANDED PATIENT REGISTRY TO IDENTIFY THE RISK FACTORS ..................................................................................................... 28
EARLY IDENTIFICATION - SCREENING .......................................................................................................................................................... 28
PREVENTION .............................................................................................................................................................................................. 28
PATIENT STATUS VISIBILITY ........................................................................................................................................................................ 28
ANY PATIENT WHO HAS BEEN IN HOSPITAL FOR 21 DAYS............................................................................................................................ 29
CAPTURE THE BENEFITS.............................................................................................................................................................................. 29
WIDEN THE SCOPE ..................................................................................................................................................................................... 29
LONG STAY PATIENTS AND CAPACITY PLANNING ........................................................................................................................................ 29
COMMUNITY STRANDED PATIENTS ............................................................................................................................................................ 29
STRANDED IN THE COMMUNITY ................................................................................................................................................................. 30
STRATEGY 3: FACILITY CAPACITY MAXIMISATION- BEST FIT CAPACITY PLAN TO FACILITY CONFIGURATION .................................................. 30
STRATEGY 4: RUN YOUR TWO BUSINESSES WELL - INVEST IN PROCESSORS NOT IN-HOSPITAL QUEUES ....................................................... 31
WHAT ARE WE TRYING TO DO? .................................................................................................................................................................. 31
ACUTE OR EMERGENCY CARE ..................................................................................................................................................................... 32
ELECTIVE OR SCHEDULED CARE................................................................................................................................................................... 32
SO WHAT? ................................................................................................................................................................................................. 33
KEY PERFORMANCE INDICATORS................................................................................................................................................................ 33
ACUTE: ...................................................................................................................................................................................................... 33
ELECTIVE: ................................................................................................................................................................................................... 33
AN EXAMPLE.............................................................................................................................................................................................. 34
SUMMARY: RUNNING TWO BUSINESSES .................................................................................................................................................... 34
HOW DO YOU BALANCE THE NEEDS OF TWO DIFFERENT BUSINESSES IN ONE BUILDING? ............................................................................ 36
STRATEGY 5: RE-ORGANISE ACUTE SERVICES AND DON’T ADMIT PEOPLE UNNECESSARILY.......................................................................... 36
WARNING! THIS SECTION IS WISHFUL THINKING, AN INDULGENCE BY THE AUTHOR AND NOT REALLY THAT HELPFUL – YET! ...................... 36
STOP PEOPLE COMING TO HOSPITAL – SHOULD WE? .................................................................................................................................. 36
THE RE-ORGANISATION OF ACUTE SERVICES ............................................................................................................................................... 36
STRATEGY 6: EFFECTIVE SCHEDULING AND CO-ORDINATED DAILY OPERATIONS ......................................................................................... 36
WHAT DOES NOT WORK! ........................................................................................................................................................................... 36
EARLY DISCHARGES: DISCHARGE BEFORE MIDDAY! ..................................................................................................................................... 36
PATIENT JOURNEY PROJECTS ...................................................................................................................................................................... 37
NURSE INITIATED OR NURSE LED DISCHARGE ............................................................................................................................................. 37
BUT DISCHARGE PLANNING IS GOOD – MAYBE! .......................................................................................................................................... 37
PERFORMANCE MANAGEMENT AND REPORTING - CAPACITY ..................................................................................................................... 37
CREATING A CAPACITY UTILISATION PLAN AND STICKING TO IT .................................................................................................................. 37
STARTING THE CONVERSATION (OR NEGOTIATION) .................................................................................................................................... 37
THE STORY SO FAR ..................................................................................................................................................................................... 37
CLINICAL ENGAGEMENT ............................................................................................................................................................................. 39
HOW DOES THE NEGOTIATION PROGRESS? ................................................................................................................................................ 39
PLANNING OPERATIONAL MEETINGS.......................................................................................................................................................... 39
NEGOTIATING ............................................................................................................................................................................................ 40
REMINDER ................................................................................................................................................................................................. 40
GOVERNANCE PRINCIPLES .......................................................................................................................................................................... 40
PLANNING, REPORTING AND VARIANCE MANAGEMENT ............................................................................................................................. 40
SCHEDULING .............................................................................................................................................................................................. 41
NATURAL VARIATION ................................................................................................................................................................................. 42
ARTIFICIAL VARIATION ............................................................................................................................................................................... 42
ACUTE ADMISSIONS ................................................................................................................................................................................... 43
ELECTIVE ADMISSIONS ............................................................................................................................................................................... 43
WEEKEND PATIENT DISCHARGES ................................................................................................................................................................ 43
BOOK AND HOPE ....................................................................................................................................................................................... 44
HEALTHCARE BUSINESS KPI’S ..................................................................................................................................................................... 44
BOOK AND HOPE, AND CHAOS ................................................................................................................................................................... 44
SCHEDULING: TAKING THE COWARD’S WAY OUT ........................................................................................................................................ 45
CO-ORDINATED OPERATIONAL RESPONSE .................................................................................................................................................. 45
ANSWERS TO CHAPTER 7............................................................................................................................................................................ 46
REMEMBER................................................................................................................................................................................................ 46
Capacity Management:
Introduction to Capacity Management
Capacity is a word that describes the potential to do something. In healthcare management it describes the people you have, the
buildings and equipment available to them and the flow of substrate (yes I mean patients and the way they arrive, move through the
system and exit). As usual though we need to talk about what we are talking about, before we can talk about it.
Many Ways to Skin a Cat
If patients were not considered a special category, in other words they were widgets, motor cars, electronic devices or any other
product you wish to mention, then we would be expected to avail ourselves of all sorts of knowledge and practice, commonly called
operations management. We would be expected to understand globally standardised concepts like inventory, work in progress, lead
time, bill of materials, and as managers we would also be expected to belong to one or more schools of thought on how best to manage
these situations, from TOC (theory of constraints) to the more statistical six sigma approaches favoured in the USA.
To be fair, some institutions, like the Institute for Healthcare Improvement, have tried to lead us in the direction of adopting these
approaches, but really healthcare management is a unique case because the people who try to learn these techniques are largely at the
bottom of the food chain, and are easily overruled by the clinical staff. In blunt terms one group is not a revered profession
(management) and the other is.
I am always amused by the irrational way in which we think that because patients are people, we should not use what every
manufacturing industry has spent centuries learning. We should abandon all the knowledge that goes into making you car safe, your
flight in an aeroplane safer than going to hospital…….I could go on but you see where I am going. It is an emotive and false argument
to suggest that people are more important than things, so that we cannot use the knowledge we developed to make things safe for
people. Crazy!
Hands On!
Of all the operations management clans, I like the TOC practitioners the most. In general they want to start doing something today,
see if it works tomorrow, and make the next change the day after. This means you must be present on the floor, you must know what is
going on, you must understand what you see in front of you, and you must have a skill set that allows you to interpret the chaos in front
of you so that the consequences of the next thing you do can be interpreted in some meaningful way. Not surprisingly this methodology
is not available to senior healthcare management.
If there is one thing that consistently comes out of the mouths of operations TOC practitioners, it is that healthcare capital
investment is going in the wrong direction. This is an interesting ideological standpoint. In real terms we are building ever bigger
buildings because we think that is capacity. Emergency Department are the usual case in point. “We” are building them double the size
and perhaps achieving a 30% increase in throughput. TOC practitioners look at this and are appalled. Their view: build it half the size
and double the throughput! You can see how far apart our worlds are.
It is worth mentioning though that the first thing that must change is the attention of management. When the TOC community got
together in 2012, the subject of their conference was management inattention: in other words, we are not paying attention to our core
activity which is what is happening on the production line. If you are not sure where that is, go and find anywhere there are patients
piled up and work out what they are waiting for. Congratulations you have found the constraint now solve it. And yes I mean you, the
Chief Executive or Chief Operating Officer, I don’t mean some poor person with no authority employed 5 levels of managent down from
you to insulate you from the “noise”.
Things might have changed now, but as a conscientious objector trainee, when I was a student and a junior doctor I worked at the
blacks only” Baragwanath Hospital in South Africa, one of the busiest in the world. I did not realise at the time that they had the smallest
and most efficient Emergence Department known to man. Their length of stay would have been measured in minutes, not hours, and
their staff on duty could not have been more than four or five in total. Physically the department was a set of desks either side of the
entrance through which people were assigned to the department they needed to get to, they were dispatched with no delay. Brilliant,
efficient, effective! I can only imagine the confusion that would have ensued if someone had turned up and tried to explain that we were
now going to try an meet a four or six hour target. I am sure that it must have been changed by now to more closely represent some
model dominated by some professional college or other’s view of what should happen in order to provide a satisfying and fulfilling life for
their members – but I digress, I was talking about what was good for patients for a moment and got carried away.
I am not going to try and teach anyone anything about theory of constraints or hands-on operational management, there are far
better proponents of these disciplines if you want to find out more. Anything by Goldratt would be a good start.
Japanese or American
Instead I am going to try and demonstrate the complimentary discipline to TOC, which largely consists operational planning, and yes
you guessed it, carrying out that plan. This section will cover the capacity component of the operational plan, and related topics.
I make this artificial divide of Japanese versus American to illustrate, using two artificial generalisations, the discipline we are going
to pursue.
The American approach largely consists of expediting . If you don’t organise to do what you need to do, and you don’t have robust
systems, then you need to constantly provide alternative arrangements to make the system function better wherever it breaks down.
To give you an example, in 2009 I went to look at how the “new” Alfred elective centre was operating, and I thought how clever it
was that they had separated their acute and elective care streams, and at the front end had arranged their booking clerks and specialist
co-ordinating nurses to work together. Counties-Manakau District Health Board had done something similar years before on a larger
scale with less fanfare and advertising. This represents organising your capacity. Many other institutions have people with similar role
descriptions who have been put in place to try and help patients negotiate the system, or to rescue them when they got lost in the
cracks: this second way of working is expediting.
In the early 1990’s and then 2000’s mapping patient pathways and journeys became popular, and everybody was doing it. It is an
interesting proposition, because taken to its logical conclusion, health systems would have to have been completely re-cast to suit the
patient. It never was, and it is not now happening, although I am sure some changes were made and might be made in future. As you
will know from my comments elsewhere, the predominant organisational arrangement is that of professional divisions/departments:
these arrangements persist because it suits doctors, and to a lesser extent nurses, not because it suits patients.
In this section we are not going to take the American approach, instead we are going to be Japanese. We are going to assume that,
as described elsewhere we organising to do what needs to be done, and we will plan to have available the required capacity to deliver
that plan.
One last note before jumping in, although capacity is largely a function of people doing work, we will deal with staffing in the section
dedicated to staffing. Naturally we will cross the line between the relevant sections from time to time.
Capacity Planning Parameters
The management of capacity happens in three phases.

Master Capacity Planning

Scheduling

Short term co-ordinated response
Master capacity planning is the consideration of the total amount of capacity you will need to deal with a given period of time, usually
a six or twelve month period.
Scheduling has a shorter horizon, usually weeks to months, and is concerned with making sure that you have the capacity you need
on a given day, at a given time, in a given place.
Short term response is what it says it is, it is the best response you can make in real time based on the plan, and the failure of that
plan to deal with expected demand, or indeed with unexpected demand.
Simple or Coarse Master Capacity Planning
Given everything I have said so far, it is clear that capacity is not just bed days, or the number of beds in a ward, or the number of
wards. However rather than wax on about the theoretical side of capacity planning in its fullest extent, lets deal with something we
battle with everyday, and which occupies hospital managements waking hours.
Beds are the emotive subject in hospitals, bed days are the measure of capacity, length of stay is the measure of how many days
are being used.
Counting
In the chapter on operational planning we considered the importance of counting and the development of a performance profile, and
then a performance plan.
Exercise 7.1: Take the performance plan you developed and do the following:
Break the performance plan down so that you have one for each clinical unit: a list of types of episodes of service to be delivered for
each clinical program by each clinical unit.
For the multi-day episodes of care, complete the performance plan set of three parameters: episodes of care, length of stay, and
bed days required.
If you are just starting out, this is your first time doing this, pick one area: the area you are responsible for, or if you are a senior
manager accountable for a number of areas, pick one clinical unit (usually something simple like orthopaedics).
Counting Spaces
Before going any further, you now need to count what spaces you have: how many beds, chairs, day clinic chairs, dialysis chairs,
the whole thing.
I found the best way to do this was to draw a map and show where everything is. In advanced systems, you may have an electronic
system that shows you where useable beds are and who is in them. If you do, then good for you, but I recommend you go through this
process of counting anyway.
Exercise 7.2: Classify and then count all the spaces you have that could be used for patient care tomorrow if required. At this stage
you are not worrying about your ability to staff the space, just the physical space and its readiness for use. (as an aside, you may find in
your institution a whole lot of patient care spaces have been converted to offices and other things over time, as a secondary exercise
you ought to include that in your inventory as a category – could be used in 3 months etc).
Counting Length Of Stay
Exercise 7.3: How Does the Organisation You Work in Calculate length of stay? Don’t make any assumptions, actually find out and
document the allocation rules!

