Bringing Lean Healthcare to Life

Starting Blocks

Without a doubt, Lean is set to make a big impact on the Healthcare sector over the next few years and many Healthcare organisations in both the public and private sector are already exploring how they could apply it to their patient pathways and administrative processes.

Whilst many of the tools of Lean are familiar to the people in the Healthcare sector, particularly aspects of Process Analysis, the real difference that Lean will bring is a change in the way that improvements activities are implemented rather than the use of the tools themselves.

Many people in the Healthcare sector are looking to people with Lean skills gained in manufacturing to help guide them through the maze of implementing Lean, including helping the organisation to prepare for Lean as well as undertake the specific improvement activities, including Value Stream Events, Rapid Improvement Events etc. Running alongside this is the need to develop the internal capacity of organisations to lead improvements themselves, which is achieved by developing internal Lean facilitators (or Change Agents).

However, as we already know, not every problem in Healthcare can be related to a problem encountered in Manufacturing and there are some significant differences in approach required to make for a successful improvement programme for people more familiar with leading Lean improvements in Manufacturing.

In this article we review some of the key differences that we have found in pioneering Lean transformation in Healthcare and share the structure to Lean activities that we have been developing to ensure that the organisations make sustained improvements rather than isolated Lean ‘ram raids’.

Interestingly, our work to date is also providing some useful learning that can be applied in reverse – from Healthcare back into Manufacturing!

The Same, But Different

As we have already said, Lean will make a big difference to Healthcare and will help them achieve their operational and financial targets but it needs to be applied sensitively within organisations that have been ‘pummelled’ by initiatives and legislation and have a not unreasonable cynicism towards ‘this new initiative called Lean’.

Like in many manufacturing businesses first embarking on an improvement journey, Healthcare employees are concerned about Lean being a vehicle to cut jobs. This feeling has not been helped by the recent NHS guide issued about Lean Healthcare which has chosen to use a Chainsaw as their main logo and was referred to by a Service Improvement Lead within an SHA (Strategic Health Authority) as the ‘Slash & Burn’ guide to Healthcare.

Issues such as this, along with the use of manufacturing focused terminology, photos and case studies when working with employees in Healthcare, has the effect of building up internal resistance and leads to comments such as “My patients are not cars” made by a Renal Consultant we encountered recently.

Additional differences can be seen in the attitude towards risk in Healthcare. In Manufacturing, if you make a mistake with Lean you may increase the risk of accidents but it is more likely it will just reduce productivity or profits. In Healthcare, similar mistakes can impact on Patient Safety (including increasing Morbidity or even Mortality) and can attract significant media attention.

Making this scenario even more complex is the fact that the ‘care pathways’ that patients experience often interact and overlap in a way that Manufacturing value streams do not, with patients switching between pathways and specialities dependent on their specific needs and treatment plans.

Management of these processes and pathways is complicated by the need to balance clinical concerns (such as patient safety and medical best practice) with ‘business’ concerns (availability of resources and finance), and the often uneasy balance that has to be struck between senior clinicians and organisational managers on these issues.

Whilst this sort of complexity is not alien to manufacturing, where there is a constant need to balance cashflow against sales (for example), the fact that this balancing and the resulting management of risk in Healthcare is so prevalent leads to a very different style of management – being more consultative and inclusive than Manufacturing, which slows decision making and involves a lot more analysis than many Manufacturing decisions, and the need to prove things first to sceptical clinicians.

This constant need for balance between clinical and operational concerns leads to one of the biggest differences we encounter, namely the difficulty in engaging the right people for the right amount time to make the improvements sustainable. This is not a new problem in Healthcare with many improvement initiatives having fallen foul of changing priorities, the allocation of insufficient people to an improvement process or simply having failed to move from discussion into action quickly enough.

One final difference between Manufacturing and Healthcare that we thought useful to highlight is simply the differences between what ‘customers’ think of as Value Adding in the two sectors. Giving comfort and advice to a patient is highly valued (for example, a nurse accompanying a patient being taken to theatre) but does not translate easily into a manufacturing equivalent activity.

A Holistic Approach
To counter these issues, introducing Lean into Healthcare requires a holistic approach that takes into account the following points:

1. Understanding Customer Value

Whilst the patient is the obvious (and most important) customer in a process, they may not be the only customer in a Healthcare environment; with others including (say) a Primary Care Trust that has commissioned a Hospital to undertake some activity on a patient and which will be invoiced for the activity.

