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Hospital Topics Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/vhos20

An Analysis of Health Care Production in Hospitals: A View of Sub-System Outcomes a

Alan H. Leader D.B.A. & Michael H. Payne a

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Western Michigan University , Kalamazoo, USA

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Forest View Psychiatric Hospital , Grand Rapids, Mich., USA Published online: 13 Jul 2010.

To cite this article: Alan H. Leader D.B.A. & Michael H. Payne (1976) An Analysis of Health Care Production in Hospitals: A View of Sub-System Outcomes, Hospital Topics, 54:1, 35-39, DOI: 10.1080/00185868.1976.9952375 To link to this article: http://dx.doi.org/10.1080/00185868.1976.9952375

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An Analysis of Health Care Production in Hospitals: A View of Sub-systemOutcomes

ALAN H. LEADER, D.B.A., isprofessor of management, Western Michigan University, Kalamazoo. He received his bachelor's and masterS degrees from the University of Rochester, Rochester, N.Y., and his doctorate from Indiana University, Bloomington, in administration, rnanagement and behavioral sciences. ospital administrators at all levels find the identification and measurement of department and service outputs to be a great deal more difficult than counting the number of dollars spent or received. The administrator who desires to improve the effectiveness and the efficiency of his area of responsibility faces several important considerations. 1. He needs to be able to compare his hospital with others. Any comparison is made difficult by differences in geography, available labor skills, diversity in patients' needs, medical specialties in the community, etc. Techniques for comparing require both a definition of these outputs and procedures for their measurement. 2. On an individual, departmental or total hospital level, productive achievement is aided by a regular appraisal of performance based on actual objective accomplishment compared to planned production of outputs. Discussions of personality attributes or attitudes are frequently counter-productive. Replacing these with examinations of performance outcomes leads to increases in effectiveness. 3. As the physicians' and patients' requests for services change, a reexamination of the role of the hospital and its sub-units may be desirable. One concept in current consideration sees the hospital as a Health Care Holiday Inn providing sterile, good and bureaucratically stabilized services for all. Another views hospitals as gigantic emergency rooms, a place where only those who are in critical need are served.

MICHAEL H. PAYNE, administrator, Forest View Psychiatric Hospital, Grand Rapids, Mich., since July 1973, received a B. B.A. degree from Western Michigan University in 1971, and spent a year as administrative assistant to the chairman, department of management, after graduation.

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JANUARY/FEBRUARY 1976

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A third model looks like an out-patient shopping center with the few over-night guests confined almost exclusively to surgery and OB patients with the average length of stay measured in hours rather than in days. However the hospital's mission is defined, health care is dispensed on a one-to-one basis. Each patient may for a single illness receive health care from a number of departments. Each department's objectives need to be carefully defined and considered in relation to every other department's objectives. They must all contribute to the objectives of the entire hospital. Some departments are more critical for the total efficiency of the hospital than others. Errors made in one department may be costly while errors made in another may be disastrous. Rather than automatically build in cost escalation by budgeting each department at last year's level plus a percentage, a periodic review of the outputs to be produced and the resources needed by each department will guard against the tendency to over-fund inefficient departments at the expense of the better managed. The relevant question at the end of each budget period is not how hard did everyone work but rather, how much did each department produce. Did each unit in the hospital achieve its planned output goals? Did each unit operate at or surpass planned levels of efficiency? Did productivity in the departments irnprove or deteriorate? Do we know enough about how each individual contributes to the department's output to accurately describe recruiting, selection, and training needs?

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Can we describe the desired outputs rather than the usual activities so that we can take advantage of human creativity and imagination without either stifling innovation or significantly risking the hospital's mission? 8. We need to be able to respond to questions and criticisms from persons and groups both inside and outside the hospital. Hospital personnel must understand and relate health care costs to actual output levels of health care. It is insufficient to plead that the quality of health care has also gone up. The question is how do you measure the productive output of hospital services so that costs and benefits can be jointly evaluated? It may be that new departments should be formed from those currently in existence or to supplement those outputs now being produced. In some situations services may have to be discontinued. These kinds of decisions can be made only if the departmental outputs are identified and the hospital's effectiveness as a total entity studied.

Purpose of this Article This study is not intended to duplicate the work of PAS or MAP. Rather, a critical informational area complementary to those programs will be supplied. The data collection methods employed will be described and the interpretive procedures that resulted in the matrices that form the content of this article will be discussed. These matrices provide a large, although probably not exhaustive description of the objectives or outcomes generated by the departments in the hospitals included in our survey. These outcome listings are ways of identifying objectives and of determining whether or not these objectives are achieved. Possible and suggested sources of these data are given.' A description of how to read and interpret these matrices will be found followed by an example of how they might be used. Systems theory and familiarity with hospital organization suggests that it is really a complex coordination of many separate but interrelated sub-systems, one for each hospital department, service or unit as in Figure 1. Much has been written about the activities and about the inputs that supply hospital departments. Prescriptions to "manage by objectives" to the contrary, the authors have found a dearth of information about sub-system outcomes. The description of these outcomes in observable, measurable terms rather than a description of how to produce them was our primary goal.

