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Library of Congress Cataloging-in-Publication Data
Kros, John F.
Health care operations and supply chain management : operations, planning, and control / John F. Kros, Evelyn C. Brown.—First edition.
pages cm
Includes bibliographical references and index.
ISBN 978-1-118-10977-9 (pbk.); ISBN 978-1-118-41884-0 (ebk.);
ISBN 978-1-118-41610-5 (ebk.); ISBN 978-1-118-43367-6 (ebk.)
1. Health facilities—Business management. 2. Health services administration. I. Brown, Evelyn C., 1966- II. Title.
RA971.3.K767 2013
362.1068—dc23
2012033935
| Table 1.1 | Major Causes of the Bullwhip Effect |
| Table 2.1 | For-Profit and Not-for-Profit Health Care Financial Statements |
| Table 2.2 | Key Health Care Financial Ratios |
| Table 3.1 | Six Cost Drivers and Health Care Examples |
| Table 3.2 | Activities and Cost Drivers for the Nurse’s Station |
| Table 3.3 | Formulas for the Cost per Unit Driver Calculations |
| Table 3.4 | Formulas for the Total Cost per Activity Calculations |
| Table 3.5 | Formulas for the Traditional Method of Indirect Cost Assignment |
| Table 4.1 | DRG Category Data |
| Table 4.2 | Common Measures of Central Tendency in Health Care |
| Table 4.3 | Emergency Room Waiting Time Information |
| Table 4.4 | Daily Census for Rehabilitation Center |
| Table 4.5 | ER Wait Times with Wait Time Distribution |
| Table 4.6 | ER Wait Times with Expected Wait Time Calculated |
| Table 4.7 | Descriptive Statistics of Two Populations |
| Table 4.8 | Novine’s Average Prescription Data |
| Table 4.9 | Summary Statistics for Novine’s Pharmacy Receipts |
| Table 4.10 | Excel Formulas for Box Plot |
| Table 4.11 | Tornado Diagram Data Set |
| Table 5.1 | Possible Outcomes for Medical Equipment Example |
| Table 5.2 | Payoff Table for Medical Equipment Example |
| Table 5.3 | Sarah’s Equipment Payoff Table (Percent Return) |
| Table 5.4 | Summary of Final Medical Equipment Example Choices |
| Table 5.5 | Definitions and Quantifications of Risk |
| Table 5.6 | Range Calculations for the Medical Equipment Example |
| Table 5.7 | Minimax Regret Calculations for the Medical Equipment Example |
| Table 5.8 | Medical Equipment Decision Tree Expected Values |
| Table 6.1 | Excel Formulas for Queuing Example |
| Table 6.2 | Excel Formulas for Summary Statistics |
| Table 7.1 | Value Stream Mapping Symbols |
| Table 7.2 | Examples of Health Care Productivity and Efficiency Measures by Facility Type |
| Table 8.1 | Types of Facility Layouts |
| Table 8.2 | Reasons for Closeness Rating |
| Table 8.3 | Importance of Relationship |
| Table 8.4 | Design Evaluation Criteria |
| Table 8.5 | Impact Analysis of Aisle Arrangement |
| Table 8.6 | Design Alternative Metrics |
| Table 8.7 | Patient Traffic per Week |
| Table 8.8 | Patient Movement Costs |
| Table 9.1 | Control Chart Data Set |
| Table 9.2 | Factors for Determining Control Limits |
| Table 9.3 | MiniCase Cleaning Delay Information |
| Table 10.1 | Areas of Interest and Associated Quality Control Systems |
| Table 10.2 | Factors or Computing Control Chart Limits (Three Sigma) |
| Table 10.3 | Formulas for Control Chart Spreadsheet Calculations |
| Table 10.4 | Control Chart Patterns |
| Table 10.5 | Formulas for Process Capability Spreadsheet Calculations |
| Table 12.1 | Example Data Set for Hospital (Beds Demanded) |
| Table 12.2 | Hospital Charge/Length of Stay Data for Linear Regression Computation |
| Table 12.3 | Patient Satisfaction Data for Linear Regression Computation |
| Table 12.4 | Excel Formulas for Error Calculations |
| Table 12.5 | Error Measurements for Glucose Example |
| Table 13.1 | Direct Ranking Method Example |
| Table 13.2 | Deriving Weights from Importance Ratings |
| Table 13.3 | Data for Example Project |
| Table 13.4 | Early Start Schedule |
| Table 13.5 | Late Start Schedule |