However, in exploring what customer think of as value adding we do find some customers (patients) in Healthcare have become conditioned by their experiences to date. In one example we were speaking to a patient who attended clinics weekly as part of their treatment plan and was required to wait at every appointment for up to two hours. When we discussed what they valued and whether a reduced waiting time would be beneficial, they said they had come to expect the wait and would place more value on access to free coffee and better magazines to read!

2. Scoping Effectively

Identifying a compelling need for the improvement process is absolutely essential. The need to improve productivity or finances are often driving improvement initiatives in Healthcare but a compelling need based on saving money will rarely engage people from across the pathway.

Often a successful compelling need will focus on improving patient outcomes and achieving the statutory targets within public Healthcare (such as achieving an 18 Week maximum lead-time from referral by a GP to the start of treatment) as well as the need to achieve best practice rates for activity. Because of the importance of this step in the process, we have shown what we believe are the key elements required to successfully scope an improvement project in the text box opposite. It is worth stating that to be truly successful, the scoping of Lean improvements relies on having representation from across the pathway – even if, as is so often the case, that means including people who have never considered themselves as co-workers before, such as the GP and the Hospital Porter we had sitting next to each other at a recent Scoping session.

3. Effective Sponsorship

Leading a Lean project that spans such broad patient pathways requires a high degree of influencing skills. Even seeking to improve a simple administrative process like a Patient Discharge for example, could require the Project Sponsor to liaise, cajole and drive change across several stakeholder groups including GPs, consultants (the real custodians of the NHS), ward staff, medical secretaries, pharmacy staff, IT, social services and porters!

The Sponsor’s belief in Lean will be tested daily by such a large group of interested parties and so their capacity to maintain enthusiasm and motivate the Change Agents is vital. The secret weapon at their disposal, once the Scoping session has been completed is that an agreed Compelling Need will create “clarity of purpose”. Ultimately, if they engage enough people with the same message enough times, the followers will start to assemble.

4. Building Awareness & Capacity

Given the concerns of many in Healthcare that Lean is going to be used to shed jobs, it is essential that there is thought given to the communication of the ‘Compelling Need’ – what Lean is, what it is not and what will happen. Running alongside the raising of awareness will be the need to focus on developing the capacity of individuals within the organisation to enable them to lead Lean improvements.

In addition to initial awareness activities, there is also a need to build on-going communication activities to report on progress, involve others in the design of new processes and ensure that the organisation embeds the improvements achieved before (or alongside) moving onto the next challenge.

Our experience of this shows that at the start of the process a lot of people think of Lean as being just about ‘Process Mapping’ and there is a certain cynicism about it in many areas. This is quickly overcome but can be quite demoralising when first encountered and this confusion about Lean underpins the need to develop broad awareness within the organisation of what Lean truly can deliver.

In terms of capacity, many Healthcare bodies are keen to build internal capability to develop themselves as Lean organisations. Performance Improvement Teams are popping up all over the place and we have found that a large part of our work has been focused on helping these teams of change agents develop the facilitation skills and leadership attributes that will enable them to not only deliver change but make it sustainable.

5. End 2 End Understanding

We mentioned earlier that one of the ways that Lean in Healthcare is different to Lean in Manufacturing is that the pathways (value streams) interact in a different way. Another problem is often encountered through isolated events in one area having an unexpected (and often negative) impact either upstream or downstream in the pathway. Given the risk associated with making changes in different parts of Healthcare, we believe it is essential to develop an understanding of how the pathway operates from End 2 End and to review its critical constraints, current operating performance and the impact that likely changes might have elsewhere before seeking to create a suitable ‘Future State’ and implementation plan.

6. Embedding the Change

Much like Manufacturing, a large percentage of Lean projects in Healthcare are going to fail to deliver the results that organisations hoped for and many of these problems are related to the challenge of embedding the changes. So, having gathered support for an improvement programme and achieved the changes (through Focused Improvement Teams, Rapid Improvement Events etc), it is critical to also conduct the activities that will assist the embedding of the changes including:

 Publicity and communication of how the new systems/processes work
 Celebration of the improvements achieved
 Reviews of achievements (Progress Gates) which look back at what has already been done
 Auditing to ensure the changes don’t slip back to ‘the old way’
 Further events and activities (as one success often breeds further successes)
 On-going Change Agent Development
 On-going, visible Sponsorship.

