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Manufacturing Simulation Game - "LEGO"

Resource Management
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Integrated resource management within health care tends to be multi-layered and driven by the demands of a diverse customer base. This multi-disciplinary service industry is complex, ranging from acute care units to rehab clinics, physician practices, and home health care facili­ties. Perhaps this diversity is more prevalent within health care, yet how do these characteristics influence integrated resource management?

An introspective view of the health care business model poses chal­lenging integration resource requirements that do not embrace tradi­tional supply-demand chain methodologies. Healthcare supply chain demands commonly embrace a melding of medical science mysteries with a patient-care focus, where historically cost has not been a barrier to making the patient well. This is changing. Basic efficiencies gained through more conventional supply chain management practices are slowly beginning to affect health care. Market-driven pressures to pro­vide quality patient care with cost-consciousness have facilitated stra­tegic business alliances and partnerships such as group purchasing or­ganizations and vendor-managed inventories. A process-centered fo­cus is fast evolving that incorporates supply chain and delivery of care events into a newly defined integrated resource management model.
What is the business impact? The health care industry is quickly learning how to reshape its supply chain boundaries as emerging infor­mation technologies are implemented to continually improve and con­nect once disparate systems.

 Adopting these new technologies, how­ever, has forced change. The following are insights and observations gained from a materials management implementation team that has adopted such technologies as enterprise resources planning (ERP) and electronic commerce. The impact has been as diverse as the industry. Outcomes of the project have focused on improved processes, stan­dardization of data, and a retooling of many longstanding practices. These dynamics have affected the existing internal and external supply chain systems throughout the organization with an impact that is still being experienced.


The APICS Dictionary (9th edition) states the third definition of re­source planning as "an emerging field of study emphasizing the sys­tems perspective, encompassing both the product and process life cycles, and focusing on the integration of organizational resources toward the effective realization of organizational goals." Within the health care industry, we can find several instances of integration within the sup­ply-demand chain process. However, conventional resource planning takes on a new bent when applied to the industry. Health care provid­ers have traditionally been challenged when planning and forecasting for patient mix and service demand. The adage of fee-for-service is transitioning toward case management as consumer-savvy patients demand cost-effective results. Market-driven cost-savings strategies are rapidly growing.
Consider the following: Out in the clinical marketplace exist recent business initiatives called integrated delivery networks (IDNs), or re­gional integrated delivery systems (RIDS), which were developed to remain competitive and cost-effective. These organizational models and newly adopted alliances combine physician practices, management service companies, hospitals, and information technologies into more efficient delivery of health care services within a geographic area. Pa­tients are seen, conditions are diagnosed, cases are referred, contracts are signed, facilities are provided, data are transferred, and invoices are paid all with a collaborative effort. This trend is sometimes re­ferred to as the "continuum of care."

Strategic initiatives have also taken root in order to keep up with public cries for cost reductions and quality service. Clinical pathways, procedural-based costing, computerized patient records, and patient-centered care are the new buzzwords for redefined business processes. These initiatives employ some blend of standardized processes that promote connectivity across disciplines and information technologies. For example, when a patient enters the Emergency Department with chest pains, he goes immediately to a "chest pain bed" attended by specialized personnel and equipment. The patient is evaluated to rule-out secondary procedures and is treated with standardized protocols that include tests, meds, diet, referrals, and follow-ups. This special­ized "patient care protocol" is much like a bill of materials in the manu­facturing world where the resource supply-chain demand becomes somewhat predictable and manageable. Activity-based costing in health care is now a reality.

Changes as described above dramatically impact supply chain re­quirements. Longtime integrated supply chain practices like electronic data interchange (EDI), stockless and vendor-managed inventories, re­duced stock levels, streamlined processes, and enterprise resources plan­ning are being adopted within the industry. These proven business prac­tices clearly earmark direct cost-saving improvements for health care providers and advocate the continuous process improvement the mar­ketplace is demanding. Clearly, the future vision of more efficient health care resource management drives a systems perspective that is more closely aligned with the APICS definition, a systems perspective that supports

• a patient focus in the delivery of high value products and services
• a process focus that is interdependent and interconnected
• a continuous flow of product and information with no boundaries,
no interruptions, and total pipeline visibility.

To recap: "A systems perspective...integration of organizational re­sources toward the effective realization of organizational goals." How do you measure integration of resources within the. health care indus­try? While tangible products are easy to quantify, it is much harder to measure quality of services at point of delivery. The challenges of de­fining integrated resources in health care are based on understanding the culture and taking a step back to examine existing systems cur­rently in place.

To Be Continued


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