Is length of stay calculated as midnight census (which is a problem) or is it calculated on date and time of discharge –
date and time of admission (which is more useful).

Does your organisation use statistical discharges as an administrative practice?

Does your patient administration system allow counting of days spent in each place individually, or does it lump the
whole stay onto the last ward the person was in?

You need to know the rules and how they are applied in detail.
In order to have any chance of planning bed day capacity in any useful way, you need to know the actual length of stay in days,
hours and minutes, and you need to be able to ascribe each part of that length of stay to each place that it occurred.
Classifying Capacity
What are your classes of capacity?
This questions is a bit ambiguous, so lets look at a couple of different meanings. Classes of capacity, could be a bed, a chair, single
rooms, multi-bed rooms etc.
In the second sense of the word, it could mean: what do you use the capacity for, adult inpatients, children, adolescents,
rehabilitation, palliative care etc.
There is a third extrapolation, which is what clinicians immediately focus on, that is the capacity for each clinical unit; their home
wards, which immediately leads to that age old conundrum, “outliers” (otherwise known as a patient in the wrong ward!).
Capacity as a Type of Ward or Facility
Capacity Classification
For planning purposes the Waikato Hospital capacity was classified as follows
AG Adult General

CG

D
Day

S
Special

O
Outsourced

T
Transit

?
Queries

Z
End Dated (for areas in the patient administration system that were obsolete.
Child General
Definitions
Adult General

General Wards that can be used for a variety of multi day purposes. High flexibility for Adult multi day patients
Children General

General Children’s Wards that can be used for a variety of child related multi day purposes. The specialisation of the
capacity relates to staff and infrastructure. High flexibility for young multi day patients
Day

Specialised day capacity compared to multi day capacity
Speciality

Speciality capacity that is required for specific patients and cannot be used easily for other patients. i.e. of low flexibility
(for example an eye examination room with fixed equipment)
Outsourced

Patients treated elsewhere on behalf of your service
Transit

A Transit lounge or similar
Exercise 7.4: Try and replicate the table below for your organisation or the area that you are accountable for, which sets out the
capacity utilised for each class of capacity set out above.
Exercise 7.5: When the above report was run, for the sake of version control, the query script for the report the table came from was
as follows: “Details are shown in the Report Seq 8004 WK_4 WK Waikato Hospital Actual Vols, Bed Days and AvLOS by LAST
TREATMENT WARD for FY 2008.xls- - Sheet 2” Where did the data for your report come from, could you run the report again, and
get the same numbers, who would vouch for the report. If this was a bottle of Grange Hermitage, could you provided proof of cellaring
and storage temperature: what is its provenance?
Sub-Classes of Capacity: The I want to Know About my Own Ward Section !
It should be obvious by now that the approach we have taken to capacity has been to come up with a general classification, then
look at what is in the system that we are using for patient administration, then align the two.
What we did not do, which is what most people are occupied with, is some sort of bunfight about how many beds the surgeons get,
or dealing with the loudest shouter, or most charismatic cardiologist.
i.e. In the table above there is a column “number of listings, within this column is all the capacity counted in that category for which a
listing appeared in the patient administration system.
At this stage I wont go into specific capacity related to each type of specialty, but I will return to this when after we have discussed a
few more general principles.
Capacity According to Age
A further view we developed which was useful for resolving allocation issues, but which we did not find all that useful in performance
planning, is capacity required by age group.
I would encourage you to develop this view of your capacity as a sense check of how you are allocating you capacity. You may want to
develop a separate category for the very old.
From Performance Plan to Capacity Plan and Back
Remember in the section on operational planning we focussed on a performance plan that stipulated how many episodes of a given
type were to be delivered in each clinical program by various clinical units.
So the next question is: how much capacity will we need to be able to deliver that performance plan. Do we have enough now?
What changes will we have to make, if any1, in order to accommodate the performance plan.
Exercise 7.6: In the first exercise in this chapter you got your performance plan for one clinical unit (? orthopaedics) ready to work
with. If for arguments sake you needed to admit 10 000 multi-day patients for your orthopaedics unit to look after, and they had an
average length of stay of 5 days, what capacity do you need to provide in the orthopaedic wards for these patients?
Utilisation: The Difference Between Supply and Demand
So far we have talked about the number of bed days (or any other capacity measure) required, but what I actually mean is occupied
bed days, which is not the same as supplied bed days.
How often have you seen a hospital at >100% capacity. It is not possible. You may have more patients than you planned, but you
cannot be over a 100% capacity – which capacity do you mean? Maximum, planned, hoped for? Actually I gave jumped ahead to coordinated response on the day. Back to serious work then.
At this point we need to decide what utilisation we want our facility to run at.
Exercise 7.7: For each of your classes of capacity, decide what utilisation you think you should run at. You might want to think
about the following:

Age

Degree of illness

Acute or elective care streams
What you have decided in this exercise must be recorded for future planning, as you will see in the next sections.
Capacity Demand
So to be clear, the capacity demand is the episodes of care planned (in the performance plan part of the operational plan),which can
be aggregated into clinical programs (acute/emergency, elective etc) or broken down to individual clinical units (eg: orthopaedics).
In the appendices to this book you will find an excel sheet called little monster (not by mistake), below is an excerpt of that
spreadsheet with a sample of demand by clinical unit2:
Again to be clear, the bed days in this forecast, in other words the plan, are not assigned to any geographical area, these bed days
are what the patients looked after (more accurately discharged by) the clinical unit listed, will require.
Capacity to Be Supplied
1
Remember, usually your organisation is just doing what it is doing, using what it has. In most years nothing changes, so reassuringly you will
have enough capacity to do what you are doing. Of course if you want to do something different – well it could get interesting.
2
There are commercial companies that will do a lot of this work for you, but you ought to know what you are asking them to do, or at least know
what they are asking you when they give you a choice. By all means get someone else to help you but that does not excuse you from knowing how
to do your own job.
Demand is a function of medical staff behaviour, capacity supply, when it comes to inpatient bed days at least, is a function of
nursing management. So it follows that the capacity required to be supplied
= the last years episodes  % utilisation  % change planned or forecast.
So for argument sake if you want to allow the medical staff to admit 10 000 patient episodes, with an average length of stay for
multi-day patients of say 5 days, and an average utilisation of 90%, and with no planned change in practice, then the number of bed
days to be supplied for this clinical unit would need to be
= 10 000 bed days  90% utilisation of beds  100% of current practice
= 10 000  1.1  1.0
= 11 000 bed days
Where Should this Capacity Be Delivered?
Note: We now have some idea of the number of bed days that need to be delivered to look after the patients that we are planning to
admit under the clinical unit called orthopaedics.
Exercise 7.8: Where do you think the capacity required to be delivered for the orthopaedic clinical unit to look after its patients,
should be supplied?
Wrapping Up Supply and Demand
So far we have talked about counting and classifying capacity and translating the performance plan into a view of how many bed
days (for example) we will need to supply. I wanted to go over two things again before moving on:
Demand and Supply
The demand and supply concept is important: remember we are constructing a plan and will need to report against that plan to
medical staff (demand) and nursing staff (supply). Both parties need to understand their roles, and also the things that will affect
whether they can deliver the plan, some of which we will go into in detail later: i.e.
Demand and Supply in Real Numbers
After you have followed this process, you end up with something like the table below, which contains the capacity which is forecast
to be required, in bed days, for each clinical unit according to the clinical program the patients will present in. . In other words, capacity
demand.
In order for the wards to be able to manage the patients in and out, we decided that we should have a utilisation of 85% on average
for emergency/acute patients, and 95% for elective patients.
So that we don’t exceed this utilisation on average, we therefore must plan to provide staffed beds to supply bed days at 115% 0f
demand for acute beds and 105% of demand for elective beds.
i.e. The plan will look something like this:
Right, so for example we will need to find some way of staffing 15,501 bed days to accommodate the cardiology patients3. This
number will translate into a number of staffed beds required, which may vary across a year, or at a given time of the year (like
Christmas).
Mismatch between Facility and Activity
If one takes the approach that you are going to production plan using the operational plan as the starting point, you have a fact
based approach to apportioning the capacity in your facility. In other words:

The operational plan quantifies the activity to be delivered in each service program by each clinical unit.

The activity component that is required to be delivered as multiday inpatient episodes should be reassessed and then a
length of stay be apportioned (ALOS).

The number of bed days the clinical unit will need, or is planned to need is the product of the number of inpatient
episodes, and the ALOS4.

The number of bed days to be supplied is the number of bed days planned to be used by the clinical units to treat
patients, modified for a desired utilisation.

The number of staffed beds required is the allocation of staffed bed days across a year phased for seasonal activity etc.

Where you provide those beds should be based on the ability to fit all the patients of a unit, or a cluster of units, into one
area (a ward or groups of wards), such that wards are used in the optimum size without opening or closing subsets of
beds in response ot demand or staffing shortages (close or open whole wards, not bits of wards).
You will no doubt be shaking your head at this moment thinking this nut must be mad, our doctors would go crazy if we tried to pull
this stunt. Well you may be right, but as demonstrated in the table above there was a ward full of medical patients in the surgical wards.
Everybody knew this, but until we set about building a capacity plan from the activity as a starting point, all we had was a feud between
medicine and surgery. No amount of intuitive or emotive argument could solve the argument, only a demonstration of competent
management5.
3
The table is part of a year to date report as part of performance management meetings, but more on that later, the principal would hold for a
whole year.
4
In the beginning you may have to accept historical ALOS for a clinical unit, but in time you should aim to take a more detailed approach using
ALOS for DRG episodes.
5
Of course before one randomly hands over a ward from one party to another it is best to have some idea of which group might be a problem in
terms of benchmarked ALOS. Later in this section you will work out how to do that.
Recording the Rules and the Procedures
Exercise 7.9: Part of the Discipline of Management is the Recording of the Operational Procedures used to do something. In this
exercise you are required to do two things:

Create a glossary of terms used in this section on capacity

Outline the Procedure used (or that will be used) to arrive at your “bed plan”.
Deciding Where to Deliver the Planned Bed Days
Deciding where to deliver the planned bed days is more than just a theoretical exercise, in fact it is one of the most hotly contested
issues in hospital life. Everybody wants their own ward, nobody wants anyone else’s patients in “their” ward, the doctors want the
nurses who look after “their” patients to be in their department/division, the nurses only want to report to nurses – it all gets ugly pretty
quickly. Some of the important considerations are the following, and you ought to make a serious decision about each of them, they are
not things that can be allowed to float along:
The Structure and Governance of the System: Medical and Nursing Clinical Units
The structure I chose to develop placed patients at the centre of the structure by making acute and elective services the only
“things” allowed to use the word service in their title. I gave these services visible managers and started to align RC’s critical to the
running of these services under these senior managers.
i.e.
Note that this structure was not the finished article, just the beginning of a change in emphasis.
The second focus of the structure was to align the clinical resources that operated in these services so that clinical units were
grouped around common patient problems, and nursing and medical staff groups for these aligned. i.e.
The purpose of aligning the groupings of resource in clinical units was that it allowed me to get the people involved with the care of
the same patients in the room without buying into a particular departmental or divisional organisation arrangement, which you know by
now I think is primitive anyway.
A Tolerance for Outliers – Patients in the Wrong Ward !
Exercise 7.10: What is an acceptable number of patients that can or should be looked after in a ward that is not their designated
home ward? Is it none, 5%, 10% or more?
This discussion is part philosophical, part economics.
All Nurses are Different: Most Nurses are the Same
Two of the smartest managers I have worked with, from opposite ends of the world, agreed on the same principle: that nurses are
mostly the same in terms of overall skills, and that most nurses should be able to look after most patients. In this scenario patients
should be able to be admitted to most wards (with obvious exceptions like children) with no adverse effects.
The opposite argument is posed by medical staff who argue strongly that patient care will be compromised unless the patient is in
the doctors home ward.
Economics
At one point we modelled the effects of adopting two polarised strategies, on the one hand we ruled that patients could only go to
the home ward of the admitting specialty, at the other end of the spectrum we ruled that patients could go to any ward, wherever there
was a bed. In a 600 bed major acute/elective hospital, the difference between the two models was about 100 beds. Clearly the answer
has to lie somewhere in between.
As a general rule if we could keep the outlier rate to about 10% on any given day we were about right. Initially medical staff were
unhappy about the absolute number that represented, but accepted the relative rate as reasonable over time. The compromise
arrangement we implemented was based on clusters. For instance patients should overflow initially to other wards in the same
department or clinical business unit (i.e. a grouping of clinical units on similar patient lines). So for example if the Opthalmology ward
exceeded its capacity, the patient would go to another specialty surgical unit, such as Ear Nose and Throat (ENT). If the surgical
specialty wards were full, the another surgical discipline would be nominated (eg: general surgery) and only if absolutely necessary then
a medical ward.
The Rules About Bed Management in Relationship to Capacity Planning
While I am alienating medical staff, it is time to go further.