No Magic Bullet
When we opened this short article, we mentioned that Lean is set to have a big impact on Healthcare as it can address the needs for improved effectiveness as well as reduced lead-times and costs, but that its application is different to the way that improvement activities are led in Manufacturing and has different risks and threats to success than in other sectors.

We do not claim to have a monopoly on good ideas about how to address these points and have written this article from the basis of real experience of delivering improvements to a variety of Healthcare organisations. We would welcome feedback on your experiences.

As a closing thought to Lean practitioners everywhere who are looking to be (or are already) involved in Healthcare – whatever the operational benefits that are possible, no-one wants to achieve these at the expense of patient safety – as it is only by addressing both operational and clinical needs that Lean Healthcare will truly come to life.

Mark Eaton MSC MBA CEng MIET FIOM
Mark is a Fellow of the IOM and Chairs the Operations Development Panel. He is a frequent speaker on the topic of making improvement sustainable and has worked with the Armed Forces, NHS, Local Authorities and Manufacturers for over 10 years on improvement programmes.

Simon Phillips MA FRSA
Simon is a Fellow of the Royal Society of Arts and Manufacturing and has spent many years helping industry leaders and their organisations to embrace new ways of working. He was recently awarded a National Training Award and has worked across all sectors in the UK, Europe, South Africa and the US

Towards A Successful Society – Healthcare And Capitalist Evangelism

The success of any society is ultimately determined by how well its population lives and dies. Within this paradigm of “successful population” are two fundamental elements – individual and collective wellness. A successful society therefore embodies the notion that both individuals and the overall population are well, and these two measures are reasonable assessments of the wellness, and hence the success of any given society.

In other words, the success of a society can be assessed, characterized, and understood through these two main measures. To break it down, individual wellness consists of answering the question: does the society reasonably allow and encourage individuals to be well? Secondly, does the society allow and encourage wellness for the entire population from birth to death? To the latter question, the most important component of population wellness and hence, societal success, is the degree to which the sum of individual wellness creates collective wellness. The single-most important component of population wellness is a high level of population health, measured by the numbers of individuals who are well or have reasonable access to being well.

The four scenarios below represent a summary snapshot of healthcare systems currently in existence in the Western Hemisphere. The scenarios are predicated on the reality that the cost of healthcare is (next to purchasing a home) the most expensive cost one will experience during his or her lifetime and that these costs are expected to continue to escalate over time as new technology, treatments, and pharmaceuticals continue to drive costs. These four main approaches to healthcare are:

1. No healthcare programs (other than free market)

2. Universally funded programs

3. Insurance company funded programs

4. Combinations of the above

These four healthcare approaches are summarized below with respect to how well they represent the ability to create a successful society. Remember, a successful society is one that encourages, promotes, and allows for both individual and collective wellness, as measured by population health.

1. No Healthcare Programs: Countries which have no healthcare programs generally have lower than average population health. While some members of the population in these societies (namely the very rich) who are able to afford healthcare may be healthy indeed, the overall population health is often quite low. It is important to note that socioeconomic status is generally a good predictor of population health. In countries where no healthcare programs exist, and the reason for these lack of programs is lack of finances, then population health is usually comparatively low. Using our definitions of societal success, the success of these societies would be low, or unsuccessful.

2. Government Sponsored Programs: Countries with government sponsored and funded universal healthcare programs generally have a collectively higher level of healthcare than other countries. Again, if the one applies the definition of success of the entire population as the sum total of the wellness of all individuals within that system, then countries which offer healthcare programs that collectively confer benefits on the highest number of individuals are, by definition, successful. Since one cannot be more than well, there is no incentive for individuals to access more services than are required in order to be well. Leaving aside preventative programs and social marketing costs as key aspects of overall population health, health and wellness can be accessed within government sponsored programs up to a certain level depending on the aggregate overall need of the population. Therefore, by definition, and in spite of incentives and disincentives within the system, the societies that employ these systems are successful.

