Reply to my classmate #1 Greetings classmates, this week’s discussion focused on operational metrics, benchmarking, and analysis. As addressed in previous discussions, for an operations manager to precisely manage a health care facility, knowing strategic planning and outcomes are required. Operations managers play a role in managing operational metrics as well as operational analysis because they are provided performance objectives that measure out all the needs and wants for a health facility. Operations managers also have access to key features such as where investment funding comes from and exactly how it is distributed. This discussion will explain why an operations analysis should consider an organization’s strategic objective, along with important things to consider in selecting operational metrics. This discussion will also describe a quantitative tool that can be used to develop benchmarks, including relative merits and drawbacks. To access operational analysis in an organization, it is important to be familiar with the term. Langabeer II and Helton defined operations analysis as “a tool in measuring progress toward strategic objectives and identifying ways to improve performance that meets those objectives” (Langabeer II & Helton, 2016, p.392). Ideally, operations analysis is a tool that can be utilized to determine strategic objectives to increase performance measures in a health facility. Melnyk and colleagues concluded that “strategy without metrics is useless and metrics without a strategy are meaningless” (Melnyk, Stewart, & Swink, 2004, para.3). Operations analysis should consider the organization’s strategic objective because each department under the organization will not have the same goals and performance measurers. For example, one department under an organization may experience higher patient volume compared to another department. Or, one department may experience limitations on inventory, whereas another department may not. Both examples are important measurements to consider when utilizing operations analysis. Langabeer II and Helton also explained that aligning strategic objectives with observational metrics is the first step in considering the operations analysis tool (2016, p.392). It is also important to consider performance measures, profit expenses, patient characteristics, and laboring staff when selecting operational metrics. Langabeer and Helton agreed that choosing the best metric for an operations analysis requires determining which result provides the best strategic objective (2016). Colleagues identified that the advantages of utilizing operations analysis included better resource and health outcome relationships, benchmarking efficiency values with other organizations, and operational performance (Cantor & Poh, 2017). As addressed in prior discussions, benchmarking is one of the major phases of process improvement methodology (Langabeer II & Helton, 2016). Gott defined benchmarking as comparing performance to standard objectives (Gott, 2010). In other terms, one organization reviews the performance outcomes of another organization and compares how they can use that objective for their facility. Benchmarking would not be defined as competing in a sense, but more so as finding better methods to provide better patient outcomes. A quantitative tool that could be used to develop benchmarks would be an external benchmark. An example of an external benchmark would be comparison of service cost through third party payers such as Medicare and Medicaid. Health care costs would be compared between Medicaid and Medicare to see which payer is spending out more money for the exact services. Cost comparison can branch out from hospital bed sizes, department volume, and expenses (Langabeer II & Helton, 2016). A drawback with using this tool, however, would be ignoring demographic areas. For example, Richmond County hospital services may be more expensive than Lynchburg County, but that is because the areas are different. If a manager is going to benchmark two organizations, it is ideal to make sure they are in the same demographic area for accurate measures. James 1:5 says, “If any of you lack wisdom, let him ask of God, that giveth to all men liberally, and upbraideth not; and it shall be given him” (KJV). This bible verse is saying that knowledge is good will to all, and not just some. If one health care organization is exceeding in performance outcomes, they should be willing to share that knowledge with another organization to enhance their performance outcomes. Benchmarking should not be seen as competition because the goal of all organizations should be to continuously provide efficient and quality care. References Cantor, V., & Poh, K. (2018). Integrated analysis of healthcare efficiency: A systematic review. Journal of Medical Systems, 42(1), 1-23. doi:10.1007/s10916-017-0848-7 Gott, K.J. (2010). A productivity practicum. Brentwood, TN: Applied Health Sciences Consulting. Holy Bible: King James Version Langabeer, J. R., & Helton, J. (2016). Health care operations management: A systems perspective. Jones & Bartlett Learning. Melnyk, S., Stewart, D., & Swink, M. (2004). Metrics and performance measurement in operations management: dealing with the metrics maze. Journal of Operations Management, 22(3). doi: 10.1016/j.jom.2004.01.004 Reply to my classmate #2 The term operations analysis represents a valuable