Rule 1: The facility belongs to the system, and it should (all) be used to the maximum advantage of all (or the largest
number of) patients. No single unit or specialty will be said to own a ward in perpetuity.
In the Waikato Hospital in the late 1990’s virtually the entire complement of ENT surgeons reputedly resigned when a proposal was
approved to move them from their ward, into another arrangement. Management backed down, life carried on as usual until over a
decade later when we removed all children from adult wards to create a paediatric surgical ward. I am sure this is not an uncommon
scenario.

Rule 2: The capacity plan is the capacity plan and the facility should be episodically reallocated according to the plan.
i.e. once the number of care episodes per clinical program has been cast, and the contribution of each clinical unit
worked out, their bed day demand and the corresponding supply calculated, the facility (wards) should be reallocated so
as to best fit the requirements of the plan.
For many years there were between 25 and 30 medical patients in orthopaedic wards at the Waikato Hospital. Orthopaedic patients
were routinely having elective admissions cancelled for lack of space. The general physicians hated having their patients in surgical
wards, the orthopaedic patients hated having medical patients in their ward, they wanted them out. What to do? From a pragmatic
point of view we had to allocate more medical acute beds: their length of stay benchmarked against similar units was good. The
orthopaedic department length of stay was not good, particularly the pre-operative wait for access to emergency or acute surgery. The
trade off was more theatre time for orthopaedics and less ward space. A win-win based on a fact based approach to decision making.
More on this later.
Capacity Maximisation Strategies
Exercise 7.11: Before you start this section write down the things that you are doing to maximise the capacity you have to treat
people. Compare what you have written down with each of the suggestions that follow. How many did we have in common? What
other things are you doing – let me know.
In the process so far we have talked about taking the last year’s bed day utilisation and developing the next years plan: what things
can you do to modify the number of bed days required to deliver the same (or greater) performance plan.
I have put this section here because it is the transition from what we did before to doing something different, whatever that might be.
So what could we do that might be beneficial, that might increase productivity? Well here are some things you might consider, in no
particular order.
Strategy 1: Identify Outliers through Benchmarking – Then Do Something About the
Problem
This is a relatively orthodox method that can be useful but you need to do it in a disciplined way.
The theory is this: somebody somewhere else is dong something better than you are, so you ought to learn from them.
How to Benchmark Bed Day and Capacity Performance
There are a number of possible ways to do this, but the approach Bill Kricker took was to examine the relative performance of all the
members of the Australasian Health Roundtable and then to look for areas (DRG’s and clinical units) where we could (or should)
improve. The theme of this approach is: What does Good Look Like & What are the implications?
Good

Invariably most organisations aim to be Good

Many organisations know they have a problem, but few know what Good looks like

There is a need to have a clear idea of what Good looks like, if we are to steer an organisation towards Good

Good may take significant time to achieve. Often it is not something that will be achieved in 12 months

Good is not static. The good get better as time passes. Hence the concept of Best Practice is not realistic. What is Best
today, invariably will not be best tomorrow

Operational and capital investment decisions should be taken with a view to nudging the organisation towards - Good

What ever concepts are selected as indicators of Good, must be

Relevant at the organisational level

Simple

Few (Max 5)

Capable of being measured and benchmarked

Capable of being visited and seen

Capable of being communicated clearly to all stakeholders

A grouping that embraces the ideas of cost / effective, efficient, professional, minimal waste, good quality is frequently
used as an indicator of Good. Rarely is a good organisation sloppy and inefficient
Health Indicators of Good for inpatients
There is a tendency in Health to attempt manage a large number of Indicators and then argue over the second decimal place. This
must be avoided. Indicators that may be appropriate for - Stage 4 Lung Cancer are not appropriate for an Organisation. Two basic
indicators of Good, which would meet the above requirements, at a DRG level are:

The Average Length of Stay (ALOS) for all patients

The same day admissions percentage (SD %) for all patients
Exercise 7.12: These are interesting measures to propose as quality indicators, more often they are viewed as operational
efficiency targets, what do you think?
The Health Roundtable and Good
The HRT has a very large volume of data that allows benchmarking between the major public hospitals in Australia and New
Zealand (40+). Using this data, the first indicator to be measured is the ALOS by DRG for all inpatients
Measurement Process for ALOS6

For each DRG and for each Hospital calculate the ALOS for 2006/2007

Rank the hospitals in terms of decreasing ALOS for each DRG where they had more than 10 episodes


The lowest ALOS is the Gold Medal standard

2ND lowest ALOS is the silver Medal standard

3rd lowest ALOS is the Bronze
For comparison purposes one should be compared to the third best (The Bronze medal winner). When case mix was
introduced to Victoria the comparison standard was the third best hospital

For each DRG, the saving in bed days for your organisation if the ALOS for the third hospital is used, is calculated

For each DRG, the ALOS at the gold, silver and bronze level is given

The total medal tally for each hospital has been calculated

The medal tally as a % of the DRG s at the Hospital is also calculated. Some hospitals may have more medal because
they are entered in more events (DRGs)

Note: These calculations have been done in bulk . It is likely that when each DRG is reviewed and utilised - - line by line
- - that there may be some slight changes . However the results provide a sound estimated of Good +/- 10%
The first part of the process tells you where your performance is most lacking, the second part of this benchmarking process is to
work out who to visit to get the maximum benefit.
I remember when we were learning to do this benchmarking that a number of the places we had been visiting up to that point,
mostly on the basis of their public profile (marketing) were in fact not that good when an objective measure was being used. One
should know what good is and where it is, and not just guess.
Measurement Process for Same Day Admission Percentage
 In principle the same process is followed.
The Health Roundtable and the Rosetta Stone
The downside of this approach is that one must belong to an organisation that can assist with benchmarking as most of the data
available is coded, and so one might have trouble working out who to visit. This is a good thing.
Exercise 7.13: This Exercise is not for the faint hearted. Join the Australasian Health Roundtable, or similar organisation (?), and
replicate the process described above. Wishful thinking I know, but if you cant do the exercise in a disciplined away then don’t do it, yu
are more likely to learn something you don’t want to, from a voluble enthusiast somewhere dangerous7.
6
The description of how this was done, and the mechanics of the calculation are included in the relevant appendix on capacity planning as notes
7
I keep making this comment, but I will make it again. Don’t worry if you cant do this first time around. If you are an organisation of any serious
46
size, it is going to take a minimum of three years to find competent help, and to get them lined up to do this work, which will require a number o
iterations. I know most organisations don’t think they have three years, which is why they struggle for decades.
The Implications for operating at the ALOS Bronze level
It is worth contemplating what this approach might yield, below is a table that was used to quantify what the Waikato Hospital might
save in bed days if it was performing as well as the third best performer for a given DRG, across all DRG’s
Target Rank 3
Current Bed Days and Episodes
Episodes Beddays
69,974
194,898
Savings Required to Reach Target if Lower
84,219
Resulting Bed days
110,679
Percent Reduction in Bed days Overall
43%
In other words to operate at the third best level on all DRGs would result in a reduction of 84,000 bed days, which is equivalent to
closing eight 30 bed wards.
At the time we were doing this exercise we were about to spend several hundred million dollars in campus redevelopment,
underwritten by a campus redevelopment plan that had no benefits realisation plan. The implications of this view of good, and how the
improvements could have been achieved, should have been reconciled with the Campus redevelopment plan, and could have
underwritten the increased operational costs that would flow from the campus redevelopment. In other words, any move in the direction
of good must have a plan to realise and capture the benefits
A Word of Warning
It is one thing to identify a DRG or a series of DRG’s where you could do better, but you are not entitled to enter a lower ALOS for a
DRG into a future capacity plan, unless one has a some idea in detail how one is going to get to that shorter ALOS. Just wishing it were
so, does not make it so.
Strategy 2: Stranded Patients: The 5:30 Rule
This approach has been supported by the Health Roundtable as the Long Stay Patient. The premise is simple, about 5% of patients
use over 30% of the bed days you supply in your hospital.
Pushing Sick Patients Out Of Hospital Cant Be Right!
Lets be clear. It is easy to read this section and then come to some crock argument that focussing on these poor patients is wrong,
and forcing them out of hospital is unethical just to force patients through a hospital quicker. This is Rubbish8.
You reduce the bed day utilisation by these patients by increasing the quality of their care at the time you find them, and by working
out how you can identify at risk patients early on.
In general most organisations struggle to ensure that all complications are coded. Underreporting appears to be an issue in Health,
but a quick review of the episodes with a LOS>21days indicates that at least 58% have complications coded to their care episode
record, and this is likely to be a gross under estimation.
You are likely to discover two types of issues:

Those patients who are complex and high risk, and who would benefit from earlier co-ordination of their care and
oversight of that care by someone who knows what they are doing, not a SOD9.

A variety of system issues which affect all the patients in the queue for them (inpatient radiology is a good example, so is
waiting to be seen by a rehabilitation specialist, waiting for theatre – waiting for anything)
You are likely to be able to help (change the length of stay) by:

Intervening even at a late stage in a single person’s care (for example going to see what is happening once a certain
length of stay is transgressed.

8
Placing extra supports around early identified patients
Some time ago the Health Round Table ran a workshop on long stay patients and their management. Part of the process involved a detailed
review of 16 cases by various clinicians and a discussion of the issues, at the end of the meeting there was general agreement that the majority of
long stay episodes reflected inappropriate clinical treatment at an early stage of the admission.
9
SOD stands for Single Organ Doctor: one who claims to have forgotten everything they ever know about any other part of medicine barr what
they are interested in or make money from.

Fixing whatever system issues you find
OK, now that I have that off my chest, lets get into capacity reduction strategies.
Analysing the Data - Finding the Patients
To start to address a number of issues, there is a need to determine the profile of long stay patients at your organisation, hospital
and to understand the reasons for those long stays. The matters that require this understanding are

The need to ensure effective utilisation of existing staffed beds, especially when bed capacity is tight.

To determine what the right allocation of capacity should be as care quality is increased.
21 Days
The first time this issue was looked, it seemed preposterous to suggest we look at patients who had been in hospital for three
weeks, but actually this number is about all you will be able to cope with initially.
An analysis of that group of multi day general patients where the LOS is significantly greater than average (say two or three times
greater), in the Waikato Hospital in 2008 looked as follows
Report : Seq 13010 Waikato Hospital General Patients by LOS for all for Fiscal Year 2008 V1.xls
What this shows, and I would put money on it being the same or worse in your hospital:

22% of the bed days are associated with episodes where the LOS > 20 days

978 episodes (2.3% of total episodes ) account for these 31,754 bed days
This kind of distribution happens virtually everywhere, at least 30% of all the bed days you provide are being consumed by a very
small number of patients.
Age profile for episodes where LOS>22
For 2007/2008 in the Waikato Hospital the age profile for all General Episodes where the LOS > 22 days was as follows:
Note: Rehabilitation episodes are not included

(Column 4) Standard Bed Days : If all episodes were reduced to a LOS of 21 days ,how many bed days would be
needed

(Column 5) The excess Bed Days = Col 2- Col 3

(Column 6) The excess beds =Col 5 / 365 Days
In Summary

Age Profile: Patients < 65 years of age made up 54.4% of the long stay bed days, Patients > 65 years of age made up
45.6% of the long stay bed days.