3. Insurance Company: Healthcare programs sponsored by insurance corporations can work well, provided that the insurance coverage provides all members of society with at least basic coverage and coverage through catastrophic illness. Nobody plans on getting leukemia, or ALS, or meningitis, or lupus, for instance. If you are well-educated and have a position with health benefits with a corporation or you have been successful in your career or business, then it is likely you will be able to afford the costs of healthcare. However, since healthcare and profit-motive are mixed within the same crucible, there is a strong incentive to cheat or to create environments where profit supersedes care if the two vie for supremacy – much as suggested in Michael Moore’s movie, Sicko. The active removal or denial of healthcare is a logical and inevitable outcome of a for-profit, insurance corporation controlled system of care delivery – particularly where the population is aging. Also, there is no compelling motive for insurance corporations to cover individuals susceptible to high healthcare costs (i.e., those with catastrophic physical illness; mental illness; the frail elderly; new mothers and infants), period. The outcome of such a system would be to spiral into category 1 – No healthcare programs – (mediated by a very few insurance companies) wherein the richest segments of society would be able to access services. The irony is, the richest citizenry often require much less healthcare than others. The upshot is this: there is an increasing disparity in the number of people who are able to access healthcare in the face of age and cost escalations. One needs to question the current and future success of these social systems.

4. Combinations of Above: Combinations of the above become extremely complex and difficult to assess. There are certainly advantages and disadvantages, as well as incentives and disincentives for a hybrid of the above systems. Each of these advantages and incentives (or lack of) are inextricably connected to the socioeconomic class you and your family belong to or are transitioning into as well as a host of external and internal factors. A government funded universal system provides healthcare to everyone, including those who are disadvantaged and could not possibly access care without subsidization. It also provides care to those who are charged by some who would abuse care (though unclear who this group might be as people do not consume unlimited healthcare once they are well). Alternatively, the system dominated by large insurance companies provides very high quality, responsive care to individuals who can pay or who are insured by corporations who in turn can pay. This system works well where individuals insured are reasonably healthy and young. A problem occurs when the population of employees becomes older and insurance premiums are either hiked to cover extraordinarily high costs (insurers will only cover healthcare costs where the profits of covering healthcare costs actuarially calculated costs) or removed entirely. Countries in which no healthcare programs exist (presuming healthcare is available) results in costly but accessible services for the very few. There is no need to get into the obvious personal suffering and strife in this latter healthcare system.

To summarize the four systems discussed:

1. The richest members of society will continue to receive care regardless of the system in place.

2. The poor will suffer the most in instances where there is either no system in place or where insurance corporations are the primary arbiters of healthcare delivery.

3. The government funded universal system provides care to the greatest number of individuals in society, despite any shortcomings.

4. Profit motive and linkages to incentive to constrain services and limit accessibility becomes increasingly prevalent as the workforce ages (and healthcare benefits supplied by employers become accessed more frequently).

5. Societal Success = providing the opportunity for wellness for the greatest number of people that make up the society.

In conclusion, the success of a society is correlated with the individual and collective wellness of that society. Wellness of the society is inextricably linked to the overall health of the population within that society.

Societies that provide healthcare to the highest number of individuals to an established floor (as opposed to ceiling) level of care (inclusive of the most downtrodden and indigent) are successful. A ceiling level of care is redundant when referring to healthcare, since, with the exception of only an extremely rare and unusual incidence, people only access healthcare up to the amount which will result in wellness. For instance, unlike other goods or services (e.g., Ferraris, Rolex watches, massages, Gucci handbags), obtaining healthcare in excess amounts is both redundant and ridiculous and counterintuitive to human nature.

It is therefore reasonable to suggest that a system of care which provides for the greatest number in society (e.g., everyone), the most vulnerable in society; as well as those at the highest rungs of the socioeconomic ladder and everyone in between could reasonably be argued as the most effective. To those who would charge or decry a system that would benefit everyone as inefficient or unaccountable and therefore untenable, it is important to ask where they, themselves, fit into the healthcare-socioeconomic landscape. Secondly, are they interested in the societal success, will their approach move the society toward success, or are their own parochial interests – however they are justified – masquerading as societal success. You be the judge.

In essence, evangelizing capitalism to the exclusion or minimization of societal success as measured by population health is tantamount to “cutting off your nose to spite your face”.

Issue #1 – How Would Obama and McCain’s Healthcare Proposals Impact Medical Travel?

American Healthcare & Medical Travel

Today, more than 48 million Americans are uninsured, while millions more learn they are underinsured when they become sick. America spends more than $2.3 trillion, or 16% of GDP, annually on healthcare costs. By the year 2016, U.S. Department of Health and Human Services forecasts that health spending will be $4.3 trillion or 20% of GDP.

Though America spends more than any other country on healthcare, it is ranked 37th in overall quality among the world’s healthcare systems by the World Health Organization. According to the Organization for Economic Cooperation and Development, healthcare spending accounted for 10.9% of the GDP in Switzerland, 9.7% in Canada and 9.5% in France, all countries ranked higher than the U.S.

