Massachusetts Institute of Technology Engineering Approach to Engineering Approach to Healthcare Delivery Predictive Modeling Team Suhail Ahmad, Terry Hu, Kangse Kim, Jeongyeon Shim, Sungmin You Seminar on Healthcare System Innovation October 7, 2010
AGENDA • Systems Engineering and Management • Operations Research p • Engineering Healthcare as a Service System • Process Engineering: A Necessary Step to a Better Public Health System 1
AGENDA • Systems Engineering and Management • Operations Research p • Engineering Healthcare as a Service System • Process Engineering: A Necessary Step to a Better Public Health System 2
THE VALUE OF SYSTEMS ENGINEERING FOR HEALTHCARE Healthcare as a non-system Value proposition of systems engineering NAE and IOM Findings g • Nontraditional system • High organizational barriers • Systems engineering has been proven in other industries • Slow adoption of tools in healthcare • Potential for improvement • Inadequate attempt to use system engineering in healthcare • Information systems will be critical • Few incentives for change • Active team effort necessary for adoption of system engineering tools 3
REQUIREMENTS FOR ADOPTING SYSTEMS ENGINEERING TOOLS Definition of Requirements Architecture of the System NAE and IOM Recommendations • Insurers, employers, and payers should provide incentives to use system tools • Increase efforts to expand and integrate systems coordination • NIH Library of Medicine should provide information and access to NIH Lib f M di i h ld id i f ti d t tools, Government entities should provide support to train people to use tools • Do not wait in implementing single tools • Increase support of research for application of systems engineering in • Increase support of research for application of systems engineering in healthcare 4
SYSTEMS ENGINEERING METHODS AND TOOLS • Tradeoffs, Limits, Objectives Tradeoffs, Limits, Objectives • Quality Function Deployment, Design Structure Matrices Design • Plausibility • Failure Mode and Effects Analysis, Fault Tree Analysis • Modeling performance over time • Queuing theory, system dynamics Analysis • Mathematical programming – allocation of resources Mathematical programming allocation of resources • Process engineering, supply chain management, risk management • Compare actual outcomes to desired outcomes and adjust Compare actual outcomes to desired outcomes, and adjust accordingly Control • Statistical process controls and forecasting • Six Sigma, Toyota Production System 5
AGENDA • Systems Engineering and Management • Operations Research p • Engineering Healthcare as a Service System • Process Engineering: A Necessary Step to a Better Public Health System 6
THERE ARE THREE KEY AREAS OF OPERATIONS RESEARCH IN HEALTHCARE DELIVERY • Reduce variability in the delivery processes • Improve efficiency and effectiveness in the O Operations ti management delivery of clinical, ancillary, and administrative services through process analyses Optimize across: • Cost • Assist in the structuring and support of medical Medical decisions management & • Technology • Improve the performance of diagnosis, testing, biomedicine biomedicine and treatment strategies • Quality • Access • Facilitate decision-making on services and System design technology to be provided • Assist in planning for level of resources and and planning capacity 7
OPERATIONS MANAGEMENT CAN RESULT IN DIRECT COST SAVINGS THROUGH BETTER PLANNING • An ARIMA model on Demand forecasting patient demand by type of service and month of the year produced forecast year produced forecast Workforce planning and scheduling with errors ranging from 3.3% to 21.5% in the UK • Use of optimization models • Use of optimization models I Inpatient scheduling ti t h d li and tools in managing home health workers has resulted in $30-45M Outpatient scheduling annual savings in Sweden l i i S d 8
OPERATIONS RESEARCH METHOD CAN IMPROVE CLINICAL PRACTICE AS WELL AS BASIC RESEARCH Individual treatment choice • Direct surgical costs of • An ARIMA model on prostate cancer was reduced patient demand by type of by $5,600 per patient by $5,600 per patient service and month of the service and month of the Procedure performance through brachytherapy aided year produced forecast by nonlinear mathematical with errors ranging from programming model and 3.3% to 21.5% in the UK real time imaging real-time imaging Population level disease screening Population-level disease screening • Use of optimization models • Operations research method and tools in managing was applied to HIV control in home health workers has Individual-level disease screening New Haven and NYC New Haven and NYC, resulted in $30 45M resulted in $30-45M including choice of method annual savings in Sweden and cost implication Computational biology 9
DECISION ON INFRASTRUCTURE INVESTMENT AND SERVICE PROVISION CAN BE FACILITATED THROUGH OPERATIONS METHOD • UK’s NICE using a cost • UK s NICE using a cost- effectiveness model to Planning and strategy determine whether to make a specific technology available to its population its population Technology assessment and adoption • Mixed-integer programming was used to select optimal locations Regionalization of services &technology Regionalization of services &technology of traumatic brain injury units for of traumatic brain injury units for VAMC in Florida • Cincinnati Children’s Hospital Location of facilities M di Medical Center avoided l C t id d construction of 102 additional beds through better capacity Capacity planning and analysis planning and demand f forecasting ti 10
DEMAND FORECASTING, FOLLOWED BY WORKFORCE PLANNING ARE AREAS WHERE MORE RESEARCH HAS TAKEN PLACE Workforce planning and Demand forecasting scheduling • Enable revenue and resource • Develop capability to match staffing Objective planning resources to a fluctuating demand • Avoid shortfall quality decrease • Avoid shortfall, quality decrease, • Improve operating efficiency and • Improve operating efficiency and and cost hike quality of service • Pre-hospital care and ambulance • Levels of decision: Examples p staffing sta g o Corrective allocation: day o Co ect e a ocat o day • Inpatient service by type and month o Shift schedule: 1-2 months • Need for intermediate home nursing o Workforce plan: quarter to year • Typical practice: cyclic scheduling or self-scheduling for shifts or self scheduling for shifts • Various regression methods • Approach incorporating patient Method/ incorporating exogenous and/or demand and higher level decision Need • Multiple regression model based on institutional variables ARIMA for workload forecasting • Optimization through mathematical programming 11
AGENDA • Systems Engineering and Management • Operations Research p • Engineering Healthcare as a Service System • Process Engineering: A Necessary Step to a Better Public Health System 12
Healthcare Service System Essential components of Healthcare Services providers People Knowledge Create or Create or intensive intensive consumers consumers agents coproduce Process Products Value Efficiency Efficiency • Meeting demand with minimum cost Effectiveness Effectiveness • Producing the right service for the right patient at at the right time and right place • Producing the right service for the right patient at at the right time and right place Robust Robust • Insure reliability, quality and integrity 13
Healthcare Service System Complexity of Healthcare Services Emergence of electronic services based Emergence of electronic services based human on IT on IT centered • Economies of knowledge and expertise aspects • Real-time adaptive decision making Information Knowledge Uncertainties Technology Relationship with Manufacturing Relationship with Manufacturing p p g g • Interdependencies • Similarities Complexity • Complementarities • Software algorithm-laden, self producing vs human • Software algorithm-laden self producing vs human resource-laden, co producing Management Mass Customization Mass Customization Integrative Adaptive • Meeting the need of customer market that is partitioned into an appropriate number of segments, • Physical • Decision each with similar needs Making • Temporal • Decision • Organizational Informatics Informatics • Functional • Functional • Human Interface 14
Healthcare as an integrated system Healthcare as an Integration occurs over multiple dimensions integrated system Physical People • natural, constructed or virtual environment? • demanders • suppliers s ppliers Temporal • strategic, tactical and operational perspectives Processes Organizational g • procedural • procedural • algorithmic • resources, economics, and management Products Functional • input, process and output function • physical • virtual 15
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