Excess Bed Days and impact on bed requirements: In 2007 /2008 there were 713 episodes where the patient was in
Waikato Hospital for more than 21 days, for that episode. If all patients in that group had a LOS of no more than 21
days, then 29.5 beds would be available to do something else with.
Excess General Beds as a function of LOS
A LOS cut off of > 3 weeks (21 days) is large by most standards (e.g. At WH in 2008 the ALOS for general care episodes is 5.2
days). To get some idea of the total excess bed days being lost through poor care quality (yes I know some long stay is necessary for
neonatal ICU’s, following severe trauma etc), lets look at the implications of modelling different lengths of stay as being “too long”.
The excess beds have been calculated for a variety of LOS’s in the table below:
So

Based on an cut-off of 3× ALOS (3×5.2 =15.6) the excess general beds for Waikato Hospital is estimated to be 48+
Excess Bed Days Analysed By Discharge Unit
In this view the long LOS episodes have been sorted by discharge unit by age
Further Analysis
It is of course possible to analyse the long stay patients by a variety of parameters e.g

Unit

Principal Diagnosis

Clinician

Readmission

Complications

Etc
For example the next table is an extract from a report that provides information on the Principal diagnosis of these patients in the
Waikato Hospital in 2008.
Table 5
Waikato Hospital General Patients Length of Stay
Greater than 20 by Principle Diagnosis for 2008
Seq 13008
Principle Diagnosis Desc
Length Of Stay
Acute subendocardial myocardial infarction
Acute subendocardial myocardial infarction Total
Congestive heart failure
Total
Episod
es
21
22
23
24
25
27
28
29
30
32
35
37
38
43
47
54
56
61
108
21
22
23
24
25
27
29
30
31
35
36
38
40
42
46
Congestive heart failure Total
Type 2 diabetes mellitus with foot ulcer due to multiple causes
22
23
25
31
33
44
49
50
54
126
175
Type 2 diabetes mellitus with foot ulcer due to multiple causes Total
Wound infection following a procedure
21
22
26
27
28
31
33
34
35
43
56
72
Wound infection following a procedure Total
Acute myeloid leukaemia, without mention of remission 22
25
26
27
28
29
34
49
103
Acute myeloid leukaemia, without mention of remission Total
Acute and subacute infective endocarditis
21
25
26
30
33
34
36
39
44
Acute and subacute infective endocarditis Total
Pneumonia, unspecified
21
22
23
24
33
36
40
63
Pneumonia, unspecified Total
Infection and inflammatory reaction due to internal joint prosthesis
31
32
33
41
44
45
48
54
69
83
94
100
Infection and inflammatory reaction due to internal joint prosthesis Total
2
3
2
3
2
6
1
1
2
1
1
1
1
1
1
1
1
1
1
32
3
4
2
1
2
2
1
4
1
1
1
1
1
2
1
27
2
2
1
2
2
1
1
1
2
1
1
16
1
3
1
2
1
1
1
1
1
1
1
1
15
3
1
1
1
3
2
1
2
1
15
2
1
3
2
1
1
1
1
1
13
1
2
2
2
2
1
1
1
12
1
1
1
1
1
1
1
1
1
1
1
1
12
Exercise 7.14: You guessed it. Replicate the data tables in this section on number of patients by length of stay, by age, and by
clinical unit. You are going to need the underlying capability for what comes next.
Doing Something About Stranded (Long Stay) Patients
This is one of those management situations where you can start tomorrow even if you have no data reporting capability. I don’t care
if you have to get the nursing staff to phone up every day that someone in their ward reaches a certain length of stay, so you can write it
in a black book, and then send someone to see them (even you!).
The Opportunity

•Few patients result in many bed days, therefore manage the few

•Reduce ALOS of stranded patients to 21 days

•Save a large number of bed days

•Vastly improve patient experience
The benefits of managing the stranded patient risk

•Significantly improve patient care

•Significantly improve patient experience

•Reduce ALOS and bed requirements

•Improve bed availability, if surplus beds remain open

•Significant financial savings, if surplus beds are closed
So lets get into details, there a few things that you can and should do:
I am going to use Bill Kricker’s original notes again, this time adapted from a powerpoint slideshow.
Implementation: There are 12 Tasks to be performed
or
Recognise the Organisational Investment Required
Senior Management and senior clinical staff must understand that the stranded patient is a major issue . It is a

Patient care issue

Operational issue

Clinical issue

Financial issue
The issue is the same magnitude as emergency patients, elective patients etc.

• The issue is not a 20 week project

• The project cannot start with a big bang and gradually fade.

• The management of the stranded patient risk is an on going role

•There will need to be a plan to communicate to and convince all relevant personnel of the importance of this initiative
Professional Implementation
This is a significant task with major benefits
It is essential, that the project / function be established professionally
It must be project managed until successful and benefits are being captured. The risk management unit can become a normal
ongoing part of the organisation at that point
Establish a Risk Management Unit
There needs to be a risk management unit, headed by a senior staff member, preferably with a clinical background . This could be a
0.5 FTE role
Accountability for stranded patients must reside at the 2nd organisational level for the facility e.g. Director of Clinical Services, it
cannot be delegated to a lower level. This is important stuff. The head of the risk management unit must be accountable to that
person.
Management of stranded patients will be a shared accountability . The designated clinical units and wards in the majority of cases
will continue their roles, but an escalation process for issue resolution must be established. e.g.
As the project / unit achieves maturity, the task will need to become part of the role for an increasing number of staff.
Identify All Stranded Patients
Every stranded patient needs to be known and rescued
Any patient whose LOS has exceeded 21 days ,is by definition a medical / surgical stranded patient
It is essential that the risk management unit knows, daily, all stranded patients and their current LOS
Measure the Risk
The risk must be measured daily, for a given care type and form part of the daily operations report: for example
Actively Manage All Stranded Patients
The focus must be on rescuing the newly identified stranded patients( i.e. current LOS =22 days). It is essential that the unit obtains
control of the patients flowing into the stranded patients pool. Once the inflow is totally under control ,those remaining in the pool can
be addressed.
All patients identified as stranded must be actively managed until they reach the point of discharge. i.e. They are reviewed by the
risk management team and a care plan developed, implemented and monitored daily

Is there a clear management plan and accountabilities

Is clinical treatment appropriate?
This will need to be done promptly by an appropriate clinical specialist & the RMU

Is Care coordination appropriate?

Is discharge plan appropriate ?
Understand The RIsk
The aim of Understanding the Risk is to improve early identification, prevention and the rescue intervention. We recommend you
implement a Stranded Patient Registry and record relevant details of each stranded patient event

• Patient Profile

• LOS

• Factors contributing to stranding and estimate of LOS impact e.g.


Clinical Care

Patient Clinical Profile

Care coordination

Discharge planning
• Rescue Interventions and outcomes
Use the stranded patient registry to identify the Risk Factors
These could be

Previous History

Age

Co Morbidities

Inadequate social support

Complex care coordination required

Primary Unit

Primary Clinician
These risk factors could be used to identify potential patients in the future who need early or urgent intervention.
Early Identification - Screening
A clinician reviewing the following 10 questions, for example, would be able to predict whether the person has a High, Medium, or
Low risk of staying in hospital more than 2 weeks at the time of admission.

Does this person have a history of two or more of the following: cancer, stroke, heart failure, insulin-dependent
diabetes, COAD, or diagnosed mental condition (dementia, mental illness, or mental disability)?

Does this person currently reside in supported accommodation - nursing home, hostel, group home?

Does this person live alone, or currently receive community assistance at home - e.g. meals on wheels, community
nursing?

Have there been no enquiries or visits from the person's immediate family within four hours of arrival?

Did the person arrive by ambulance, or transfer into the hospital from another health service?

Is the person presenting with a traumatic injury that will require surgical intervention or intensive care?

Will treatment of the presenting condition require input from more than one clinical unit (e.g. geriatrics and
orthopaedics)?

Has there been any difficulty in identifying the lead clinical unit to manage the care of this person?

Does the person normally reside more than 30 kilometers away from the hospital where admitted?

Is it unclear that the person's condition will improve in hospital to allow a return home within 10 days?
A positive answer to 3 or more questions = medium risk.
A positive answer to 6 or more questions = high risk.
Anyone with a medium to high risk should be managed by the Risk Management Unit from the time of admission…
Prevention

Over time, improve the screening tool by understanding the risk factors

Use the screening tool to Identify potential stranded patients at an early stage

Examine the stranded patient registry regularly to identify potential successful interventions
Patient Status Visibility
As experience is gained, a traffic light system should be used, to ensure there is totally visibility of the situation at any point in time:
for example
If a patient meets the following conditions:

At admission: A patient classified as stranded at any admission in the last 2 years in last 2 years or

A patient identified by screening at admission, or

At 10 Days the patient has no discharge plan, or

Any patient in hospital more than 14 days
Any patient who has been in hospital for 21 days
Capture the Benefits
The kind of organisational investment and effort outlined in this section can only be justified and sustained if there is the ability to
identify the benefits being realised by the program, and then the benefits once realised are reapplied elsewhere.
i.e. Report monthly on Captured Benefits

Will the surplus bed capacity be used to treat more patients ?

Will the surplus bed capacity be used to treat more patients and gain more revenue ?

Will the surplus be capacity be closed and converted to a cost reduction?
Widen the Scope
Once you have set the system up, start to look at a shorter time horizon: 18 days, 15 days etc.
Exercise 7.15: Implement a Stranded Patient Program in Your Organisation.
Long Stay Patients and Capacity Planning
A long stay patient program is a legitimate way to increase capacity while decreasing people waiting around for something good (or
bad to happen). It is not an “all or nothing” approach, you will receive dividends whatever approach you take, you just need to start. I
would be surprised if even the most rudimentary approach does not deliver 3600 bed days or so (up to 10 beds a year) in increased
capacity. Done professionally, well I guess the numbers touted in this section are entirely reasonable to be freed up for use or for
savings to be realised.
Just do it for your patients if nothing else.
As the Group Manager Waikato Hospital, and an Intensive Care Specialist, I started a lunchtime practice of going ot see on patient
who had reached 21 days stay. I took the Director of Nursing with me and early on a Nurse Specialist who managed the project. Within
a short period of time we started getting calls from nurse managers, some of them about patients who had only been in the place for
less than a week, looking for some help. A couple of things occurred to me:

Don’t waste everybody’s time: You get involved as the senior most manager so that you can overcome and constraints
real or imagined (often people just needed to be given permission to do something sensible.

If as a senior manager you are not interested in these patients you should get another job. Shame on you, you are an
embarrassment. Cancel a meeting and get on with it.
Community Stranded Patients
There is another group of patients that can be identified in a similar way to the 5% of patients who consume 30% of the bed days.
They are what I would consider the so-called frequent flyers. People who are admitted with extreme frequency to the same (or a
series of) health facilities.
i.e. Between 2003 and 2007
Fiscal Years 2003/2004 to 2006/2007
All Patients Multiday and Daycases
86835 patients have come in once
Count of Patient
Presentations
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
NHI count distinct
86835
27631
11596
5909
3418
2098
1289
867
612
433
339
284
210
154
104
107
75
68
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
59
61
63
64
67
68
71
72
73
74
75
77
79
80
91
106
107
158
58
37
36
28
28
24
23
15
19
19
10
15
11
10
9
9
8
5
2
5
4
4
4
6
6
5
2
4
4
2
4
2
2
2
1
1
3
1
1
1
1
2
1
1
2
1
1
2
1
1
1
1
1
1
1
1
From this table, 391 people were admitted 20 or more times, and 152 people were admitted 30 or more times. Note, in-centre renal
dialysis patients were not included in this extract.
Stranded in the Community
The DRG breakdown of these frequent visitor patients reveal a mix of haematological, cancer, immunological and other patients.
Many of the clinical units that look after these patients have outreach and community support programs, nonetheless I cannot but be
convinced that many patients who are admitted to healthcare facilities are no less stranded than their counterparts in hospital. The
same approach that has been outlined in detail can and should be applied to patients stranded in the community.
Strategy 3: Facility Capacity Maximisation- Best Fit Capacity Plan to Facility
Configuration
We have already discussed this concept, but just to make the point again, the best way to use your capacity is the best way to use
your capacity.
Earlier I suggested you keep a stocktake of bed spaces (as one example): what you staff now, what could be opened tomorrow,
what might be available with a little time (say a couple of weeks to convert ward space back to ward space after someone used it for an
office).
A simple bed stocktake might look like this.
the argument behind this strategy is simple:

Once the performance plan has been decided, the episodes for each clinical program are cast into bed days required,
and then bed days to be supplied, using the methodology described previously in this chapter. Finally this is then cast
into beds required. The ward to be used for each clinical program or clinical unit is the ward or cluster of wards that fits
the patients into them, without regard for which specialty has “owned” that real estate previously