| Table 13.6 | Slack for Project Activities |
| Table 13.7 | Project Crashing Example |
| Table 13.8 | Health Care Project Example |
| Table 14.1 | Workforce Scheduling Packages |
| Table 14.2 | Johnson’s Rule Example |
| Table 14.3 | Formulas and Brief Explanatory Notes for Figure 14.9 |
| Table 14.4 | Demand Locale Data for Outpatient Clinic |
| Table 14.5 | Formulas to Accompany Spreadsheet in Figure 14.17 |
| Table 14.6 | Laboratory Jobs Processing Times |
| Table 14.7 | Billing Inquiry Processing Times |
| Table 14.8 | Senior/Community Center Location Data |
| Table 14.9 | Health Care Facility Location Data |
| Table 15.1 | Differences between Periodic and Continuous Inventory Systems |
| Table 15.2 | Inventory Data |
| Table 15.3 | Percent Total Dollar Volume Data |
| Figure P.1 | Graph of Projected Health Expenditures |
| Figure P.2 | Health Expenditures as a Percentage of Gross Domestic Product |
| Figure 2.1 | Operating Statement for a Health Care Organization |
| Figure 2.2 | Balance Sheet for a Not-for-Profit Health Care Organization |
| Figure 2.3 | Statement of Cash Flows for a Health Care Organization |
| Figure 2.4 | Graphical Break-Even Analysis |
| Figure 2.5 | Crossover Graph |
| Figure 3.1 | Flowchart/Process Map for the Nurse’s Station Example |
| Figure 4.1 | Histogram for Daily Recorded DRG Codes |
| Figure 4.2 | Relative Frequency Diagram |
| Figure 4.3 | Excel Options Window |
| Figure 4.4 | Excel Add-Ins Choices within the Options Window |
| Figure 4.5 | Excel Add-Ins Menu |
| Figure 4.6 | Data Analysis Window |
| Figure 4.7 | Excel Spreadsheet to Accompany Histogram Example |
| Figure 4.8 | Histogram Dialogue Box |
| Figure 4.9 | Histogram Dialogue Box with Specific Graphing Options Checked |
| Figure 4.10 | Histogram with Cumulative Percentage Overlay |
| Figure 4.11 | Reject/Accept Regions for Two-Tailed t-Tests |
| Figure 4.12 | Pharmacy Data in Excel |
| Figure 4.13 | Tools Menu and Data Analysis Option in Excel |
| Figure 4.14 | t-Test: Two-Sample Assuming Equal Variances Option in Excel |
| Figure 4.15 | t-Test Dialogue Box in Excel |
| Figure 4.16 | Data Analysis Output for t-Test |
| Figure 4.17 | Pareto Diagram in Excel |
| Figure 4.18 | Pareto Diagram with 80 Percent Mark Displayed |
| Figure 4.19 | Basic Box Plot |
| Figure 4.20 | Data for Box Plots |
| Figure 4.21 | 2-D Stacked Column Option |
| Figure 4.22 | Stacked Column Graph after Column Switch |
| Figure 4.23 | Error Bar Menus |
| Figure 4.24 | Input Window for Error Bar Input |
| Figure 4.25 | Format Error Bars Menu |
| Figure 4.26 | Special Value Input Menu |
| Figure 4.27 | Box Plot Graph after Error Bar Formatting |
| Figure 4.28 | Final Box Plot Graph |
| Figure 4.29 | Insert Tab and Bar Chart Option Menu |
| Figure 4.30 | Preliminary Bar Chart for Tornado Diagram |
| Figure 4.31 | Format Axis Menu x-Axis |
| Figure 4.32 | Format Data Series Option Screen |
| Figure 4.33 | Format Axis Menu y-Axis |
| Figure 4.34 | Tornado Diagram |
| Figure 5.1 | Decision Tree for Litigation Example |
| Figure 5.2 | Excel Spreadsheet for Sarah’s Equipment Payoff Table |
| Figure 5.3 | Excel Spreadsheet for Maximax Decision Criterion |
| Figure 5.4 | Excel Spreadsheet for Maximin Decision Criterion |
| Figure 5.5 | Excel Spreadsheet for Minimax Regret Decision Criterion |
| Figure 5.6 | Excel Spreadsheet for Hurwicz Criterion |
| Figure 5.7 | Sensitivity Analysis Data Calculations |
| Figure 5.8 | Final Chart Output in Excel |
| Figure 5.9 | Scatter Chart Menu in Excel |
| Figure 5.10 | Insert Chart Menu in Excel |
| Figure 5.11 | Format Axis Option after Right Click in Excel |
| Figure 5.12 | Format Axis Menu in Excel |
| Figure 5.13 | Layout Tab for Modifying Graphs in Excel |
| Figure 5.14 | Move Chart Option for Modifying Graphs in Excel |
| Figure 5.15 | Move Chart Dialogue Box for Modifying Graphs in Excel |
