Reducing Variation and Utilization

By Jeff Terry

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To better manage capacity, hospitals need to reduce variations in utilization and bring capacity in line with demand.

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  • Eric Buining February 7, 2011 7:50 AM

    A hospital is an organization with various clinical processes or value streams. Each value stream consist of a sequence of processes and tasks resulting in a clinical outcome. The capacity and the performance of such a value stream is determined by the capacity of the constraint. Each value stream has only one constraint. Therefore, managing capacity should be done at the level of the value streams and not at the level of local processing units.
    Bringing capacity in line with demand is and reducing variations in utilization is very difficult, since the demand is more or less unpredictable. One should strive to get people as quick as possible through the value stream or clinical process. This should result in more patients with the same resources and fixed assets.
    The focus of performance improvement therefore should be geared towards improving the performance of the constraints.

  • Chip Chapados August 8, 2013 9:04 PM

    There are three things that can be done to address variation in healthcare.
    1. Reduce or eliminate the non value added activity that take up clinical time, e.g. paperwork, unnecessary testing, patients placed into the wrong queues and wrong treatment buckets, etc.
    2. Standardize healthcare first around qualitative outcomes THEN work to make the cycle time of a unit of patient care less variable itself. It is not so much the amount of time of a patient visit, but rather the unpredictability of the patient visit cycle time that eats up capacity.
    3. Get away from batch approaches to healthcare, instead think more about a "cellular" medical service design instead of specialties in separate locations. This starts with better primary care in conjunction with specialty partners working as parts of the same teams. While not necessarily practical for all forms of medical needs, e.g neurosurgery, organ transplantation, etc. It can be done with at least 60% of medical services. A cellular model would reduce overall health costs probably by as much as 25%, if not more.

  • John August 9, 2013 7:11 AM

    Capacity can not be controlled by managing the number of patients coming in the door. Capacity can not be controlled by adding more beds, too expensive. Capacity can be improved with superior Patient Flow Management.

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