As a second point, no small wards should be allowed. The optimum ward size should be maintained, and full wards
should be operated. Under no circumstances should parts of several wards be opened or closed. Wherever possible
entire wards are used, and entre wards are closed.
This is a very simple approach, but also probably the most emotionally challenging for clinical staff.
Strategy 4: Run Your Two Businesses Well - Invest in Processors not in-Hospital
Queues
What are we trying to do?
A Hospital, in its greater sense, is a healthcare organisation that operates two different models of healthcare. In both of these
businesses, acute and elective, there is a series of queues (the waiting bit) and processors (the something happens bit). i.e.
And the obvious bit is this: If the processor is not working at a rate greater than the inflow into the queue……….
OK, so that’s the obvious stuff, lets get onto the other things you know but don’t acknowledge. Each of elective and acute
healthcare businesses is a series of linked queues and processors. But that is where the similarity ends.
Acute or Emergency Care
In acute care or emergency care, where a person arrives with a problem we don’t yet know about, and they cant go home until they
get better on their own, or we do something that makes them better. Although we know how many will come on a given time, we don’t
know what will be wrong with them or what they will need. To deliver this kind of care well, we need to be waiting for them to come.
Efficiency is not the primary goal, treating the patient well as early as possible after their arrival is10. Patients who enter under this model
must have first call on all of our resource (people, capacity theatres) even if this is not always obvious.
i.e.
The operational environment to do this is characterized by:

Flexibility

Some redundancy

Less than 100% efficiency (possibly as low as 75%) when resource utilization is viewed
Elective or Scheduled Care
The second is discretionary care, where a person with a known problem arrives for a particular consult or treatment. We make an
appointment with them, a contract, and within reason don’t need to see them immediately. Efficiency is very important in this model
because any capacity lost; a bed day, a theatre session, or a clinical session, cannot be regained. It is gone forever and has to be
resourced again. More importantly a contract has been made with the patient, and if not kept, a promise is broken.
10
Efficacy is efficiency but with a value perspective – in other words a very efficient process that does not deliver value to the “customer” is not
effective (and is therefore a waste of time).
The operational environment is one of:

Rigidity

Highly scheduled

100% efficiency if you can get it
So What?
I have taken the time to develop an excruciatingly detailed view of these systems so that people start to view the “patient journey” as
a series of linked queues and processors. There is no more mis-used term in healthcare management that the patient journey or patient
flow, with people scurrying around with post-it notes describing in great detail what happened to Aunty Martha, without recognising this
simple truth. We have two production lines representing two healthcare businesses.
The six hour target in the Emergency Department is, as everyone is so fond of telling us, a whole of hospital problem. What does
that mean. It means exactly as I have outlined here. There are a number of queues and processors in both acute and elective care. If
you don’t invest in processors, the things that do something, you will have to invest in “capacity” which is obviously a misnomer, what
you actually mean is a bigger everything (Emergency Department, Wards etc).
Again you say so what? Well here is so what: the whole of the emergency or acute care episode and all the queues associated with
it, happen in the hospital all within the same admission. If you want to free up space and give the patients a better quality of care, invest
in getting somebody to do something in the emergency/acute healthcare business.
This is often counter-intuitive: people worry about elective patients being cancelled and so focus more and more on getting these
patients “done”, while allowing acute/emergency patients to stack up all over the place in the wards, getting sicker. Then of course
elective admissions stop – you see there are no beds left.
Key Performance Indicators
I am not a fan of too much focus on KPI’s, but they should be used where they are relevant, for instance as measures of the
effectiveness of the processors you have deployed and the resulting queues, for example11:
Acute:

ED 6 hour target – by managing the downstream processes well (bed management)

Theatre (80% patients operated on within 24 hrs, 100% in 48hrs)

Cath Lab: no patients wait more than 72hrs for an intervention.

etc

Respond to referral within X days

First specialist assessment within X days

Intervention within X days
Elective:
11
There is no point in pretending you have two businesses if you have never defined the work flows for that production line, which almost nobody
does. The KPI’s come later as a measure of the system tolerances. I will address both these issues in later sections in detail, a lot of detail.

Measure elective stream performance against stated goals (for example: zero hospital initiated cancellation less than 3
weeks before appointment)
An Example
As you read this, you are saying to yourself, yeah right! The point is with many of these strategies you don’t have to do everything
to get all the benefits. If you start doing the right things, you will get rewards as you go.
One of the pressure points in any acute system is the wait to get to surgery for patients who have to be in hospital until something
happens. It is not unusual for a hospital with, say 14 or 15 theatres, to only run two of them for unplanned emergency surgery.
Now it seems nuts to laymen that we choose to operate on other people while people waiting for emergency surgery (eg: “fell over
broke hip”).
As part of the realignment of our healthcare business to suit the patients, and to run two healthcare businesses in one building, we
thought about what we should be aiming to do with patients waiting for acute or emergency surgery. Eventually we settled on a goal of:
We must Operate on all acute patients within 24 hours of their being registered with the theatre co-ordinator, and 100% within
48 hours.
Now again this is an interesting stand to take. The public would probably view this as still no that good: “you mean I could lie around
for two days”? The medical staff had a different point of view: “this is unrealistic”.
Once we had decided that this is what this one particular part of our production line performance had to be, a couple of things had to
happen:

We had to define out production line operations and definitions: for instance can someone be put on the list if they were
not immediately able to proceed to theatre when called? (and where do you list the people who will be ready soon?).

We had to work out what our escalation procedure was going to be: what will happen when we need more operating
time? Of course the default had always been to cancel an elective list, but there had to be other options right, and there
were, like:

Extra evening shifts staffed by voluntary staff paid at the equivalent private sessional rates.

Re-arrangement of the operating schedule to provide more full day lists, and decrease the number of moves a surgical
team would have to make between theatres and buildings.

Developing an adequate staffing plan so that theatres did not close for staff sickness.
Sure some of these things cost money, but the business case is simple: invest in things that process (treat) patients, so you can
disinvest or reallocate things that store patients while they wait for definitive treatment.
Exercise 7.16: Assuming you have been using the department of orthopaedics as you performance planning example in the
exercises so far, calculate the average number of days acute/emergency patients wait from time of presentation to time of surgery. If
you are using a different unit you can still do the same thing. How long is the queue, how many people are in it? What is the average
wait, what proportion of people get what they need in 24 hours, 48 hours, more than 48 hours? Is this OK? What are you going to do
now?
Summary: Running Two Businesses
It is not possible to run a healthcare business effectively unless one understands the “production line” form entry to exit, including
where and what patients are waiting for, and where they are simply being stored while they wait for the doctor to make a decision, or a
process of care (or investigation) to occur. For each of these queues and processors, one must establish acceptable parameters: how
long is it OK to wait?
In elective care there are already well defined parameters (in New Zealand at least) put forward as a performance framework by the
owners of the system, for example the Ministry of Health, but even these are sometimes viewed as not being part of one production line,
and are sometimes treated as individual problems.
If you don’t have a whole of system view for your business you can really create havoc. New Zealand operates a reporting system
called ESPI (Elective Services Patient Flow Indicators), and example of which is included below:
This is a really good system measurement because it forces you to think of the whole production line for your elective business. If
you only set about fixing one of your problems without considering the others, then you might get a surprise.
When I took over running the Waikato Hospital in 2008-09 we had a long standing problem related to the length of time people were
waiting to see a specialist. So we set about sorting that out, only to work out we were heading into Christmas and everybody we were
putting into the queue for a procedure was going to be affected by a decrease in available operating capacity. Its not a good feeling to
solve one problem and walk blindly into another, that you could have predicted if you had taken a whole of system view.
In Acute/Emergency Care there is no real requirement externally to develop a whole of system view for that business. Only the front
door is currently being watched (4 or 6 hour targets!!). If you are going to run an efficient and effective high quality healthcare business
you are going to have to:

Recognise that you run two different production lines (yes I know you hate these terms), with different requirements to be
good.

Define the production lines: queues and processing rates.

Measure the length of the queues and decide what is OK and what is not.

Measure and report against the parameters you decided were good measures.

Do what you need to do to meet what you have decided is good.
How Do you Balance the Needs of Two Different Businesses in One Building?
Good question! The answer lies in scheduling and co-ordinated operational responses in real time, and we will get to that
discussion later.
Strategy 5: Re-organise Acute Services and Don’t admit People Unnecessarily
Warning! This section is wishful thinking, an indulgence by the author and not really that helpful – yet!
Stop People Coming to Hospital – Should We?
I understand all the arguments for stopping people coming to hospital, but are they really valid. Kelvyn Youngman, an operations
guru I once worked with, made the point that people don’t want to get sick, and that we should not be paranoid about ever increasing
demand. There is a limited number of sick people, however many there are, and they can all be taken care of by operating our health
systems at increasing capacity delivered by productivity.
An interesting point of view.
The Re-Organisation of Acute Services
We should schedule the doctors to suit the patients, not the patients to suit the doctors.
In New Zealand in 2006 we had an interesting experience, the Resident Doctors Association went on strike for 4 days. Senior
Doctors had to staff all services. The number of acute admission went down, the presentation of patients to the Emergency Department
was unchanged (sick people come to hospital).
This surprised nobody!!!! So we have the answer, senior experienced medical staff see the patient and deal with their problems as
soon as possible, so lets implement. No wait, lets examine why it cant happen!
Exercise 7.17: Patients present all times of the day and night, it is not reasonable to have senior doctors available then. Examine
this statement and tell me what is wrong with it. Think beyond the obvious!
Strategy 6: Effective Scheduling and Co-ordinated daily Operations
The issue of scheduling will be dealt with elsewhere in detail, but with regard capacity maximisation there is an important question to
consider:
Exercise 7.18: If you plan to run a hospital at a utilisation of less than 100% why does it always run at a higher level? It must be
more patients arrived than planned right?
What Does not Work!12
I was planning to alienate as many people as possible in this section, but perhaps I will tread softly, or maybe not.
Early Discharges: Discharge Before Midday!
Wont work. No that’s not true it might, but more likely you will put patients in transit lounges or some other arrangement that
requires another nursing handover, extra paperwork, and a discharge into the community by people who did not look after the patient
whilst in hospital.
I understand that hospitals swell at the middle of the day when those going out meet those coming in. It makes sense to try and get
those going out to leave a bit earlier, but the answer is actually counterintuitive. Forget about cutting length of stay by a couple of hours
12
These are the authors views, not those of Bill Kricker.
right at the end, instead focus on the strategies and tactical approaches I have outlined above, and take whole days out of length of
stay. That’s where the pot of gold is.
Patient Journey Projects
Patient Journey projects are a waste of time. No that’s not true, they can be of use but they are for managers who don’t know how
to manage. Managers who cant appreciate the nature of their businesses and the operational management required to run them.
Patient Journey projects are useful to highlight specific patients and to generate concern by using a real person and a real story, but if
you cant generate a re-organised and competent operational management function off the back of that story, then all you have is a story
and a bunch of enthusiasts. Over time, or with a change of senior executives (the sponsor) energy wanes – inevitably.
Nurse Initiated or Nurse Led Discharge
I understand what I am about to say is heresy. Despite everything I have written about doctors directing resource utilisation, nurses
are my favourite operational management people. I love them. They are the backbone of every health system, the substance. That
being said, the idea of nurse led discharge is a great idea gone wrong. Richard Bohmer has done a lot of work on understanding the
alignment of the nature of healthcare and its management. He divides the world into standard episodes of care, and those that are not.
Standard episodes of care occur in scheduled elective care with the exclusion of the high end elective work, where anything can happen
when you stick someone else’s liver into another person13.
In the setting of standardised care, or elective care, nurse led discharge has been developing for as long as private hospitals have
been in existence. You pass wind you get oral fluids; you pass a bowel motion you get discharged.
Taking a highly effective practice and expanding its horizon’s into non-standardised care episodes wont work. It just wont. Don’t
waste your time, rather spend your time getting an experienced doctor to focus on what is going on with his/her non-standard patients.
But Discharge Planning is Good – Maybe!
My comments about the utility of nurse initiated discharge should not be taken to mean that I am dismissive of discharge planning, I
am not. However……….a lot has been said about recording discharge dates into the system so that they are known ahead of time. I
think tis is a great practice if it helps people understand when a person is likely to go home so that the relevant planning can happen (at
the every least the patient and family might like to know). I am less convinced that recording expected discharge dates is useful for
managing capacity in all but the most capable organisations, although I am sure that it is useful when you are that capable14.
Performance Management and Reporting - Capacity
Creating A Capacity Utilisation Plan and Sticking to It
So far we have talked about working out what space you have, and keeping a map of it. We have talked about the performance
plan and how that is related to the capacity that needs to be delivered, admittedly referring in the main to bed days (as the most
expensive and visible component of care episodes). The planning, reporting and variance management of capacity is not a separate
process to everything that has been described in detail in the previous chapter on performance planning and management of the
operational plan.
Just as one discusses activity, expenditure, revenue and staffing, on discusses how the clinical units (or clinical program) are
performing relative to the capacity plan.
Starting the Conversation (or Negotiation)
As we have consistently assumed, the first task for management to get on top of, is measurement. Measurement of what is actually
happening now, which is also by default your fist capacity plan. You are currently delivering what you are now delivering, with the
capacity that you have.
Now I would like to take a bit more time to look in detail at how one actually changes the plan from what it has always been, even if
invisibly so, to being something different as a matter of planned intent.
The Story So Far
You are now performing the capacity plan component of your operational plan.
13
http://www.hbs.edu/faculty/Pages/profile.aspx?facId=6424
14
The only placed I have seen discharge dates being used to manage capacity prospectively was the Alfred’s Elective Procedure Centre and the
associated short stay ward facility. Everywhere else, lots of noise not much utility.
You have a performance plan that outlines the clinical programs and the episodes that need to be delivered for each program.
i.e for the clinical program the summarised performance plan looks something like this:
So that within the elective clinical program there is a one line entry for general surgery. This one liner can be further detailed down
to individual clinicians. i.e
Note: The full versions of these tables are available in the attachment for performance planning.
Clinical Engagement
You have the contribution of each clinical unit to each of the clinical programs, and these are captured as a Performance Resource
Centre.
Up to now, lets say for arguments sake, you have gone along with your organisation has been doing up to now, but now you need to
change your performance plan, and therefore the capacity plan needs to change, or you are not changing the performance plan, but you
need to increase productivity and so again your capacity plan will have to change.
How do you do this?
What you do not do is sit in a dark room and make some stuff up. Nope it is time for clinical engagement. Clinical units are
responsible for Performance RC’s, and clinical units are headed (mostly) by a clinician. So the conversation starts with the head of the
clinical unit, and because nursing will be supplying the bed days, you need to make sure this is one conversation.
How Does the Negotiation Progress?
The negotiation with the head of the clinical unit and interested parties goes something like this: John (for example) as the head of
general surgery you delivered about 1800 elective admissions. About two thirds were done here, and about a third were done
somewhere else. This year we agreed your performance plan was going to change by “X” episodes, “Y” of which are going to be daycase from now on (because you have a pan for that !!!) where does that leave us in terms how many bed days and therefore beds we
are going to need.
Planning Operational Meetings
My advice is to conduct the performance planning meeting with clinical units first and agree what performance is desirable.