Figure 1. A Hospital as an Interrelated System of Departments, Services and Units

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All of the hospitals that were invited to participate did so, they are listed in Appendix A. The size of the sample was determined by continuing hospital selection and data collection until essentially no new information was found at the last hospital contacted. In practice of course, every hospital has some unique features and the decision to stop after (7) hospitals was partly judgmental. A t each of these hospitals interviews were sought with the hospital director. The purpose of our study was discussed and permission to interview each of the department heads and service directors was requested. In all cases, permission was granted. The (93) interviews that followed were conducted with each middle manager a t a private location in the hospital removed from interruption and work pressure, in an informal, non-threatening atmosphere. The interviewee was requested to respond to the following hypothetical situations: 1. Make believe that you and your counterpart at another hospital have a bet about which one of you has the better department. What instructions would you give to an objective outsider to determine who won the bet? What should such a person look at, whom should he talk to, what information should he collect? 2. Imagine that you were offered a like position by another prestigious hospital at an attractive salary. You want to determine the effectiveness and efficiency of that department before you make your decision about the job offer. What would you look at or ask about during your visit there? What data would you request them to supply you? These situations and questions, while easy to formulate, were difficult to answer. Our probing for outputs rather than activities was the additional stimulation needed to generate quite lengthy listings. Evaluation of existing departments was refused both to the department heads themselves and to the hospital directors. Invitations to suggest recommendations were similarly declined on the professional ground that organizational and administrative change is not to be undertaken lightly. Our commitment was to share our findings with those personnel who shared their knowledge with us. In all cases the authors were received with helpful cordiality. In spite of the great demands outsiders make on hospital administrators' time, we were given a full opportunity to pursue our data collection. We are deeply grateful to all who met with us.

Results

Outcome/data source matrices were prepared for twenty-nine departments, services or units commonly found in American hospitals. These matrices share certain common features and a consistent format to facilitate their understanding and to simplify their use (see Fig. 2). Each matrix contained three distinctly different, important and interrelated classes of information, outcomes, data sources, and suggested combinations of these. Continued on page 38

HOSPITAL TOPICS

Figure 3

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Please turn sideways

HOSPITAL TOPICS

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Sub-system T i t l e

Date Sources

Sub-system Dutcomes

1) Effectiveness 2) Efilciency

Potential and Suggested Cambinet i o n s

1) Where to go

f o r 0"tCOme IIlfonNtion, 2) What information reporting can be assigned t o a data source

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Figure 2 Hospital Sub-system Matrix Format

1. The row headings are departmental outcomes, the "production" justification for that department's existence and the measures of whether and to what extent the department is meeting its organizational mission. Measures of managerial and internal efficiency are also found here. These outcomes are grouped into 2 main categories: a. Effectiveness - what the department is designed to produce, the degree of actual achievement, and b. Efficiency - the relationship between production and resource utilization. 2. The column headings are data sources for the outcomes listed. Although not exhaustive, several sources available in most general hospitals are given for each outcome measure. Highly specialized or variant organizational designs may suggest additional or different sources. Because most hospitals share a number of common organizational features, the data sources have been standardized for all matrices. The data source "super" may require a brief explanation. In each department, service or unit there is some one person who is in charge, who bears the organizational responsibility for that portion of the hospital sub-system. This person is the super. 3. The cells determined by the intersection of row outcomes and column data sources identify potential combinations. Those cells containing "x"s are suggested sources for data on specific outcomes. Not all sources are equally desirable for measurement. Some yield more subjective rather than objective evaluations, some are more prone t o bias or political pressures against identifying shortcomings, and some are more obtrusive rather than unobtrusive. As might be expected however, the costs of collecting the data are also unequal. To assist the reader, an example, Housekeeping, will be examined in more detail. In the 1st category of outcomes, effectiveness, 5 measures are given ranging from "number of daily complaints of carpet static per month" t o "percent positive lab cultures per month." Five measures of efficiency complete the listing. (See Figure 3) An administrator concerned about the effectiveness of his housekeeping department might examine the outcomes listed and for his particular situation determine that general inspections, lab cultures, dirt complaints and rodenthnsect com-

JANUARY 1F EB R UA R Y 1976

plaints and accidents encompass the objectives for his department. A consideration of the possible sources for information about these measures suggests that the super complete a daily inspection, the lab complete a series of cultures daily and the nurses, other department heads and the hostess submit weekly reports to the assistant hospital administrator about complaints while the safety committee compiles a file on accidents. These information assignments become part of the job descriptions of the persons involved and therefore must be consistent with the intended organizational design. In many cases, the same data sources can be used to provide information appearing on several matrices. Such multiple-use sources are examples of external economies and the potential benefits of returns t o scale possible in larger, more specialized hospitals. The data collected can then be compared to the actual standards set and housekeeping effectiveness thereby evaluated. In such a similar fashion, a determination can be made of efficiency objectives, criterion measures chosen, standards agreed upon and organizational procedures designed t o routinely collect and report the necessary information. Such information not only serves as evaluative data but over time allows modification of the objectives themselves and provides a guide to organizational change. Similar matrix sheets covering most other hospital departments may be had by request from the authors.

Appendix A

- PARTICIPATING HOSPITALS

Battle Creek Sanitarium Battle Creek, Michigan 49017 Mr. Richard Lane, Administrator

Lakeview General Hospital Battle Creek, Michigan 49015 Mr. Clarence Simmons, Administrator Leila Y. Post Montgomery Hospital Battle Creek, Michigan 49016 Sister Charlene Curl, Administrator Lakeview Community Hospital Paw Paw, Michigan 49079 Mrs. Catherine Kelly, Administrator Memorial Hospital St. Joseph, Michigan 49085 Mr. Robert Bradburn. Administrator South Haven Hospital South Haven, Michigan 49090 Mr. Robert Traxler, Administrator Franklin Memorial Hospital Vicksburg, Michigan 49097 Mrs. Robina Bowers, R.N., Administrator REFERENCE 1. This study represents one of a projectedseries applying the perspective of systems analysis to the fuhctions of health care delivery in general and hospital administration in particular. Further projects under consideration include a tax-

onomy of managerial problems and the resulting decision guides, an analysis of manpower training needs, and aspects of health care evaluation and accountability.

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An analysis of health care production in hospitals: a view of sub-system outcomes.

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