A recent Wall Street Journal-NBC Survey reported that the cost of healthcare is Americans’ number one economic concern. Growing numbers of underserved patients are turning to healthcare delivery alternatives such as traveling to foreign hospitals for necessary treatment. While the medical travel phenomenon started with cosmetic surgery, successes have emboldened patients who need joint replacements, cardiac surgery, spinal fusions and bariatric surgery to reach beyond America’s borders for alternatives. At the same time, health insurers and employers are noticing the opportunities for cost savings by outsourcing and the ability to reach new markets with tailored healthcare products.

Republicans and Democrats agree that current trends in healthcare are not sustainable. Not surprisingly, both presidential candidates, Senators Barack Obama and John McCain, have proposed equally radical remedies for America’s broken healthcare system. Though neither candidate addresses medical travel specifically, their healthcare plans suggest the likely impact on the medical travel market.

McCain’s Healthcare Plan

Sen. McCain would ask Americans to take on greater personal responsibility for their healthcare choices and rely on market forces to meet today’s healthcare challenges. According to Sen. McCain, increased competition and less government involvement will improve the quality of health insurance with greater diversity among plans, lower prices and portability.

Specifically, Sen. McCain would seek to make insurance more available by increasing variety and affordability of private plans. The Senator’s revolutionary idea is to eliminate the tax break that workers receive from employer-sponsored health plans, treating the benefit as taxable income, offset by a new tax credit of $2,500 for individuals and $5,000 for families. If the tax credit is more than the amount a person spends on healthcare premiums, the excess can be placed in a health savings account.

Sen. McCain believes that people who are covered by employer health benefits consume more healthcare services than is necessary. Presumably at least some of those excess services that can be redirected to the uninsured population. Putting patients in control their health spending will encourage competition among providers and insurers, reduce costs and improve the quality and portability of coverage.

Sen. McCain has proposed several policy initiatives to lower healthcare costs. These include: (1) greater competition in the pharmaceutical market; (2) improved systems for chronic disease prevention and management; (3) coordinated care among providers to render better outcomes at lower cost; (4) improved access through walk-in clinics in retail outlets; (5) use of information technology; (6) reforming the Medicaid and Medicare payment systems to pay for diagnosis and prevention but not treatment made necessary by preventable medical errors or mismanagement; (7) anti-smoking programs; (8) state spending flexibility; (9) tort reform to reduce frivolous lawsuits; and (10) improved transparency with better public information on treatment options, doctor records, outcomes, quality of care, costs and prices.

The Impact of Sen. McCain’s Plan on Medical Travel

The impact of Sen. McCain’s healthcare plan is to de-emphasize the employer-based health insurance system that currently covers 158 million Americans. Sen. McCain’s plan will likely encourage Americans to avoid taxation of health benefits and use their new tax credit to purchase health insurance on the open market. Young healthy people would likely be the first to switch from their employer plans and find cheaper alternatives in the open market.

Conversely, sicker older workers may initially choose to stay with the security of their employer-based plans. As the risk pool of employer-based plans becomes older, sicker and more expensive to insure, more employers will stop providing health benefits. Eventually, all workers will likely move to individual health plans.

Due to its focus on competition and free market solutions, Sen. McCain’s plan may encourage the medical travel market. Thus far, medical travel has been a completely consumer-driven phenomenon. By placing patients in control of their healthcare spending, and eliminating the tax incentive for workers to rely on their employers for coverage, patients will be encouraged to pursue treatment alternatives that maximize their healthcare dollars.

Let’s use the average American family as an example. The average employer-sponsored family health plan currently costs about $12,000 in annual premiums. On average, employers contribute $9,000 and workers contribute $3,000 to pay the premiums. Under McCain’s plan, workers will be taxed on the employer’s $9,000 contribution as income (as if the employer paid the $9,000 to the employee as wages), thereby eliminating the tax incentive for an employer-sponsored plan. Instead, the family gets a $5,000 annual tax credit.

A typical high-deductible, low-premium family plan on the open market costs about $10,000 annually ($2,000 less than the average employer-sponsored plan). Workers may use the $9,000 that their employer would have used to purchase coverage, (about $6,000 after taxes) and the $5,000 tax credit ($11,000 total) to pay for health coverage. Money left over after buying health insurance can be put in a Health Savings Account.

Insurers are finding that high-deductible, low-premium plans incorporating foreign providers can be offered to previously uninsured markets. These cheaper plans attract cost-conscious patients or patients with cultural ties to featured providers in Latin America and Asia.