Clinicians must become engaged in performance management

Clearly spell out accountabilities at all Clinical levels (for example the head of the clinical unit “owns the Performance
RC”). To do this you will have had to15:


Establish Clinical Units

Establish Performance Resource centres for each Clinical Unit

Establish monthly actual performance reporting for each unit

Establish a performance culture at the clinical level

Develop a performance plan for each unit
Conduct a second meeting, regarding capacity and bed days. For this second meeting you must prepare a model of
what the new performance plan is likely to require in capacity, and a benchmarking tool16.

The meetings must be held in a professional manner.

Utilise benchmarking to:


Establish planned ALOS at a DRG level for each unit

Establish planned SD% at a DRG level for each unit
Develop an improvement plan by Unit by DRG and be seen to support it and discuss it
Exercise 7.19: Choose a clinical unit (eg: orthopaedics), and run through the process of translating a performance plan into a
capacity plan, including the relevant meetings as described.
Exercise 7.20 Advanced Practice: You need to find a way to production-ise the reports required to production plan (performance
and capacity), and to establish the planning and reporting cycles. Produce a plan to do this that meets the accountability criteria for any
Resource Centre. Who will do what and by when to get this practice up and going?
Negotiating
Never forget the principles of accountability when it comes to performance and planning. The RC owner must have control of the
process and resources required to deliver the plan they are accountable for. These meetings are in the nature of an agreement to
deliver under circumstances both (all) parties can live with, even if it is a stretch.
This means clinicians cannot come to meetings (or refuse) as some kind of disinterested observer: the head of the clinical unit is
turning up to negotiate and will be accountable for the outcome when it has been successfully negotiated. Nobody said it was easy.
Reminder
Governance Principles
This is just a gentle reminder of the principles of governance outlined in an earlier chapter:

In important meetings (planning and performance meets that descriptor) consider the three layer principle; have the
bosses’ boss in the room if you can, it will save a whole lot of talking, explaining and aligning later.

Record all decisions, and in the case of performance and capacity plans (as with the whole operational plan for every
RC) make sure the negotiation is signed off by both parties who agreed to it, the wherewithal to deliver that plan, and the
consequences of delivering it (or not).
Planning, Reporting and Variance Management
Remember this:
15
As outlined elsewhere in this book
16
See attachment to this book dedicated to this topic.
You will be getting tired of this diagram by now, but just to bang the message home:

Every Resource Centre must be dealt with in the same way.

Clinicians have two roles, one of which is to deliver activity in a clinical program.

This activity is usually captured within a performance RC

Each RC must have its own operational plan

Each operational plan must be planned starting with performance plan.

Each of the parts of the operational plan must be congruent with the next: the performance plan (activity) cannot be
incongruent with the capacity planned, which cannot be incongruent with the staff plan, the expenditure and so on.

The reporting of the operational plan must cover all the aspects of the operational plan: activity, capacity, staff,
expenditure, revenue etc.

Clinicians “own” (are accountable for) performance RC’s therefore they will participate in the planning, reporting and
management of the RC they own.
Nothing in this chapter, or for that matter the preceding one will, make a jot of difference if the Resource Centre accountability
principles and the operational planning/performance management principles are followed.
This is after all, management. I am not sure what you are doing if you are not doing this.
Scheduling
In any considering operations management scheduling plays a big part. The whole concept of the right people and equipment, in
the right place at the right time is dependant on scheduling. And it can be quite complex. For example:
The most important aspect of scheduling is people (or labour), although physical capacity (or space) is obviously important if you
don’t have enough.
In the first instance, I intend to go into detail on scheduling of people in the section on staffing, which follows.
No discussion on scheduling of capacity would be complete however without some examination of natural and artificial variation.
Natural Variation
Natural variation occurs throughout the year in response to seasonal variation and annual events. To some degree it is artificial
variation in the sense that events like financial year end, Christmas, and holiday seasons tend to have a significant impact on
(scheduled) demand. These are man made events, but they might as well be natural or immutable.
The graph below shows volumes of surgical discharges per month over a period of years.
It becomes obvious that the December January effect, when people go on leave and theatres shut down, is a low activity period for
scheduled events, and the opposite occurs, say in March when nobody goes away.
Equally as important is the number of working days in a month. This seems like a small thing, but depending on where weekends
fall, there can be as much as a two or three day variance in the number of weekday working days in a month: 19 to 22. In the context of
scheduled services which happen on weekdays, this is a huge variance.
Artificial Variation
As I learned a long time ago, acute or emergency demand is very predictable, you may not know what will be wrong with the people
coming through the door, but you will know more or less how many will be, and how many of those will need admission. The area we
gut up to mischief in is the elective patients, and more particularly our working patterns on weekends.
i.e.
Emergency & Elective Admissions
April-November 2002
60
Number of Admissions
50
40
30
Emergency
Admissions
20
Elective
Admissions
10
11/11/2002
28/10/2002
14/10/2002
30/09/2002
16/09/2002
02/09/2002
19/08/2002
05/08/2002
22/07/2002
08/07/2002
24/06/2002
10/06/2002
27/05/2002
13/05/2002
29/04/2002
15/04/2002
01/04/2002
0
Form this representation it should look to you as there is much more variability in elective admissions. This becomes more
pronounced when you separate the two streams out, and then look at weekend movements.
i.e.
Acute Admissions
Average Daily Emergency Admissions
40
35
30
25
20
15
10
5
0
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
Elective Admissions
Average Daily Elective Admissions
25
20
15
10
5
0
Monday
Tuesday
Wednesday
Weekend Patient Discharges
Thursday
Friday
Saturday
Sunday
Average Discharges per Day
80
70
60
50
40
30
20
10
0
Monday
Tuesday
Wednesday
Thursday
Friday
Saturday
Sunday
Book and Hope
From this information it seems clear that the way you schedule your elective patients is the major determinant of variability in weekly
flux. Equally if your health business runs as a five day a week operation, you are very unlikely to get anyone home over the weekend.
Exercise 7.21: Do you think that the graph above, discharges by day of the week, shows that the patients admitted earlier in the
week are discharged later in the week? Is that why Friday is such a big discharge day?
Healthcare Business KPI’s
Exercise 7.22: It has always seemed odd to me that we measure wait times for people in the elective healthcare business part of
our operations, but not (until ED targets were introduced) in our acute healthcare business. Why is wait time more important in the
acute / emergency business, and what should we be using as a KPI for elective services?
Book and Hope, and Chaos
Rob Ebert, an anaesthetist, and operational enthusiast of long standing coined two phrases that have long been central to my
thinking:

Book and Hope: This phrase reflects the kind of uncoordinated approach most healthcare systems take to booking
elective patients in for something to happen. Almost no attention is paid to any other part of the system, one hand does
not know what the others are doing, each unit does its own thing and then gets angry when patients have to be
cancelled.
The Thursday phenomenon. Many years ago Thursday was the nightmare day for patients to get into the post operative high care
unit (HDU). Both the vascular team and the thoracic team would operate on the same day, and might have three or four patients each
who need the HDU. Of course it is very difficult to accommodate 7 new patients in one day into a ten bed unit. Frustration was rife.
Both units decided they would change their day so they did not clash. Nobody co-ordinated the change, and now they both operate on
a Monday, along with the neurosurgical team – oops you can see where this is going. Management that is focussed on its production
line would notice this convergence and do something about it, unfortunately patients are too valuable to be on a production line.

Doctors Should be Scheduled to Suit the Patients: In the real world, patients are scheduled to suit the doctors. We
allow this because doctors are a scarce resource apparently and their time must be maximised. Well this is true to some
extent, but really only applies to elective work, and if doctors are only going to work on weekdays in the elective world,
well you can see how we get into trouble. But, I hear you say, doctors need work life balance and a home life too! I
agree they do, but the pendulum has swung too far. We cannot pretend the health system exists for the community if in
fact we behave as if it exists for us.
People always envisage the worst when you talk about scheduling the patients to suit the doctors changing to meet the patient
needs. The worse the scenario you can paint the more outraged the medical staff will feel comfortable becoming in defence of their
work patterns. If we just started to remove the most egregious practices we would see some improvement, and some improvement will
do for now. In a short journey through Queensland Health I remember talking to a surgeon who had no qualms arguing that it was
better to take a whole bunch of patients who required keyhole gall bladder surgery off the wait list to operate on the same day, even
though some were low acuity and had been on the list for a short time, because it was important for the registrar to have the opportunity
to practice by doing the same type of surgery over and over again on one day. If you think this is OK, then you might be part of the
problem. If you think it is Ok not to have a specialist surgeon in the room, or operating, on the emergency or acute theatre list, having
delegated it to a junior doctor, then you too might be part of the problem. If you think it is Ok for an on-call specialist to be in his private
rooms or operating in a private hospital then you are definitely a part of the problem. I will stop now…………..
Scheduling: Taking the Coward’s Way Out
The point I am making is this, much of the scheduling difficulty we face is created by ourselves because we have built a system to
suit the staff and the profession and because we have not built the system the patient needs. To be more exact we have not built the
systems to support the very different needs of the acute patient and his counterpart the elective or scheduled patient.
Because we have not recognised this issue and responded to it, we do not have clinical program (acute, elective etc) management
representation. Because we do not have these there is nobody to advocate for patients based on what they need in each healthcare
business, instead they (the patients) are all mixed up in the whirlpool that is book and hope management.
The theme throughout this book has been to expose managers to things that they cannot readily get from other sources. In this
vein, I am going to move on from scheduling and patient flow. There are very many enthusiasts and snake-oil salesmen who dabble in
this space, and some very good commercial grade applications that can tell you within a person or two, how many people will go in and
out of your organisation on any given day17. I am not going to pretend I know more than they do.
You should talk to them and learn from them, but not before you have organised yourselves to deliver patient orientated services
rather than professional orientated silo’s (I will try not to use that word again – ever). Can you imagine a soft drink company like coca
cola just producing whatever flavour drink they wanted to on any given day based on the view of the different production line units. It
would never happen, that’s why thee are brand managers for each brand they sell, each brand manager has a schedule to meet and
sales target. That is why there are production planners who decide which part of the plant will be used for what drink in order to
produce what needs to be made, when it needs to be made, and in the quantity required. Do they get it right – unlikely, but at least they
are playing in the right ball park.
Co-ordinated Operational Response
The third and final part of this chapter relates to the ability to provide a co-ordinated approach to what happens on any day. What
happens when you have a master capacity plan and you have scheduled something to happen on a given day, whatever your capability
is to do that, and something does not go according to plan?
There are a number of variables here:

How good is your planning?

How good is your oversight, and appreciation of what is going on, on any given day?

Are the rules clear, would anybody know there is a crisis?