tool to management in measuring progress toward strategic objectives and identifying ways to improve performance that meet those objectives (Langabeer II & Helton, 2016, pg. 392). Operations management work to determine how to express strategic objectives in measurement terms, measure performance against those objectives, identify gaps between actual and expected performance, and understand the cause of the differences and develop corrective actions (Langabeer II & Helton, 2016, pg. 392). Important Things to Consider in Selecting Operational Metrics According to Langabeer II and Helton, 2016, there are strategic steps in operations analysis and some important things to consider in selecting operational metrics to use in the operational analysis. Establishing operational metrics that are aligned with the organizational strategic objectives is the first step in the operational analysis (Langabeer II & Helton, 2016, pg. 392). Various operational metrics are commonly used in today’s hospitals. This operational metric depends on the manager’s perspective, whether it is determining input measures or output measures (Langabeer II & Helton, 2016). One metric that is commonly used is the adjusted average daily census (AADC). It determines the adjusted patient day volume (Langabeer II & Helton, 2016, pg. 171). The average length of stay metric is the incentive to minimize the number of days a patient stays before discharge (Langabeer II & Helton, 2016, pg. 171). Knowing the extent to which that capacity is being used can help determine if the organization is supporting unused capacity or is operating at a high level of utilization that could result in turning business away is known as the occupancy percentage metric (Langabeer II & Helton, 2016, pg. 172). The management of actual labor hours can be the key to effectively controlling labor costs that appear on financial statements is used by the FTE employees per occupied bed (FTE/OB) metric. The productive hours per unit metric evaluates the operational efficiency of a specific department (Langabeer II & Helton, 2016, pg. 173). They are just some to list, but there is a plethora of metrics used in healthcare to determine operations analysis. The second step to consider in operations analysis is to focus on those metrics that can be influenced by management action. The analysis must start with an evaluation of performance metrics that are important to the achievement of organizational objectives (Langabeer II & Helton, 2016, pg. 393). Last, monitoring operational performance will give an idea of the overall corporate performance. According to Langabeer II and Helton, 2016, looking a data across a full year is an excellent start to get an idea of performance (pg. 393). The 12-month view of operations can help to establish an average that can be used to add some context to monthly or quarterly analysis (Langabeer II & Helton, 2016, pg. 393). Quantitative Tool Used to Develop Benchmarks Benchmarking is comparing a measurement of operational performance to some objective standard (Langabeer II & Helton, 2016, pg. 402). As stated by Buckmaster and Mouritsen, 2017, benchmarking is a practice that uses relative performance – the ranking of entities' performance – to identify substances with superior performance, and this entity is then considered one from which it makes sense to learn. A quantitative tool that can be used to develop benchmarks, its merits, and drawbacks is the data envelopment analysis (DEA). The DEA can be used to consolidate the results of multiple ratios of inputs per unit of output into a single "best" performance benchmark (Langabeer II & Helton, 2016, pg. 404). According to Dénes, Kecskés, Koltai, and Dénes, 2017, the basic idea behind DEA are to determine the best practice frontier of efficient Decision-Making Units (DMUs) that envelops all inefficient DMUs. The DEA can normalize wider variation in data points used to create a benchmark, such as departments with high volumes of output in large physical spaces with varying labor inputs (Langabeer II & Helton, 2016, pg. 405). DEA is a recommended technique for hospital managers attempting to create a benchmark with data from organizations of varying scale (Langabeer II & Helton, 2016, pg. 405). However, the DEA has its limitations. Its limitations exist in areas such as not being able to account for nuanced variations among organizations being evaluated, differences in technologies in use, the skill level of staff, or pay practices (Langabeer II & Helton, 2016, pg. 408). Overall, the data envelopment analysis can provide useful synthesis in setting clear objective performance targets that lead to the achievement of organizational strategic objectives (Langabeer II & Helton, 2016, pg. 408). Biblical Integration The topic of operations analysis sounds intimidating to many, especially those who may be weak in the area of mathematics and statistics. Just hearing or seeing the word “analysis” can cause mental stress. As long as we Christians have God on our side, He can provide strength to the weak and give knowledge to individuals where they can perform such a task. It is all part of growing and evolving. The biblical verse Ecclesiastes 11:6 says, “Sow your seed in the morning and do not be idle in the evening, for you do not know whether morning or evening sowing will succeed, or whether both of them alike will be good” (Stanley, 