Overview and Application Areas
Common Methodologies Used
Examples of Typical Projects
Reference Material
 
 

Overview and Application Areas  (top) (back to SHS)
This document discusses some examples (not all inclusive) of the diversity of projects/activities that a management engineer typically gets involved with in his/her organization.  As in any industry, the industrial engineer or management engineer can have a major impact on the success of the organization by providing value added results.  The methodologies used by an industrial engineer or management engineer are applicable in many different healthcare settings, including:

    •  acute care facilities
    •  long term care facilities
    •  skilled nursing facilities
    •  home care agencies
    •  outpatient clinics
    •  insurance organizations, and
    •  physician practices/offices.
 
 

Common Methodologies Used  (top) (back to SHS)
Obviously the specific application may vary due to the particular setting, but the underlying methodology is the same.  Some of the more common methodologies as used in health care are described below and include:

    •  Scheduling Patients and Staff
    •  Space Planning and Utilization
    •  Organization Structure Evaluation
    •  Benchmarking
    •  Cost Reduction/Containment
    •  Computer Simulation
    •  Data Analysis and Presentation
    •  Quality Improvement Teams
    •  Work Redesign (Reengineering)
    •  Information Systems
    •  Materials Management
    •  Physician Practice Profiling
    •  Physician Office/Practice Consulting

A major determining factor of the types of projects undertaken depends upon where the department reports in the organization.  For example, if the management engineering department reports through operations, they typically probably will spend a lot of time on operational issues; to finance, on financial projects, etc.  In order to support the overall strategic direction of the organization, management engineers need to be closely linked to the executive level of the organization, and some departments therefore report directly to the COO or CEO.
 
 

Examples of Typical Projects  (top) (back to SHS)

1. Scheduling Patients and Staff  (list)

ME's work with managers to schedule everything from outpatient exams to X-rays to meals to surgical procedures. The significant expense of fixed equipment and labor resources makes optimal scheduling an essential financial strategy and patient service goal. Engineers may use statistical techniques such as Queuing theory, demand forecasting, and variance analysis, as well as interviews with patients, staff, and managers to assure optimum flow of patients and availability of staff. Objectives in this work include reduced patient waiting time, increased patient satisfaction, as well as increased staff productivity. Proper scheduling can avoid peaks and valleys in workload and reduce staff expenses.
 

2. Space Planning and Utilization  (list)

ME's use work place design (ergonomics), as well as people flow diagrams and materials flow principles to create functional space design. ME's also evaluate the utility of storage and archive systems and the space they can save compared to larger space requirements with paper storage. Space planners may design a one person office to have all work readily accessible and available, or may plan space planning for a multi-building medical campus so that service units are logistically located and activity flows smoothly from unit to unit. ME's also use proximity diagrams to optimize work flow (i.e., clinical laboratory should be near the Emergency department, but do not need to be near the Personnel department.)
 

3. Organization Structure Evaluation  (list)

ME's work with administrators to develop creative management structure options which assure excellent service and reduce cost. Number of layers of management, managers' span of control, multi-skilled workers, and assigning work to the lowest functional level are all useful techniques. Strategies include frequent consultation with administrative clients, providing several options, and their perceived benefits as part of evaluating organization structure.
 

4. Benchmarking (list)

Benchmarking is defined as the search for the best practices that will lead to superior performance. Benchmarking is a process for measuring your organization's methods, processes, procedures, and services against those organizations that are recognized as having the best practices. It is one of the tools commonly used as part of the continuous quality improvement or reengineering efforts. There are several databases (MECON-PEERx, VHA-Data Comparison Reporting System, CHIPS, etc.) that can be used to identify top performing organizations. The American Productivity and Quality Center's International Benchmarking Clearinghouse is an excellent resource center (713) 681-4020.

Reference Material:
Robert C. Camp, Benchmarking The Search for Industry Best Practices that Lead to Superior Performance. 1989, Quality Press, Milwaukee, WI.
Gregory H. Watson, The Benchmarking Workbook: Adapting Best Practices for Performance Improvements. 1992, Productivity Press.
 