Is crisis your daily operational mode?

Is anybody who can make a difference paying any attention?
A co-ordinated operational response is the pointy end of the stick, but you cant run before you can walk. We can learn a lot from
airline and other related industry operations centres about how to respond to what is happening in real time, but unless we have
accountable people in the room with the capability to count, plan and report, and who are accountable for patient centred services, well
we are just putting the cart before the horse.
If you don’t believe me ask any frustrated “bed meeting” attendee at any major hospital or health system you care to mention.
Turning up unprepared and ill informed is not conducive to good health: yours or the patients.
Lets get the groundwork done first.
17
For example CapPlan by Emendo, a very proficient and accurate tool.
Answers to Chapter 7
Exercise 7.1: Take the performance plan you developed and do the following:
Break the performance plan down so that you have one for each clinical unit: a list of types of episodes of service to be delivered for
each clinical program by each clinical unit.
For the multi-day episodes of care, complete the performance plan set of three parameters: episodes of care, length of stay, and
bed days required.
If you are just starting out, this is your first time doing this, pick one area: the area you are responsible for, or if you are a senior
manager accountable for a number of areas, pick one clinical unit (usually something simple like orthopaedics).
I admit this is a big ask, but in the attachment on performance planning you will find a number of templates and examples you could
follow. The only way to do this is to do it.
Start with one unit and run through the process, then add a couple more units until you have learned how to produce the reports.
Then sit down with a clinical unit and ask them to look at the report, and tell you whether it looks believable.
Record the issues that are raised and find solutions to them.
When you are happy that you can produce a report with some regularity and repeatability, try add another couple of clinical units.
Remember

It is OK to make errors but it is not OK to be unprofessional.

If you don’t use the number they will never become useable.
Exercise 7.2: Classify and then count all the spaces you have that could be used for patient care tomorrow if required. At this stage
you are not worrying about your ability to staff the space, just the physical space and its readiness for use. (as an aside, you may find in
your institution a whole lot of patient care spaces have been converted to offices and other things over time, as a secondary exercise
you ought to include that in your inventory as a category – could be used in 3 months etc).
The template below is something you should be able to produce in fairly short order. Sure it does not consider things other than bed
spaces, but this is about learning how to do something. Once you can produce and use this template then compiling similar ones for
outpatient rooms, daycase treatment spaces etc should all follow.
Exercise 7.3: How Does the Organisation You Work in Calculate length of stay? Don’t make any assumptions, actually find out and
document the allocation rules!

Is length of stay calculated as midnight census (which is a problem) or is it calculated on date and time of discharge –
date and time of admission (which is more useful).

Does your organisation use statistical discharges as an administrative practice?

Does your patient administration system allow counting of days spent in each place individually, or does it lump the
whole stay onto the last ward the person was in?

You need to know the rules and how they are applied in detail.
In order to have any chance of planning bed day capacity in any useful way, you need to know the actual length of stay in days,
hours and minutes, and you need to be able to ascribe each part of that length of stay to each place that it occurred. You don’t have to
be able to do everything perfectly to start with but you need to start with the right habits.
Create a glossary to record the definitions you are using so that usage becomes common. Again you will find an exemplar in the
relevant attachment to this book on performance planning.
Exercise 7.4: Try and replicate the table below for your organisation or the area that you are accountable for, which sets out the
capacity utilised for each class of capacity set out above.
As with everything, the definitions are important and must be recorded:

Adult General: General Wards that can be used for a variety of multi day purposes. High flexibility for Adult multi day
patients

Children General: General Children’s Wards that can be used for a variety of child related multi day purposes. The
specialisation of the capacity relates to staff and infrastructure. High flexibility for young multi day patients

Day: Specialised day capacity compared to multi day capacity

Speciality: Speciality capacity that is required for specific patients and cannot be used easily for other patients. Low
flexibility

Outsourced: At this stage, this is patients not treated at the Hospital facility

Transit: The Transit lounge
Exercise 7.5: When the above report was run, for the sake of version control, the query script for the report the table came from was
as follows: “Details are shown in the Report Seq 8004 WK_4 WK Waikato Hospital Actual Vols, Bed Days and AvLOS by LAST
TREATMENT WARD for FY 2008.xls- - Sheet 2” Where did the data for your report come from, could you run the report again, and
get the same numbers, who would vouch for the report. If this was a bottle of Grange Hermitage, could you provide proof of cellaring
and storage temperature: what is its provenance?
Exercise 7.6: In the first exercise in this chapter you got your performance plan for one clinical unit (? orthopaedics) ready to work
with. If for arguments sake you needed to admit 10 000 multi-day patients for your orthopaedics unit to look after, and they had an
average length of stay of 5 days, what capacity do you need to provide in the orthopaedic wards for these patients?
This is a bit of a trick question. The first answer in every instance is that nothing changes until something changes, so the number
of beds required is the number of bed days and beds used up to now, wherever they might be. The point of this exercise is to ascertain
whether you can report what bed days a clinical unit used.
You might also have looked at:

How many beds are designated “orthopaedic”, where they are and how they are configured – this is usually where
people start.

How many patients, bed days or beds were occupied by orthopaedic patients elsewhere (not in an orthopaedic ward) –
this is usually where people get to as the next step after simply describing where the orthopaedic wards are.

How many bed days were supplied for orthopaedic patients and how many were used – if you thought of this degree of
detail, congratulations.
Lets move on.
Exercise 7.7: For each of your classes of capacity, decide what utilisation you think you should run at. You might want to think
about the following:

Age

Degree of illness

Acute or elective care streams
This is an interesting question and it needs to be answered, and the answers recorded.
i.e.:

Critical Care areas: 70% average utilisation

Acute General Care Areas: 85% utilisation

Elective General Care Areas: 95% utilisation
I know it seems odd to some people to consider these proposed numbers when they are used to being “full”, but you need to have
decided on utilisation ratio’s so you can move on to capacity master planning later in this section.
While you are doing this task you might want to think ahead a little about why hospitals run at >100%, even if you planned a lower
utilisation on average. It is sometimes quite sobering to look at the number of bed days you have enough staff for (total available
supply) relative to the number of bed days you used (total accommodated demand), and then think back to how full you were – where
did all the capacity go?
Included below is the kind of table we produced early in our capacity planning learning curve to try and quantify bed days that would
be required for each clinical unit and for large clusters.
Report 28: Waikato Hospital
Bed Day Requirements
2008/2009 Performance Plan V2
Qualifications
Excludes Emergency Department patients, Renal Incentre and CAPD, Mental Health, Respite, Longterm
Geriatric/Physical Dis
Geriatric A, T & R (active rehabilitation)
Geriatric A, T & R (intermittent planned
programme
Psychogeriatric A, T & R (active
rehabilitation)
Physical disability A,T & R sub-series
Physical disability A, T & R (active
rehabilitatio
Geriatric/Physical Dis Total
Medical
General Medicine
Emergency Medicine
Cardiology
Dermatology
Bed Days
Required at
95%
Occupancy
2
0
0
2
2
0
0
390
2
388
8319
0
8319
8757
2
0
2
62
0
62
65
Total Bed
Days
Required
2
HDU/ICU
Beddays
Required
Multiday
Cases
601 Total
Daycases
Clinical Unit(Health Specialty) Description
601 Radiology
Total
Predicted
Episodes
Clinical Unit
Multiday Bed
Days
Required
Sequence 2210
0
0
2
0
2
25
0
25
26
10
0
10
205
0
205
216
64
0
64
1365
0
1365
1437
468
2
466
9976
0
9976
10501
3805
373
3432
18387
600
17787
18723
29
8
21
27
4
23
24
4193
691
3502
16063
245
15818
16650
6
0
6
72
0
72
75
Gastroenterology
1757
1468
289
1847
53
1794
1888
Haematology
1497
1021
476
3401
67
3334
3509
Neurology
590
410
181
1634
228
1406
1480
Oncology
2959
1965
994
4320
26
4295
4521
23
4
19
98
2520
351
2169
8221
Specialist Paediatric Oncology
Paediatric Medicine
Specialist Paediatric Intensive Care
Renal Medicine
Respiratory Medicine
Generalist respiratory medicine
114
98
103
8107
8534
14
0
14
47
4
43
45
751
93
658
4270
144
4127
4344
1939
326
1613
7969
277
7693
8097
262
0
262
151
0
151
159
56
54
2
6
0
6
7
Rheumatology
Palliative and Terminal Care Medical
Services
332
39
293
1417
8
1409
1483
Endocrinology
206
111
95
422
4
419
441
14
2
12
49
5
45
47
20953
6915
14038
68403
1777
66625
70132
Antenatal services
1320
295
1025
3903
1
3902
4107
Delivery services [mother]
2980
792
2188
6260
4
6257
6586
29
29
0
0
0
0
404
97
307
1011
9
1002
1055
2184
1066
1118
2826
0
2826
2975
1233
138
1095
13432
0
13432
14139
386
14
373
1792
0
1792
1887
Obstetrics and NICU Total
8536
2431
6106
29224
13
29211
30748
Surgery
General Surgery
5044
1477
3566
17906
1443
16464
17330
Anaesthesiology
254
243
12
93
7
86
90
Cardiothoracic Surgery
493
10
483
6565
632
5933
6245
739
Diabetology
Medical Total
Obstetrics and NICU
Primary delivery services [midwife]
Postnatal services [mother]
Postnatal services [well newborn]
Paediatric neonatal special / intensive care
[Leve
Postnatal early intervention
Thoracic Surgery
83
2
82
810
108
702
Dental Surgery
148
126
21
35
3
32
34
Maxillo-Facial Surgery
375
50
324
707
13
694
731
Otorhinolaryngology (ENT)
1788
744
1044
2553
72
2481
2612
Gynaecology
3273
1912
1361
4006
32
3974
4183
Neurosurgery
470
43
427
3975
776
3199
3367
Ophthalmology
1489
1143
346
1066
24
1043
1098
Orthopaedic Surgery
3609
487
3122
22145
211
21934
23088
Specialist Paediatric Surgery [Neonates]
16
4
12
27
0
27
29
Specialist Paediatric Surgery [Others]
1444
503
942
2390
6
2384
2510
Plastic Surgery [excluding burns]
3197
1873
1324
5902
121
5781
6085
70
2
68
460
3
457
481
1054
248
806
2580
73
2507
2639
Burns Surgery
Urology
1126
231
895
6589
448
6141
6464
Surgery Total
Vascular Surgery
23933
9099
14834
77809
3970
73838
77725
Grand Total
53893
18449
35444 185411
5761
179651
189106
Exercise 7.8: Where do you think the capacity required to be delivered for the orthopaedic clinical unit to look after its patients,
should be supplied?
The orthodox answer is in the orthopaedic ward! If however one was to supply a ward or wards big enough to accommodate all the
orthopaedic patients whatever the variation in their number from day to day, then the total number of beds or wards required for each
unit, and in total, becomes unsustainable on a cost basis.
Neither is it a good idea to open and close beds in each wards from day to day. This is the quickest path to bankruptcy and poor
quality care.
Equally unappealing is to put everyone in who comes in, in any bed anywhere at any time. This is very cost effective but not great
clinical practice.
Somewhere in the middle is best, and this can best be accommodated using a cluster approach, where wards with common patient
types buffer each other’s capacity and ebb’s and flows.
Exercise 7.9: Part of the Discipline of Management is the Recording of the Operational Procedures used to do something. In this
exercise you are required to do two things:

