No matter the industry, every organization faces issues of efficiency and cost management. Hospitals, however, must also deal with patient outcomes, making their work particularly difficult. Hospitals are constantly pushed to become more productive and cost-conscious, yet remain committed to their original mission—helping patients.
According to Diwas KC, associate professor of information systems & operations management, the many challenges that hospitals encounter require a better understanding of the behaviors of medical professionals and patients. In KC’s research, he explores the unique operational issues hospitals face when addressing the continuing cost vs. care dilemma. According to KC, the demands of a hospital provide a natural setting to study productivity, quality, cost, and capacity management, making it a rich environment for operations management research. “The healthcare industry faces some of the most pressing socioeconomic issues of our time in both complexity and scale,” he says. Today, the Centers for Medicare & Medicaid estimate that healthcare spending accounts for about 17.5 percent of the US gross domestic product. “I wanted to research something that would have an impact down the road,” he adds. “Healthcare certainly fit the criteria.”
Admittedly, says KC, the field of management science and behavioral theory was relatively late to the table when it came to delving deeply into hospital operations. That was another motivating factor for his initial research path, and KC was relatively early to the game. “Over the last 10 years, the field has certainly evolved,” he says. But as the research has increased, so too has the complexity of healthcare. “Changing reimbursement schemes are putting more demands on the system,” he adds. And while the delivery of care must be the top consideration, hospitals are finding that they need to not only improve the way they do their work, but also do it with the same or fewer resources.
The Affordable Care Act has made that mandate even more pressing, given the penalties and incentives tied to the readmission of patients. While KC notes that new tools to analyze and use patient data are promising, the healthcare industry is far from where it needs to be. Technology might offer a window into patient outcomes, but when it comes to an individual patient’s life, it’s still hard to know how to apply that data. That’s where operational research can pick up the proverbial slack, he says. KC teases out the link between worker productivity and quality of care, noting that his findings proved to be a bit surprising. Hospitals are certainly busy places, and the assumption is that all multitasking decreases the productivity of hospital staff. But according to his research, there appears to be an ideal level of multitasking in an ER setting. “Hospital staff experience a considerable amount of downtime, waiting for lab work, for instance.” That time can be best used to see new patients or perform other routine duties. While physicians faltered when bombarded with work, they seemed to thrive when they were given a bit of a challenge.
In additional research, KC also discovered a critical link between how effectively a hospital manages capacity and whether it is able to save money and improve patient outcomes. He takes a deep dive into the issue as it applies to one of the most expensive parts of a hospital—the cardiac intensive care unit (ICU). KC notes, “When the ICU is very busy, what ends up happening is that some of the patients will get discharged when they normally wouldn’t, simply to make more space for new arrivals from the ER.”
His research showed an increased likelihood of “bounce back” or readmission for patients discharged early, costing the system more and bottlenecking the ICU further. He proposes a better solution, arguing that administrators should be more selective in the type of patients discharged. The sickest patients would remain in the ICU, and the patients with less severe conditions might move to a more cost-effective “step-down” unit with a smaller staff and less monitoring.
KC’s research also tackles the impact of universal healthcare, tracking the behavior of newly insured patients after the implementation of the Massachusetts healthcare reform law. He and his coauthors discovered that safety-net hospitals ended up losing market share, but the newly insured patients also experienced improved care by being able to make a choice of hospitals.
KC says what he hopes to contribute to the ongoing research is to find a way to break down the noise and find “real world solutions for real world problems.”
“There are multiple players and providers who make decisions in healthcare, and those decisions aren’t made in isolation, so it is difficult to make changes,” he admits. But given the magnitude of the problem and the need for quality and cost-effective care, it’s a field of study he sees as compelling and vital to the health of the US.