Informed healthcare consumers will demand choice, transparency, high quality and reasonable prices from their providers and insurers. Consumers who receive more complete information and better prices from foreign providers may be persuaded to go abroad for treatment. McCain’s plan encourages consumer-driven market responses.

Obama’s Healthcare Plan

The central tenant of Sen. Obama’s healthcare plan is that everyone should have quality, affordable and portable coverage. His plan reflects the philosophy that government should guarantee affordable healthcare to all Americans. While Sen. Obama would mandate that every child be covered, he would seek to cover adults through a combination of employer and government programs.

Sen. Obama’s healthcare plan encompasses two revolutionary initiatives. First, Sen. Obama would require all employers to “pay or play.” All employers, except small businesses, must either provide quality health plans to employees or contribute (a new tax) to the cost of a public plan available to all Americans. The public plan would be similar to Medicare and provide coverage similar to that given to federal employees.

Sen. Obama’s second revolutionary idea is to create a National Health Insurance Exchange (“NHIE”) where insurers would sell coverage to small businesses and individuals. To participate, insurers would have to disclose costs and benefits of various plans and the percentage of premiums that go to patient care as opposed to administrative costs. The goal is to create a transparent market for health insurance that will improve quality, efficiency and value.

Notably, small businesses are exempt from Sen. Obama’s “pay or play” plan. Instead, small businesses receive a refundable tax credit of up to 50% on paid employee benefit premiums. The Small Business Health Tax Credit is meant to incentivize small businesses to offer quality health plans without hampering their ability to compete in the global marketplace.

Sen. Obama also proposes that hospitals and providers be required to publicly report data on preventable medical errors, nurse staffing ratios, hospital acquired infections and disparities in care. Transparency is required of both insurers and providers and is meant to help patients make better choices. Finally, Sen. Obama’s healthcare plan would allow Americans to purchase medicine from other developed countries offering safe products at lower prices.

The Impact of Sen. Obama’s Plan on Medical Travel

The immediate impact of Sen. Obama’s plan would be to bring millions of uninsured Americans into government sponsored managed care. Sen. Obama’s plan may also encourage employers to avoid the financial risks of raising healthcare costs and opt to pay into the public plan instead. Workers may get better benefits under the government’s plan than their employers can afford. If healthcare costs continue to climb unchecked, under Sen. Obama’s plan, employer plans may disappear.

Under Sen. Obama’s plan health insurers will need to look for ways to reduce the cost of covering previously the previously uninsured. Medical travel offers quality treatment at a fraction of the cost of similar care in the U.S without sacrificing quality. Some may argue that sending a patient abroad for care is itself a reduction in quality. However, foreign providers can demonstrate international accreditation and credentials that rebut such criticism.

Sen. Obama’s 50% tax credit for small businesses may encourage medical travel. Often small businesses operate in local, often demographically homogenous, communities. People with cultural ties to provider destinations may be more likely to travel for care. Small business and insurers can team up to offer customized plans that enhance care while reducing the cost.

In his calls for transparency, Sen. Obama’s plan echoes the philosophy of medical travel. Patients who travel for care demand information about surgeon success rates, infection rates, and nurse to patient ratios. The information empowers patients to make informed decisions. American providers often resist collecting this information to avoid it being used against them in a malpractice lawsuit. Sen. Obama’s transparency initiative encourages consumer-driven demands for more and better information.

Notably, Sen. Obama calls for all health plans to resemble the coverage offered to federal employees. The directive may limit the flexibility insurers need to introduce innovative cost cutting solutions like medical travel. If the government decided that traveling abroad for treatment reduced quality, insurers would have to eliminate medical travel from plans. Further, Sen. Obama has spoken out repeatedly against outsourcing. Medical Travel is the newest form of outsourcing. Given the reluctance of American doctors to embrace this trend in healthcare, it is unlikely that Sen. Obama would openly support medical travel.

Medical Travel and the Future

Side by side, Sen. McCain’s healthcare plan seems to be better for the medical travel industry than Sen. Obama’s. Sen. McCain’s focus on patient control of their healthcare spending and encouraging competition among providers and insurers is in line with the consumer-driven phenomenon of medical travel. Sen. Obama’s focus on universal coverage on par with that of federal employees suggests that it will be up to a government agency to determine whether medical travel meets baseline quality standards. With Sen. Obama’s plan, the future could hinge upon the outcome of that debate.

