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
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the integration of 1
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