2009, pg. 765). Diligence is a character trait that is vital to any successful venture (Stanley, 2009, pg. 766). One must take root in one’s character only through steadfast application and pursuit (Stanley, 2009, pg. 766). Success is not going to fall out of the sky, and it is not going to be given to us. It requires prayer and hard work. In other words, how bad do you want it? References Buckmaster, N., & Mouritsen, J. (2017). Benchmarking and learning in public healthcare: Properties and effects: Benchmarking and learning in public healthcare. Australian Accounting Review, 27(3), 232-247. doi:10.1111/auar.12134 Dénes, R. V., Kecskés, J., Koltai, T., & Dénes, Z. (2017). The application of data envelopment analysis in healthcare performance evaluation of rehabilitation departments in hungary. Quality Innovation Prosperity, 21(3), 127. doi:10.12776/qip.v21i3.920 Langabeer, J. R. II., & Helton, J. (2016). Health Care Operations Management: A Systems Perspective. Second edition. Burlington, MA: Jones & Bartlett Learning. Stanley, F. C. (2009). The Charles F. Stanley Life Principles Bible. New American Standard Bible. La Habra, CA: The Lockman Foundation. BUSI Discussion Board Rubric (50 Points) Content 70% Thread Content Advanced Proficient Developing Not Present Points: 18 to 20 Points: 17 Points: 1 to 16 All key components of the Discussion Board Forum prompt are answered in the thread. Some key components of the Discussion Board Forum prompt are answered in the thread. Minimal key components of the Not Present Discussion Board Forum prompt are answered in the thread. Major points are supported by Major points are supported by Major points are supported by none of the following: • Reading & Study materials; all of the following: some of the following): • Reading & Study materials; • Reading & Study • Pertinent, conceptual, or • Pertinent, conceptual, or materials; personal examples; • Pertinent, conceptual, or • Thoughtful analysis personal examples; • Thoughtful analysis personal examples; (considering assumptions, • (considering assumptions, Thoughtful analysis analyzing implications, and analyzing implications, and (considering assumptions, comparing/contrasting comparing/contrasting analyzing implications, concepts); and • concepts); and and comparing/contrasting Two peer-reviewed source • Two peer-reviewed source concepts); and citations in current APA • Two peer-reviewed citations in current APA format, the text and the format, the text and the source citations in current integration of 1 biblical integration of 1 biblical APA format, the text and principle. principle. the integration of 1 biblical principle. Points: 0 Replies Content Points: 14 to15 Points: 13 Points: 1 to12 Points: 0 Contribution made to discussion with each reply expounding on the thread. Marginal contribution made to discussion with each reply slightly expounding on the thread. Minimal contribution made to discussion with each reply slightly expounding on the thread. Not Present Major points are supported by some of the following): • Reading & Study materials; • Pertinent, conceptual, or personal examples; • Thoughtful analysis (considering assumptions, analyzing implications, and comparing/contrasting concepts); and • Two peer-reviewed source citations in current APA format, the text and the integration of 1 biblical principle. Major points are supported by none of the following: • Reading & Study materials; • Pertinent, conceptual, or personal examples; • Thoughtful analysis (considering assumptions, analyzing implications, and comparing/contrasting concepts); and • Two peer-reviewed source citations in current APA format, the text and the integration of 1 biblical principle. Proficient Developing Major points are supported by all of the following: • Reading & Study materials; • Pertinent, conceptual, or personal examples; • Thoughtful analysis (considering assumptions, analyzing implications, and comparing/contrasting concepts); and • Two peer-reviewed source citations in current APA format, the text and the integration of 1 biblical principle. Structure 30% Advanced Not Present Thread: Points: 2 Grammar and Proper spelling, grammar, and Spelling, APA APA format are used. formatting Points: 1.5 Points: 1 Points: 0 Marginal spelling, grammar, and APA format are used (1-3 errors are present). Minimal spelling, grammar, and Not Present APA format are used (4-5 errors are present). Thread: Word Count Points: 5 Points: 4 Points: 1 to 3 Points: 0 Required word count (at least 600 words) is met. Required word count (at least 600 words) is not marginally met (300–599 words). Required word count (at least 600 words) is not met (299 words or less). Not Present Replies: Points: 3 Grammar and Proper spelling, grammar, and Spelling, APA APA format are used. formatting Points: 2 Points: 1 Points: 0 Marginal spelling, grammar, and APA format are used (1-3 errors are present). Minimal spelling, grammar, and Not Present APA format are used (4-5 errors are present). Replies: Word Count Points: 5 Points: 4 Points: 1 to 3 Both replies are present and contain a sufficient word count (minimum 450 words each). Replies submitted, but 1 reply submitted with insufficient word count and/or only 1 reply has been submitted. Both replies submitted with Not Present insufficient word counts and/or only 1 reply has been submitted. Points: 0
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