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A Better Way to Run Safety Net Hospitals

USC engineers report dramatic improvements in hospital efficiency using industrial and systems engineering techniques

January 15, 2008 — Mounting evidence suggests that industrial and systems engineering can help large, overcrowded hospitals find new ways to move patients as swiftly as a river through the health care system, which helps the medical centers reduce costs and improve service. Now a newly released report, commissioned by the California HealthCare Foundation and carried out by a team of USC Viterbi School engineers, documents that success at three California safety net hospitals serving the underinsured population.

In “Improving Efficiency: Management Engineering Comes to the Safety Net,“ (California Healthcare Foundation, Dec. 2007), USC industrial engineer and adjunct professor David Belson reported dramatic improvements in the efficiency of health care delivery to patients checking into safety net hospitals in northern and southern California.  California has approximately 100 safety net hospitals, which typically experience a high volume of patients, overcrowded conditions and long delays in patient treatment.
David Belson

“These hospitals are critical to California’s health care system, yet they usually don’t have the resources to implement changes that can help them reduce costs and improve services,” said Belson, who teaches in the USC Viterbi School’s Daniel J. Epstein Department of Industrial and Systems Engineering. “Management engineering solutions, which involve redesigning administrative operations to move patients more expeditiously through the health care delivery process, have been shown to be relatively inexpensive and easy to implement. Better yet, they yield dramatic improvements in a short time.”

Management engineering offers systematic methods for diagnosing and correcting problems in the delivery of care, Belson said.  The approach can be a “change agent” to quantify specific problems in all steps of health care delivery and streamline processes that impact staff productivity, operational costs and wait times for patients.

“Patient flow is, perhaps, the most telltale indicator of how well a hospital is functioning,” said Randolph Hall, an industrial and systems engineer in the Viterbi School and USC vice provost for research advancement.  “When the system works well, patients flow like a river through the hospital; each stage of their care is completed with minimal delay.  But when the system is broken, patients accumulate like a reservoir, and you find chronic delays, like those experienced in many big city emergency departments.”

The California HealthCare Foundation-funded project focused on three safety net hospitals experiencing problems with high capacity, low productivity and scheduling bottlenecks.  The hospitals were Arrowhead Regional Medical Center in Colton, CA, the county hospital for San Bernardino, CA; White Memorial Medical Center, a not-for-profit hospital in Los Angeles, CA: and Mendocino Coast District Hospital in Fort Bragg, CA.
Researchers devised new patient flow procedures for radiology departments.

The facilities were selected from among 20 hospitals submitting proposals to participate in the study.  They shared common patient flow problems, such as excessive wait times, especially for outpatient diagnostic imaging procedures, low patient satisfaction, and under-use of equipment. 

After initial interviews with hospital management and staff, the Viterbi School researchers spent three months collecting data at each facility.  Then they developed flowcharts, productivity measurements, process models, benchmarks and simulations of various alternative strategies to improve the health care delivery at each facility. 

With a few improvements in scheduling procedures and a few new monitoring systems, the researchers reported dramatic changes in patient flow and an increase in the number of people being seen in a timely fashion at all three facilities, Belson said.  That transformation occurred within a matter of months after implementation of the new procedures.
The results of these projects prompted other hospitals to request similar patient management overhauls, Belson said.  Three additional projects have begun at Riverside County Medical Center, Ventura County Medical Center and Children’s Hospital of Los Angeles. All three of these hospitals have been asked to improve their operating room turnaround times and increase their capacity without exceeding existing resources.  
White Memorial Medical Center in Los Angeles was one of the facilities participating in the patient flow project.

Ironically, the industrial engineering principles implemented at the hospitals aren’t really new to the health care industry, Belson said, they've just fallen by the wayside in the last few decades.  In addition to that problem, the researchers also reported a certain amount of "cultural inertia" — resistance to changes in a hospital's way of doing business — which is typical in most large organizations.

“I think some of these problems may subside when health administrators and graduate students are trained in these engineering strategies," Belson said.  "The principles behind patient management and flow, such as queuing theory, are important to understand before the approach will really catch on again."
USC’s Daniel J. Epstein Department of Industrial and Systems Engineering and the USC School of Policy, Planning and Development are addressing that need with a new master’s degree program in management engineering. 

The master's degree program will train working professionals and graduate students headed for careers in health care management in the industrial and engineering tools that have transformed other complex, high volume industries, such as telecommunications, transportation and manufacturing.

The new online degree program will be operated jointly by both schools and be offered beginning in fall 2008.