Career Opportunities in Healthcare Management Through Online Healthcare Training

A healthcare administration career via online healthcare management training requires no medical background. This is the field relating to the leadership, management and administration of healthcare systems, hospitals and hospital networks. Healthcare administration covers a broad area of activities and there is usually a set of factors that determine the types of jobs that need to be done to run any given facility; these often include the size and scope of the facility in question and the kinds of medical/ healthcare facilities they have.

Healthcare administrators are vital to the successful operation of any healthcare system. The day to day running and financial sides to healthcare require dedicated professionals to work on areas from clerical to administrative to financial. Healthcare professionals, also known as healthcare managers or health services managers are regular business managers who plan, direct, coordinate and supervise the delivery of health services. These managers can be specialists in charge of a specific department or managing entire facilities. Healthcare education has recently found a new home on the internet, with thousands of people pursuing online healthcare education and online training in order to improve their professional skills and profiles or to take the opportunity to switch to this lucrative and satisfying career from another field.

The following is a brief description of some of the major areas in healthcare administration for which extensive online health care administration and management education and training is now available.

General Administration

Healthcare organizations, like all other types of businesses, are often profit based businesses requiring the highest quality of managerial oversight. A healthcare unit requires a whole top and middle management team in order to function. Matters related to budgeting, profit and future expansion is also, likewise, a managerial responsibility (especially in larger facilities like hospitals).

Healthcare managers in administration positions normally answer to the board of directors. The workload is higher than for many other areas, with administrators often required to work between 55-60 hours a week, however, compensation and career benefits are attractive and the work itself is stable to a great extent. Growth opportunities are numerous and salaries are also amongst the higher levels, with healthcare administration staff making $40,000-50,000 for a start and improving to $120,000-130,000 within 10 or 11 years.

Human Resource (HRM)

HR professionals specializing in healthcare are responsible to maintain a working, motivated staff for all departments. They are often responsible for the hiring of medical staff (doctors, nurses etc) and generally fulfilling HR duties as in any other organization. These professionals average a salary of around $35,000 to $100,000 per year.

Medical information technology (MIT)

With great advancements in information sharing and technology, healthcare has changed drastically over the last few years. With the continued application of new technology in healthcare, a team of professionals is required to operate and maintain information systems (and networks), diagnostic machines, computer systems and software. They are also responsible for upgrading and problem solving. Professionals in this area earn anywhere in the range of $40,000-$100,000; the job description itself varying with the type of facility.

Public relations (marketing)

PR managers in healthcare are responsible for improving the healthcare facilities’ image in the public eye and to keep the surrounding public informed about the facilities and services offered at the healthcare unit. PR managers are also responsible for providing coordination services and information in the event of an emergency or disaster. PR managers are also the spokespersons for their respective facilities, representatives for the unit, and speak for the organization (for instance in the event of a lawsuit etc). They fall into the same pay grade as MIT or HRM professionals.

Finance

Finance professionals hold a critical importance today for healthcare at a par with doctors and nurses. The cost of healthcare is rising all the time, it is important to keep not only the facility profitable, but also to make healthcare as affordable as possible. These professionals are responsible for detailed financial aspects like budgeting, accounting, auditing and income & expenditure; also finding ways for administrators to cut costs and improve finding. Finance managers in smaller facilities average the same pay-scale as those for HRM and MIT; however those for larger facilities and with more experience can make considerably more than that ($80,000-$200,000 a year).

References:
Bureau or labor statistics – Handbook for occupational outlook – US dept. of Labor.

Resource Area:

DISCLAIMER: Above is a GENERAL OVERVIEW and may or may not reflect specific practices, courses and/or services associated with ANY ONE particular school(s) that is or is not advertised on SchoolsGalore.com.

Copyright 2009 – All rights reserved by Media Positive Communications, Inc.

Notice: Publishers are free to use this article on an ezine or website, provided the article is reprinted in its entirety, including copyright and disclaimer, and ALL links remain intact and active.

Healthcare Revenue Cycle Outsourcing – A Problematic Paradox

Historically, the drivers of change in healthcare have been focused on clinical advancements. Applying innovative strategies in healthcare finance and revenue cycle management have lagged significantly behind clinical progressiveness.

Unlike corporate America’s general financial sectors like credit card processing and accounts receivable collections, healthcare finance and business office operations have been slower to adopt the cost-effective improvements offered by the outsourcing of billing and collection accounts.

