Dynamic Capacity Management for Healthcare Advanced Methods and Tools for Optimization Dynamic Capacity Management for Healthcare Advanced Methods and Tools for Optimization Pierce Story MPHM, DSHS Productivity Press Taylor & Francis Group 270 Madison Avenue New York, NY 10016 © 2011 by Taylor and Francis Group, LLC Productivity Press is an imprint of Taylor & Francis Group, an Informa business No claim to original U.S. Government works Printed in the United States of America on acid-free paper 10 9 8 7 6 5 4 3 2 1 International Standard Book Number-13: 978-1-4398-1976-0 (Ebook-PDF) This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. 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Visit the Taylor & Francis Web site at http://www.taylorandfrancis.com and the Productivity Press Web site at http://www.productivitypress.com Contents Acknowledgments ..........................................................................................ix Prologue: Kenji’s Story ...................................................................................xi Preface: Blasphemy! ....................................................................................xvii 1 Introduction ...........................................................................................1 A Child of Our Own ...................................................................................2 Dynamic Capacity Analysis, Matching, and Management (DCAMM): Concept Overview ..................................................................3 A Caveat to the Text ....................................................................................6 Note .............................................................................................................6 2 Variability: Killer of Capacity ................................................................7 The Look and Feel of Variance .....................................................................9 The Deception of the Average ....................................................................12 System Demand, Patterns, and Variability .................................................23 Patterns in Demand Variability .................................................................24 The Importance of Ranges .........................................................................27 Probability of Outcomes ............................................................................28 Variability, Ranges and Patterns, and Predictive Analytics.........................28 Outliers and Break Points ..........................................................................29 Patterns, Demand, and HODDOW WOMSOY .......................................30 Attribute Variation .....................................................................................33 Variability and Evolution ...........................................................................33 Summary: Variability and Demand ..........................................................34 Notes .........................................................................................................35 3 Interdependencies .................................................................................37 Interdependencies ......................................................................................37 Interdependencies in the Current PI Methodologies .................................40 The Missing Elements ...............................................................................40 The Biggest Missing Element: Variability ...................................................43 v vi  ◾  Contents Interdependencies and Variability: The Origins of Dynamism ...................43 Dynamism and Systems Analysis ..............................................................46 Dynamism and Evolution ..........................................................................47 Why Not a “Live” Test, PDCA, or Kaizen Event? .....................................48 Dynamism in Systems Thinking: An IOM/NAE Perspective ....................49 Tools for Interdependency Analysis ............................................................51 Summary ...................................................................................................54 Notes .........................................................................................................54 4 DCAMM Introduction .........................................................................55 Capellini: The Better Spaghetti ..................................................................55 Capellini and Hospital-Wide Flow .............................................................57 Dynamic Capacity Analysis, Matching, and Management (DCAMM): Introduction and Refresher ...................................................58 Capacity Entitlements and Acceptance Patterns ........................................60 Optimized versus Excess Capacity .............................................................60 Summary: Why DCAMM Is Necessary ....................................................61 Note ...........................................................................................................62 5 Predictive Analytics..............................................................................63 “Managing To” ..........................................................................................65 Simulation Models: The Tools of DCAMM and DPA ...............................65 A Word about Modeling Assumptions .......................................................69 Resources ...................................................................................................69 So What? ...................................................................................................70 What-Ifs and Model Outputs ....................................................................71 Effective Model Use and Learning from DPA ............................................75 Time Frames ..............................................................................................75 Simulation and the Creation of Creativity .................................................76 Strategic Analysis Using DCAMM ............................................................78 Model Scale ......................................................................................81 The Community Demand ................................................................81 A Word on Real-Time Data and Patient Tracking Systems ........................85 Summary ...................................................................................................88 Notes .........................................................................................................88 6 Demand Components: The Emergency Department ............................91 Communal Demand Recipients: ED as a Source of Downstream Demand ...........................................................................91 Diving into the Patterns .............................................................................92 Arrivals and the Debates on Predictability .................................................94 The ED and DCAMM: Using Patterns to Manage the System ..................96 Other Demand Patterns .............................................................................99 Contents  ◾  vii Case Studies and Sample Outputs: Possible Solutions for ED Flow Issues ........................................................................................100 Eyeball Disposition .........................................................................100 Impact on DCAMM Analytics .............................................101 Physician on the Front End .............................................................102 Result Waiting Area ........................................................................104 Use of Cardiac Markers ..................................................................104 Summary .................................................................................................105 Notes .......................................................................................................105 7 Surgical Services and DCAMM Analytics .........................................107 Surgical Services and Downstream Demand Analysis .............................107 OR TATs and First-Case Starts ......................................................109 Chasing the Rabbit in the OR .................................................................110 Surgical Smoothing and Systems Thinking ..............................................111 Case Length Variation and Analysis ........................................................115 Schedule Analytics, the DCAMM Way ...................................................116 Case-Fit Scoring ......................................................................................120 So What? We Get by Just Fine Doing What We Are Doing ....................122 Downstream Demand and Scheduling ....................................................122 Capacity Entitlement and Surgical Services .............................................125 Surgical Services Demand and Workload Analytics .................................126 Summary .................................................................................................127 Notes .......................................................................................................127 8 Up–Down–Up: Creating a Systems View from a Component Perspective ......................................................................129 UDU, Processes, and Design Parameters .................................................131 Design and Component Optimization ....................................................135 Facilities, Communities of Care, ACOs, and Capellinis ..........................137 Summary .................................................................................................138 9 Capacity Patterns and Analytics for DCAMM ..................................139 How Much Is Enough? ............................................................................142 Capacity as a Single Number ...................................................................144 Tips on Making Capacity Available .........................................................145 Acceptance Patterns and Capacity Entitlement ........................................146 The Highly Constrained Environment ....................................................147 Discharge by X ........................................................................................150 Outliers within Outliers ..........................................................................150 Bed Huddles, Acceptance, and Entitlement .............................................153 Bed Huddles and the Occasional Outlier (Demand) Day ........................155 Summary .................................................................................................155 Notes .......................................................................................................156 viii  ◾  Contents 10 Dynamic Resource Allocations, Dynamic Standardization, and Workload Analytics ............................................................................157 The Old Way of Creating Unit Capacity ..................................................160 The New Way ..........................................................................................160 Workload Analysis: Two Activity Boluses ................................................161 From Admit and Discharge to Census .....................................................162 Workload and Workflow ..........................................................................164 A Word on Variability ..............................................................................166 Task Allocation ........................................................................................167 Dynamic Standardization ........................................................................171 Dynamic Resource Allocation .................................................................173 Break Points and Task Allocations ...........................................................174 Summary .................................................................................................176 Notes .......................................................................................................177 11 A Word on Mandated Nurse–Patient Ratios ......................................179 Dynamic Staffing .....................................................................................181 Current Legislative Efforts .......................................................................182 Summary .................................................................................................182 12 Outlier Management and System Balance .........................................183 Outlier Management ...............................................................................183 Outlier Management ...............................................................................188 Dynamic Systems Balancing ....................................................................190 Possibilities ..............................................................................................192 Challenges ...............................................................................................193 Summary .................................................................................................195 Conclusion ..................................................................................................197 Epilogue: Kenji’s Story (Continued) ...........................................................199 Index ...........................................................................................................201 Author .........................................................................................................207 Acknowledgments Naturally, I want to first thank almighty God for giving me a passion for health- care, as well as the time and energy to write this text, at His perfect time. Regardless of how this is received by colleagues and the industry, I consider myself blessed to have done what I can for an industry I care deeply about. Of course, I would be remiss to avoid crediting those whose thankless efforts resulted in the rearing of a son who had the wherewithal to do anything good in this world, my parents. Moms are always proud, but I’ll bet her copy (free, of course) gets put on the mantel above the fireplace. (My beloved brother may have a PhD in chemical engineering and eight patents to his name, but he’s only written articles. Haha! I win!) I would also be remiss if I didn’t mention Kristin Meader Story, who tolerated many lonely weekends of closed office doors, delayed house projects, a shabby lawn, and mildew-infested roses for the sake of this effort. Her undying support and insistence that my effort would someday be a New York Times best-seller gave me inspiration and drive. May she always be one of my biggest supporters. I would also like to thank the many colleagues and friends who supported this effort, challenged my thinking, and assisted with the production. Special thanks go out to Dr. David Eitel, who assisted in the review and critique of these concepts and ideas. His feedback was and remains instrumental. Dr. Alexander Kolker of the University of Wisconsin Children’s Hospital also reviewed parts of this text. Andy Day, the best boss I’ve ever had and one of the brightest people I’ve ever met. Also, the Society for Health Systems (SHS), a division of the Institute for Industrial Engineers (IIE), has been instrumental in allowing me to be involved and engaged with the work about which this text is focused. Without SHS/IIE, this text would surely never have been written. Furthermore, the staff at Productivity Press (a division of Taylor & Francis), and especially Kris Mednansky, have been very supportive and cooperative in this effort. If ever I take on another such project, I can only hope that I can work with them again. (I promise the next one will be on time.) ix