5. Cost Reduction/Containment  (list)

Cost reduction/containment programs are perhaps one of the most significant activities ME's can lead. The strategies can range from extensive employee involvement/suggestion systems to activities focused on particular areas such as staffing and scheduling, skill mix analysis, materials usage analysis, and purchase cost comparisons. These activities can lead to significant savings with minimal investment in consulting or training expenses. The keys to successful cost reduction programs include setting reduction targets, creating a sense of urgency, encouraging manager and employee involvement in the process, management support and accountability, and organization-wide participation in the program.

Reference Material:
Strategies for Healthcare Excellence. COR Healthcare Resources; Santa Barbara, CA, 93140, (805) 564-2177.
 

6. Computer Simulation  (list)

Computer simulation is one of the tools used by ME's to plan new facilities, to assess the impact new equipment or personnel would have on process performance, to identify bottlenecks in processes, to address equipment and room utilization issues, and to assess inventory and supply levels. The animated computer models can be developed to study the system and to allow a team to suggest various "what if" scenarios and to quantitatively measure the performance of the system under these alternative operating conditions. The prime advantage of computer simulation is that computer models are much less costly than making changes in reality and testing these alternatives in "live settings".

Reference Material:
Charles Harrel, PhD and Kerim Tumay, Simulation Made Easy: A Manager's Guide. IIE Press, (770) 449-0460.
 

7. Data Analysis and Presentation  (list)

Many organizations are faced with an increasing amount of data, but are struggling to find the information contained in that data. ME's receive training in data collection and analysis techniques and can assist with that transformation. Analytic support may include benchmarking, modeling, simulation, and statistical analyses. They often communicate their findings through graphical presentation to enhance the users' understanding of the information.

Reference Material:
B. Rosner, Fundamentals of Biostatistics.1990, Duxbury Press, Belmont, CA.
 

8. Quality Improvement Teams  (list)

ME's can assist quality improvement efforts in several ways. Quality improvement teams use a systematic approach to studying processes, identifying improvement opportunities, and implementing improvement strategies. The process is data driven, requiring knowledge of data collection, data analysis, and data presentation techniques, including statistical process control. Many of the tools and techniques used in quality improvement are familiar to ME's who may provide training for teams, analytical support, or group process facilitation.

Reference Material:
E. Gaucher, R. Coffery, Total Quality in Healthcare. 1993, Jossey-Bass Publishers, San Francisco, CA.
P. Scholtes, The Team Handbook. 1988, Joiner Associates, Madison, WI.
W. Conway, Winning the War on Waste. 1994, Conway Quality, Inc., Nashua, NH.
 

9. Work Redesign (Reengineering)  (list)

Work redesign or "reengineering" efforts are aimed at fundamentally changing our work processes to achieve dramatic improvements in cost, quality, service, and throughput. Such efforts include "patient care redesign", the way we deliver services to selected groups of patients with similar clinical or resource consumption characteristics. ME's are well suited for leading or supporting such activities because of their focus on processes and their quantitative skills necessary for modeling new processes and measuring impact. It is often helpful to have an objective outsider involved on redesign teams, such as a ME who doesn't have ownership in the current way things are done.

Reference Material:
M. Hammer, J. Champy, Reengineering the Corporation. 1993, Harper Business, New York, NY.
M. Hammer, S. Stanton, The Reengineering Revolution. 1995, Harper Business, New York, NY.
James Champy, Reengineering Management. 1995, Harper Business, New York, NY.
J. Katzenbach, D. Smith, The Wisdom of Teams. 1993, Harvard Business School Press, Boston, MA.
 

10. Information Systems  (list)

ME's bring a systems approach to Information Systems projects. ME's may conduct user surveys of how information systems provide services to all departments, and conduct these surveys for physicians' offices and other users outside of the hospital. Surveys may ask users what they expect from the system, if the system is user friendly, if the support by IS staff is sufficient, and what is being done well, or not being done.

ME's interview key people in the organizations, users of the information systems, and members of the board to make sure the system is meeting the needs of the users and if it is not, what do they expect? ME's help develop action plans to improve the services and accuracy of the IS departments and coordinate system installations. Project Management software are valuable tools to assist in the installation monitoring process.
 