Recently, due to economic factors and the shifting of patient financial responsibility, healthcare executives have become more accepting of revenue cycle outsourcing initiatives. In spite of a looming paradox, which pits opposing goals against each other, maintaining fiscal health versus the political pressure of keeping jobs in the local community offers a continual balancing act for healthcare executives.

Gartner Research Inc. estimates healthcare executives spend about twenty percent of their budget on all categories of external sourcing options, compared to the general mainstream industries, which typically invest about a third of their budget on external sourcing.

Gartner also estimates that seventy percent of healthcare organizations who do choose to outsource meet or exceed their cost-savings expectations, and most see an improvement in services as they shift their non-core functions to outside experts.

Healthcare outsourcing in general has begun to see a significant rise in acceptance. During the next five to ten years, it is estimated healthcare will see an increase in the outsourcing of many financial, clinical and business processes.

The American Recovery and Reinvestment Act of 2009 (economic stimulus package for the U.S. economy), healthcare reform, and the Health Information Technology for Economic and Clinical Health Act (HITECH), will create significant opportunities for all outsourcing companies to aid healthcare organizations in meeting the requirements for the new set of regulations and requirements mandated by legislative action.

These industry changes will increase outsourcing demand because healthcare providers cannot efficiently implement these changes on their own and certainly not at the speed they want.

Historically, physicians, hospitals and insurance payers with larger footprints and decentralized organizations were the first to initiate outsourcing partnerships. Smaller organizations typically relied on internal resources or in limited cases, local outsourcers.

This trend is changing. All sized healthcare organizations are jumping on the outsourcing bandwagon and are moving toward leveraging IT, clinical and revenue cycle business processing outsourcing to improve the financial viability of their operations.

The motivators for the shift in strategy for smaller healthcare operations are due in part by the margin pressure they are under and the need to cut costs. The key ancillary benefits to an outsourcing strategy are operational efficiencies, cost reductions and delivering superior patient satisfaction.

Healthcare executives have numerous sourcing strategies from which to choose. Utilizing a US based local, regional or national outsourcing company has been the typical choice for healthcare executives who outsource.

With today’s technology, especially in the services’ sector, it is less important to contract with a local provider than to choose the best-in-class provider regardless where their business operation is located.

In the US, outsourcing, in general, has become a polarizing political issue driven by poor economic times and localized job losses. Even with local and national pressure to curtail outsourcing activities by consumer advocates, the return on investment (ROI) from cost reductions and improvements in quality have influenced healthcare executives to pursue offshore and onshore outsourcers as an alternative to maintaining an internal workforce.

Over the past ten years, the providers who have chosen their outsourcing partner wisely, and partnered with qualified process oriented firms, have experienced reduced operating costs and ultimately, higher patient satisfaction encounters.

Americans value the financial opportunities offered by our free-market economy. In every region of the country, community leaders attempt to support and protect local labor forces, which serve nearby businesses. The goal of this action is to keep jobs in the community and surrounding area.

Unfortunately, with budget cuts and margin pressure becoming greater than it’s ever been, healthcare executives cannot meet the demands of managing various clinical and revenue cycle functions, which typically demand a lower cost, more qualified and educated workforce.

The healthcare executives who have avoided non-localized outsourcing have succumbed to the local pressure of keeping jobs within their community regardless of the impact on the financial performance of the health system.

An interesting paradox exists as those same executives and community influencers do not think twice about purchasing clothes, food products, electronics, cars, toys, furniture, and household goods produced globally.

Regardless of the task, business segment or location of the potential outsourcing firm chosen to provide services, the ultimate goal of pursuing any outsourcing strategy is to support the goals of the healthcare organization, which are ultimately to serve the community with the highest level of patient care. That cannot be accomplished if the organization is under financial duress.

Many top healthcare thought leaders are now accepting outsourcing as a cost reduction and operational improvement strategy designed to combat legislative reform and the economic squeeze the healthcare industry is experiencing.

In general, outsourcing saves time, effort, demands on infrastructure, manpower, and money. By leveraging the best of breed solution providers, healthcare organizations gain a competitive edge guaranteeing endless benefits for the enterprise and the patients they serve.

Learn why a paradox exists as healthcare revenue cycle executives evaluate the practice of financial, revenue cycle and clinical outsourcing.

Author: Phil C Solomon is a revenue cycle evangelist, author and speaker who is passionate about delivering proven operational strategies, leading practice solutions, introducing performance based processes, and implementing top tier technologies which optimize operational performance.