| Figure 5.16 | Excel Output for Medical Equipment Sensitivity Analysis |
| Figure 5.17 | Payoff Table for Sarah’s Medical Equipment Example |
| Figure 5.18 | Decision Tree for Sarah’s Medical Equipment Example |
| Figure 5.19 | Decision Tree for Sarah’s Medical Equipment Example under Equal Likelihood Scenario |
| Figure 5.20 | Multistage Decision Tree Example |
| Figure 5.21 | Excel Options Button |
| Figure 5.22 | Excel Options Window |
| Figure 5.23 | Excel Add-Ins Menu |
| Figure 5.24 | TreePlan Option in Add-Ins Tab |
| Figure 5.25 | Initial TreePlan Menu |
| Figure 5.26 | Initial Decision Tree |
| Figure 5.27 | TreePlan Formula Example |
| Figure 5.28 | TreePlan Add/Change/Modify Dialogue Box |
| Figure 5.29 | Decision Tree with Event Node Added |
| Figure 5.30 | TreePlan Menu for Modifying an Existing Node |
| Figure 5.31 | Example Tree Depicting Data Entry Areas |
| Figure 6.1 | Process Flow at Low-Acuity Emergency Department |
| Figure 6.2 | Graph of Multinomial Distribution |
| Figure 6.3 | Graph of Poisson Distribution (λ = 5) |
| Figure 6.4 | Graph of Exponential Distribution |
| Figure 6.5 | Graph of Normal Distribution |
| Figure 6.6 | Discrete Simulation Flow for Process of Figure 6.1 |
| Figure 6.7 | Excel Screen Shot for Military Recruit Blood Work Example |
| Figure 7.1 | Process Map for Room Turnover Process |
| Figure 7.2 | Current State Map |
| Figure 7.3 | Future State Map |
| Figure 7.4 | Staffing Profile |
| Figure 7.5 | Process Flow at Low-Acuity Emergency Department |
| Figure 8.1 | Hospital Unit |
| Figure 8.2a | Centralized Medication Storage |
| Figure 8.2b | Decentralized Medication Storage |
| Figure 8.3 | Muther Diagram for Health Care Example |
| Figure 8.4 | Alternative Designs for Evaluation |
| Figure 8.5 | Graphical Solution to Health Care Example |
| Figure 8.6 | Excel Formulation for Health Care Example |
| Figure 8.7 | Solver Parameters Dialogue Box |
| Figure 8.8 | Add Constraint Dialogue Box |
| Figure 8.9 | Solver Parameters for Health Care Example |
| Figure 8.10 | How to Set Integer Constraints for Health Care Example |
| Figure 8.11 | Final Step When Setting Integer Constraints |
| Figure 8.12 | Final Solver Parameters Dialogue Box for Health Care Example |
| Figure 8.13 | Solver Options Dialogue Box |
| Figure 8.14 | Final Results for Solver for Health Care Example |
| Figure 8.15 | Possible Department Layout |
| Figure 9.1 | Check Sheet for Admission Delays |
| Figure 9.2 | Example Flowchart for Patient Check-In and to Room Process |
| Figure 9.3 | Cause-and-Effect or Fishbone Diagram |
| Figure 9.4 | Histogram for Delay Times |
| Figure 9.5 | Pareto Diagram for Medical Documentation Errors |
| Figure 9.6 | Scatter Diagram of Patients per Day versus Day of the Week |
| Figure 9.7 | X-Bar Control Chart Example |
| Figure 9.8 | Control Chart with Control Limits and Zones |
| Figure 9.9 | DMAIC Process |
| Figure 9.10 | Six Sigma DMAIC Process Metrics |
| Figure 10.1 | Spreadsheet for Control Chart Calculations |
| Figure 10.2 | x-Bar Chart |
| Figure 10.3 | R Chart |
| Figure 10.4 | Process Capability Spreadsheet Calculations |
| Figure 10.5 | House of Quality Example |
| Figure 11.1 | Sample Kanban |
| Figure 11.2 | Value Stream Map for Hennepin County Medical Center |
| Figure 12.1 | Trend Line |
| Figure 12.2 | Nonlinear Trend Data Pattern Example |
| Figure 12.3 | Seasonal Data Pattern Example |
| Figure 12.4 | Combined Trend and Seasonal Data Pattern Example |
| Figure 12.5 | Naive Forecast for Beds Demanded |
| Figure 12.6 | Data Analysis Dialogue Box |
| Figure 12.7 | Excel’s Moving Average Dialogue Box |
| Figure 12.8 | Three- and Five-Year Moving Averages for Bed Demand Time Series Data |
| Figure 12.9 | Graph of Baseline, Three-Year, and Five-Year Moving Averages |