11. Materials Management  (list)

ME's bring an organized approach to materials management projects. Some projects include the establishment of appropriate charges for all purchased items, identify duplicate items from different vendors, and institutes standardized inventories. For instance, an ME may discover duplication of sutures in the Operating Room because of physician performance for one brand over another. Multiple brands mean increased inventory and funds not available for other needs.

ME's also assist outside information service vendors with the installation and education of staff with material management systems. During the process, we may development policies, procedures, and educated staff in the use of the new system and establish reasonable levels of inventory resulting in significant inventory decreases.

ME's reengineer the acquisition of inventory process by identifying all of the steps in the current system, flow charting those steps for clarification, and changing the system to allow for better control and improved service. This streamlining process results in reduced acquisition time, decreased cost, reduced inventory, and greater customer service.
 

12. Physician Practice Profiling  (list)

Management Engineers are well suited to provide the analytical expertise necessary to develop and deliver physician practice profiles. Practice profiles consist of an assessment of the resources (supplies, equipment, labor, and other materials) utilized during a patient's medical treatment. The patient's medical treatment may include an inpatient hospital stay or may simply be medical services provided on an outpatient basis. Use of statistical concepts, database management, decision support, cost accounting, and graphics, are skills possessed by the management engineer and essential to working the data into meaningful information.

The goal of this effort is to provide an incentive to reduce or remove costly and unnecessary aspects of medical care from the health care system. One way in which this incentive is being applied (primarily by outside firms) is the use of the practice data to choose the most cost efficient, high quality physician, hospital or other health care providers, for managed care plans and networks.

Outcomes data, including detailed patient clinical and billing data, are analyzed and then used to show where a physician's practice lies in relation to his/her peers or show comparisons to best demonstrated practice physicians. Performed collaboratively, these comparisons show potential opportunities in the form of variances from the norms.

Some of the variety of measures used in profiling include: length of stay (LOS), average billed charges, average total costs, specific ancillary charges/costs, mortality, morbidity, etc. Data are severity adjusted then evaluated to determine trends and patterns of practice in the utilization of resources.

Profiles are shared with physicians in either a one-on-one or group settings, and have been proven to effect positive change in the delivery of health care services. Behaviors change quickly when physicians and/or administrators are provided with factual information presented in a user-friendly, non-threatening manner.
 

13. Physician Office/Practice Consulting  (list)

Within a physicians' practice/office, management engineers have been involved with numerous different applications. In addition to those previously mentioned in this document, management engineers have the background to lead/assist with financial analysis, practice value determination, information/computer system RFPs and installations, work flow analysis and other essential business operations analyses. The management engineer's systems approach to analyzing the operations provides a well rounded, complete assessment of the practice.
 
 

Reference Material  (top) (back to SHS)

Robert C. Camp, Benchmarking The Search for Industry Best Practices that Lead to Superior Performance. 1989, Quality Press, Milwaukee, WI.
James Champy, Reengineering Management. 1995, Harper Business, New York, NY.
W. Conway, Winning the War on Waste. 1994, Conway Quality, Inc., Nashua, NH.
E. Gaucher, R. Coffery, Total Quality in Healthcare. 1993, Jossey-Bass Publishers, San Francisco, CA.
M. Hammer, J. Champy, Reengineering the Corporation. 1993, Harper Business, New York, NY.
M. Hammer, S. Stanton, The Reengineering Revolution. 1995, Harper Business, New York, NY.
Charles Harrel, PhD and Kerim Tumay, Simulation Made Easy: A Manager's Guide. IIE Press, (770) 449-0460.
J. Katzenbach, D. Smith, The Wisdom of Teams. 1993, Harvard Business School Press, Boston, MA.
B. Rosner, Fundamentals of Biostatistics. 1990, Duxbury Press, Belmont, CA.
P. Scholtes, The Team Handbook. 1988, Joiner Associates, Madison, WI.
Strategies for Healthcare Excellence. COR Healthcare Resources; Santa Barbara, CA, 93140, (805) 564-2177.
Gregory H. Watson, The Benchmarking Workbook: Adapting Best Practices for Performance Improvements. 1992, Productivity Press.