Create a glossary of terms used in this section on capacity

Outline the Procedure used (or that will be used) to arrive at your “bed plan”.
The following table is taken from the front of the capacity planning and reporting tool, it defines where data came from, what
definition is being applied, and provides a short explanation. Until and unless everybody involved in this activity understands the same
words to mean the same things, you cannot have any kind of sensible conversation.
Definitions
Year to date 3-6-2010
Disclaimer
The data in this report is only as accurate as the source data feeding into the report.
Extracts have been confirmed to be correct. Staffing matrices, bed plans, forecasts and
required beds need to be updated regularly to reflect changes.
Delivery Definitions
Relating to the Wards Summary Sheet
Planned Beddays
Data Source: Master Planning Schedule Bed Plan.
Explanation: Daily bed plan by ward, updated on a monthly basis. The bed plan is based on
required beds.
Planned Staffed Shifts
Data Source: Master Planning Schedule Staff Plan.
Explanation: Daily staff plan by shift, calculated from the bed plan and staffing matrix.
Rostered Staffed Shifts
Data Source: OneStaff. Prior to the beginning of the roster period the roster is extracted from
OneStaff and imported into CapPlan.
Explanation: Finalised staffing roster X weeks prior to being loaded into OneStaff Staffer. Shifts
are clinical nursing shifts.
Additional notes: This is not currently available. An extract will be established immediately,
however it would be recommended to begin data capture for this report 1st July 2010 to avoid
reporting on a partial year.
Rostered Staffed Shifts vs Planned Staffed Shifts
Purpose: To measure the effectiveness of rostering to the staff plan.
Delivered Beddays
Data Source: Daily Report Calcs file used to produce the daily report.
Explanation: The actual beds open daily as at 8am regardless of prior planning.
Effective Staffed Shifts
Data Source: A calculation based on the Actual Beds Open and Staffing Matrix.
Explanation: A calculation of the actual staff required for the actual beds open, regardless of
prior planning.
Actual Staffed Shifts
Data Source: OneStaff. The actual staff on is extracted from OneStaff and imported into
CapPlan daily.
Explanation: Actual staffed shifts worked as in OneStaff Staffer, regardless of prior planning or
actual beds open. Shifts are clinical nursing shifts.
Actual vs Effective Staffed Shifts
Purpose: To measure the effectiveness of actual staffed shifts to staffed shifts required for
actual beds open.
Utilisation
Definitions
Relating to the Specialty Summary Sheet
Acute Beddays Forecast
Data Source: Production Planning Process. Beddays have been forecast from the PVS. Each
contract has been through calculations to estimate expected volumes, expected beddays spent
across specialties and in general inpatient wards. This has then been phased using the average
daily occupancy by specialty in general inpatient wards extracted from CapPlan. Acutes are
acute admissions only (i.e arranged admissions are elective).
Explanation: The annual forecast established for planning.
Additional notes: Currently based on the original contracts, but will be based on delivery plans
in the future.
Elective Beddays Forecast
Data Source: Production Planning Process, as above. Electives are waitlist and arranged
admissions.
Explanation: The annual forecast established for planning.
Additional notes: Currently based on the original contracts, but will be based on delivery plans
in the future.
Total Beddays Forecast
Data Source: Production Planning Process, as above.
Explanation: The annual forecast established for planning.
Additional notes: Currently based on the original contracts, but will be based on delivery plans
in the future.
Required Beddays
Data Source: Production Planning Process. Beds required has been calculated by setting the
average monthly forecast for acutes at 85% capacity and the average monthly forecast for
electives at 95% capacity.
Explanation: The beds required are the sum of the total beds expected to be required in order
to deliver to the forecast.
Acute Utilised Beddays
Data Source: CapPlan extract. The information is extracted daily.
Explanation: The sum of the acute average daily occupancy, over the period in general
inpatient beds by specialty.
Elective Utilised Beddays
Data Source: CapPlan extract. The information is extracted daily.
Explanation: The sum of the elective average daily occupancy over the period, in general
inpatient beds by specialty.
Outsourced Utilised Beddays
Data Source: CapPlan extract. The information is extracted daily.
Explanation: The sum of the average daily occupancy over the period in outsourced wards by
specialty.
Total Utilised Beddays
Data Source: CapPlan extract. The information is extracted daily.
Explanation: The sum of the average daily occupancy over the period for general inpatient and
outsourced beds by specialty.
Utilised vs Forecast
Purpose: To measure actual utilisation against forecast.
% Outliers
Data Source: CapPlan extract. The information is extracted daily.
Explanation: An outlier is where the patient is placed in a general inpatient ward outside of
their specialty cluster.
In addition, it must be clear to everyone, including medical staff how the capacity plan has been developed and what their
responsibilities are towards responsible management of what has been planned.
Exercise 7.10: What is an acceptable number of patients that can or should be looked after in a ward that is not their designated
home ward? Is it none, 5%, 10% or more?
We very rarely did better than 10% outliers, and in fact came to view this as a reasonable number. To do better than this requires
too much redundant capacity.
Exercise 7.11: Before you start this section write down the things that you are doing to maximise the capacity you have to treat
people. Compare what you have written down with each of the suggestions that follow. How many did we have in common? What
other things are you doing – let me know.
Exercise 7.12: These are interesting measures to propose as quality indicators, more often they are viewed as operational
efficiency targets, what do you think?
Clearly I view these measures as quality indicators. Hospitals are dangerous places and you don’t want to be in them if you don’t
have to be. Equally, if things go wrong you usually end up staying longer. Most of all though, in my production line view of treatment, I
am either waiting for something or having something done. The longer I have to wait the less satisfied I would be. As a customer I
clearly would believe ALOS to be very important.
Exercise 7.13: This Exercise is not for the faint hearted. Join the Australasian Health Roundtable, or similar organisation (?), and
replicate the process described above. Wishful thinking I know, but if you cant do the exercise in a disciplined away then don’t do it, you
are more likely to learn something you don’t want to, from a voluble enthusiast somewhere dangerous18.
In the attachment to this book on the section on capacity management, you will find a set of Bill Kricker notes: Notes 46 HRT ALOS,
which describes the process in detail should you want to develop further insights before embarking on joining the HRT or similar. If you
are already a member of the Australasian HRT you might find the notes useful in understanding what you might need the HRT to do for
you.
Exercise 7.14: You guessed it. Replicate the data tables in this section on number of patients by length of stay, by age, and by
clinical unit. You are going to need the underlying capability for what comes next.
Exercise 7.15: Implement a Stranded Patient Program in Your Organisation.
Exercise 7.16: Assuming you have been using the department of orthopaedics as you performance planning example in the
exercises so far, calculate the average number of days acute/emergency patients wait from time of presentation to time of surgery. If
you are using a different unit you can still do the same thing. How long is the queue, how many people are in it? What is the average
wait, what proportion of people get what they need in 24 hours, 48 hours, more than 48 hours? Is this OK? What are you going to do
now?
In the attachment to this book, on capacity management you will find a “traffic light report” that tracks the performance of emergency
surgery within certain parameters which describe “good”. The targets are 80% of patients receiving surgery within 24 hours of going on
the theatre list, and 100% in 48 hours.
To give you some idea of the visual effect, this is what the report looks like as a long run measure of process tolerance and
effectiveness:
This gives one an idea of how effective the acute service is, but also by extrapolation, how many people are waiting excess days for
something to happen – waiting consumes bed days, while increasing the chance something bad is going to happen to the patient while
they wait (not universally but generally).
18
I keep making this comment, but I will make it again. Don’t worry if you cant do this first time around. If you are an organisation of any serious
size, it is going to take a minimum of three years to find competent help, and to get them lined up to do this work, which will require a number o
iterations. I know most organisations don’t think they have three years, which is why they struggle for decades.
Exercise 7.17: Patients present all times of the day and night, it is not reasonable to have senior doctors available then. Examine
this statement and tell me what is wrong with it. Think beyond the obvious!
I wont go into detail here, there is not enough time or space, however I want you too think about whose interests are best served by
a patient being seen by a specialist for the first time after their admission, the day after they arrived. In the graph below the blue line
represents the arrival rate of patients in a metropolitan emergency department and the bars represent the number of patients in the
department.
If one were to suggest that a specialist see the person on the day they arrived (or say within 8hours of their arrival), the immediate
response by medical staff would involve apocalyptic descriptions of elderly doctors getting burnt out wondering the corridors at night.
But this is of course is not based on any facts. Here are two facts:

The highest presentation rate for emergency patients is in the middle of the day.

By 8 in the evening the presentation rate for new emergency patients is already declining rapidly.
So, instead of piling up the patients in the wards to await the visit of the specialist the next day, when everything has been sorted,
and all the test results are back, a specialist could see the patient on the day of their admission and still largely be home and in bed by
midnight.
Now we just need to start re-arranging the doctors to suit the patients (and the number of unnecessary tests would decline, the
number of unnecessary admissions would go down, the ED 6 (or 4) hour target would be met (easily).
Amazing what one could do with a bit of competent management based on facts.
Exercise 7.18: If you plan to run a hospital at a utilisation of less than 100% why does it always run at a higher level? It must be
more patients arrived than planned right?
This question is really food for thought for the section on staff planning, but some of the obvious causes include:

Overlaps in patients arriving and departing on a given day.

Episodic or one-off variations in demand, or discharge.

Poor staff scheduling
The last one is probably the most interesting and the least understood. If you are planning to run a ward at more than 90%
utilisation you cannot afford to not have staff when you need them, or have too many on a shift when you don’t. Poor staff scheduling
(or rostering as it is more commonly known) is a known issue, but it is only when one starts to master plan capacity that consequences
of poor rostering can be measured in lost supply.
Exercise 7.19: Choose a clinical unit (eg: orthopaedics), and run through the process of translating a performance plan into a
capacity plan, including the relevant meetings as described.
The elements of the process are as follows:
Develop a view of how many patients were admitted into a clinical unit, what the day case percentage was, and what the length of
stay for the multiday patients was.
This should allow you to determine how many bed days will be required if nothing changes.
Factoring in utilisation rates will allow you to work out how many bed days and therefore staffed beds will be required to meet that
units demand, if nothing changes.
Produce this information in a professional manner and circulate it to the people who will need to be involved – the RC owner19.
Now have (another) conversation with the clinical unit leader / clinical director about what is going to change, for example:

All patients will now be admitted on day of surgery (and a plan exists for this to happen)

No patients will wait longer than 24 hours for their acute/emergency surgery (and a plan exists or is developed for this)

We are aiming to increase elective surgical volumes by “X”

Etc..
Now re-model the capacity required using the new information.
It is understandable if this seems daunting, but there are reasonably easy to use tools available. Again I am going to show you
some Australasian HRT tools in pdf version that were developed specifically for this purpose.
i.e.
Changing activity, ALOS and therefore bed days for a Clinical Unit by DRG’s can be done using a tool such as shown in this pdf:
Which will generate a summary for the clinical unit, for example:
19
One cannot over estimate the importance of getting the RC owners, clinical or otherwise, into a program where they can be taught
management as you practice it. I used my hospital cabinet/executive as a classroom to this end. There is no point in having a person form some
administrative group turn up and try to make an appointment with a senior clinician. If it is important, everybody demonstrates that it is important by
doing it, and appearing to do it, and preparing to do it………it cant be important if the senior management think someone else somewhere else should
do this stuff.
Each clinical unit performance and capacity plan could be rolled up automatically for you as follows
So although this task sounds almost impossible, it is not the technical component that will be the problem, it will be your
determination to practice competent management, and your persistence in doing so.
Once you have worked out what it is you are trying to do, the tools to do so are generally around, even if they are not (yet) perfect.
Substituting some other behaviour for actual management wont help your organisation, so start to do the tings you need to do, no
matter how clumsy its seems at first.
Exercise 7.20 Advanced Practice: You need to find a way to production-ise the reports required to production plan (performance
and capacity), and to establish the planning and reporting cycles. Produce a plan to do this that meets the accountability criteria for any
Resource Centre. Who will do what and by when to get this practice up and going?
You can and you should. This is operational and general management.
Exercise 7.21: Do you think that the graph above, discharges by day of the week, shows that the patients admitted earlier in the
week are discharged later in the week? Is that why Friday is such a big discharge day?
You are probably getting used to my quirks now, but one insight that occurred to me, was that I had always assumed that people
came in on Monday for elective surgery and went home Friday. This makes sense. For 5 day planned stay come in Monday, leave
Friday, for 4 day planned stay come in on Tuesday, leave Friday. Of course this is nonsense. The variation in admission and
discharges is a figment of clinician behaviour: I wont be coming in on the weekend, so I better get as many out as possible. Length of
stay for multi-day patients is prolonged by the weekend (waiting around), not hastened by the weekend (planned to come in and get out
so you don’t have to wait around over the weekend.
This is not in anybody’s behaviour.
Exercise 7.22: It has always seemed odd to me that we measure wait times for people in the elective healthcare business part of
our operations, but not (until ED targets were introduced) in our acute healthcare business. Why is wait time more important in the
acute / emergency business, and what should we be using as a KPI for elective services?
Wait time is more important in acute/emergency care because the entire patient episode happens in hospital, where the patient
turns up with a problem, and they wont get better until someone works out what is going on and does something about it20.
Time is therefore of the essence and all well designed systems should build in redundancy so that the wait is minimised. Is it not
strange then that patients are unlikely to see an inpatient specialist in the first 24 hours of their admission?
In elective care time is not of the essence, within reason. As long as the care episode occurs within a couple of days to weeks to
months (God forbid), it does not matter. It is just as important that the patient has some certainty as to when in the future the episode
will occur so they can arrange child care, someone to feed the dog, for the mail to be diverted etc.
Unfortunately because health system owners set time windows for elective care to occur, and quite rightly so, we have become
obsessed with clock watching in the wrong direction.
The world is a funny place is it not?
20
65% of all people admitted to a ward from the Emergency Department have no form diagnosis !!