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Operations Management in the Healthcare Sector Essay


Introduction

The healthcare organizations are currently striving towards providing adequate health care at the most cost-effective prices. For organizations to meet their general productivity goals, labour and other costs must be managed effectively. The operations in the health care sector can be dived into function and organizational related services. In most of the healthcare organizations, operations aren’t optimized. This results in poor services as patients have to wait before being treated. Resources such as physicians, surgical rooms and technical equipment are also not available at the required time due to poor scheduling. Missing files and information also results in postponement and cancellation of procedures and surgery. The process of treating patients may take a long time and this brings a lot of discomfort to patients and increases costs. These problems can be solved through the use of Operations Management (OM). OM can be used to improve healthcare services such as Improving supply chains, Introducing flexibility in the medical sector, managing resources effectively and managing information. The production and consumption of medical goods and services can be classified into:

  1. Activities– they include: physical examinations, patient’s visits to hospitals, Surgeries and therapies
  2. Inputs-these encompass: nurses, technicians, doctors, administrators, drugs, medical tools, hospitals, catering, clinics and other equipments
  3. Products-they include: quality of care, number of cases adjusted for severity and the length of treatment
  4. Welfare-it entails the evaluation of the overall welfare the patients
  5. Consequences– it entails the health status of the patients adjusted to social, economic and environmental factors

General Productivity Measures for the Department

The following productivity measures can be used in the department:

Output productivity: for productivity to be measured, the output of the products and services must be determined. The aggregate information on the volume, value of services and goods must be factored. This can be determined using a cost weighted output index which is constructed using unit costs and the different outputs. This method measures the percentage change in the output and uses the unit costs to weight the output changes (Antonia et al., 2011). This index can be determined using formula 1

Formula 1
Formula 1

Where Xjt represents the output volume j, in a time t and Cjt is the unit cost for the output j in a time t. In equation 1, the activities received by a patient are quantified but it does not take into account the complete treatment. This method does not measure changes in quality as the output is only expressed in terms of activities. It is, therefore, necessary to adjust the output so as to include quality of the service being offered. The quality data can be expressed in terms of survival rate. This rate is based on the in-hospital mortality and the deaths occurring within 30 days. These adjustment yields equation 2.

Formula 2
Formula 2

Where a = the survival rate. Equation 2 need adjustments as those patients who were not treated would have a zero quality-adjusted life. This index is adjusted so as to factor in the average health effect on the treatment condition for survival. This is calculated using equation 3.

Formula 3
Formula 3

Where,is the sum of life years accrued to patients who survive the treatment,is the life accrued to patients who have not to be treated(Antonia et al., 2011).

Another model that can be used to account for productivity entails measuring costs, activities, cases, consequences and welfare (Kam, 2011). Here the cost function is expressed as C(w, q) where, w is the input price vector and q is the quantity. The activities are measured using the Laspeyres quantity index given in equation 4.

Formula 4
Formula 4

Where a represents the number of activities i occurring during the period t andis the average cost in period 0 (Kam, 2011).

References

Antonia, H., Matilde, M., Agnes, N., Guldem ,O., Mary,O., Erica, S., & Lucy, S. (2011). Measuring the productivity of the Healthcare sector: Theory and Implementation. Web.

Kam, Y. (2011). . Web.

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IvyPanda. (2020, July 21). Operations Management in the Healthcare Sector. Retrieved from https://ivypanda.com/essays/operations-management-in-the-healthcare-sector/

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"Operations Management in the Healthcare Sector." IvyPanda, 21 July 2020, ivypanda.com/essays/operations-management-in-the-healthcare-sector/.

1. IvyPanda. "Operations Management in the Healthcare Sector." July 21, 2020. https://ivypanda.com/essays/operations-management-in-the-healthcare-sector/.


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IvyPanda. "Operations Management in the Healthcare Sector." July 21, 2020. https://ivypanda.com/essays/operations-management-in-the-healthcare-sector/.

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IvyPanda. 2020. "Operations Management in the Healthcare Sector." July 21, 2020. https://ivypanda.com/essays/operations-management-in-the-healthcare-sector/.

References

IvyPanda. (2020) 'Operations Management in the Healthcare Sector'. 21 July.

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