| Figure 12.10 | Data Analysis Dialogue Box |
| Figure 12.11 | Excel’s Exponential Smoothing Dialogue Box |
| Figure 12.12 | Graph of Baseline and Exponentially Smoothed Bed Demand Data |
| Figure 12.13 | Lagged Time Series Example and Correlation Estimate |
| Figure 12.14a | Seasonal Data for Hospital Bed Example |
| Figure 12.14b | Graph of Seasonal Data for Hospital Bed Example |
| Figure 12.15 | Seasonally Sorted Demand Data |
| Figure 12.16 | Combined Graph of Original Time Series and Forecasted Data |
| Figure 12.17 | Scatter Plot of a Perfect Positive Linear Relationship |
| Figure 12.18 | Scatter Plot of a Perfect Negative Linear Relationship |
| Figure 12.19 | Scatter Plot Depicting a Curvilinear Relationship |
| Figure 12.20 | Scatter Plot Depicting No Linear Relationship |
| Figure 12.21 | Simple Linear Representation |
| Figure 12.22 | Regression Output from Excel for Patient Satisfaction Example |
| Figure 12.23 | Excel Output for Residual/Error Calculations |
| Figure 12.24 | Excel File Tab |
| Figure 12.25 | Excel Options Add-Ins Menu |
| Figure 12.26 | Add-Ins Dialogue Box |
| Figure 12.27 | Glucose Area Data Set |
| Figure 12.28 | Data Analysis Option in Excel |
| Figure 12.29 | Data Analysis Options Menu |
| Figure 12.30 | Data Analysis Regression Menu |
| Figure 12.31 | Regression Output for Glucose Data Set |
| Figure 12.32 | Data Analysis Menu Option in Excel Ribbon |
| Figure 12.33 | Data Analysis Dialogue Box in Excel |
| Figure 12.34 | Correlation Menu in Excel’s Data Analysis Package |
| Figure 12.35 | Correlation Matrix for Age and BMI |
| Figure 13.1 | Generic Work Breakdown Structure |
| Figure 13.2 | Network for Simple Project Example |
| Figure 13.3 | Network for Health Care Project Example |
| Figure 13.4 | Gantt Chart for Health Care Project |
| Figure 13.5 | Resource Leveling—Delaying Activity D |
| Figure 13.6 | Resource Leveling—Delaying Activity E |
| Figure 13.7 | Project Data |
| Figure 13.8 | Project Data Formulas |
| Figure 13.9 | Intermediate Step—Gantt Chart Creation |
| Figure 13.10 | Gantt Chart in Excel |
| Figure 13.11 | Activity-on-Arc Network Diagram |
| Figure 13.12 | PERT Example in Excel |
| Figure 13.13 | Network for Electronic Medical Records Implementation |
| Figure 14.1 | Aggregate Planning Hierarchy in a Health Care Organization |
| Figure 14.2 | Scheduling Framework for a Health Care Organization |
| Figure 14.3 | One-Dimensional Horizontal Matrix with Five Job/Patient Slots |
| Figure 14.4 | Johnson’s Rule First Iteration |
| Figure 14.5 | Johnson’s Rule Second Iteration |
| Figure 14.6 | Johnson’s Rule Third Iteration |
| Figure 14.7 | Johnson’s Rule Fourth Iteration |
| Figure 14.8 | Johnson’s Rule Fifth and Final Iteration |
| Figure 14.9 | Spreadsheet to Accompany Johnson’s Rule Patient Processing Problem |
| Figure 14.10 | Gantt Chart for Patient Scheduling Problem |
| Figure 14.11 | Stacked Bar Option |
| Figure 14.12 | Initial Bar Chart for Gantt Chart Creation |
| Figure 14.13 | Data Option Menu |
| Figure 14.14 | Preliminary Gantt Chart for First Process Complete Paperwork |
| Figure 14.15 | Formatted Gantt Chart |
| Figure 14.16 | Coordinate Locations for the County Demand Locales |
| Figure 14.17 | Excel Spreadsheet for Center of Gravity Method |
| Figure 15.1 | Spreadsheet Model Using Given Value of Q |
| Figure 15.2 | Cost Formulas for Figure 15.1 |
| Figure 15.3 | Spreadsheet Model Using Formula to Calculate Economic Order Quantity |
| Figure 15.4 | Cycles in a Periodic Review System |
| Figure 15.5 | Periodic Review Journal Entries for Health Care Corp. |
| Figure 15.6 | Formulas for Figure 15.5 |
| Figure 15.7 | Continuous Review Journal Entries for Health Care Corp. |
| Figure 15.8 | Formulas for Figure 15.7 |
| Figure 15.9 | Inventory Data |
| Figure 15.10 | Percent Total Dollar Volume Data |
| Figure 15.11 | Sorted Data |