Good
Patient Care Makes Good "Cents"
PRESENTER:
Sue John, Health Economics Manager, Smith & Nephew
PROFILE:
Sue's background includes nine years in middle management
in Victorian public hospitals. Her academic credentials
include a Masters of Business in Management. Sue's Masters
thesis involved examining operating room practices and finding
ways to make them more cost-effective. Sue has worked for
Smith & Nephew since 1995 and her primary focus is the
development of economic models for evaluating product cost-effectiveness.
ABSTRACT:
This
presentation introduces the concept of health economics
in product evaluation. Health economics is concerned with
cost-effectiveness in healthcare, which is defined as achieving
effective health outcomes for the best total cost. Pressures
for cost-effectiveness will be discussed as well as possible
solutions for providing cost-effective patient care. The
most cost-effective way to treat a patient is to heal them
as quickly as possible and move them out of the healthcare
system.
Products should be evaluated primarily for their impact
on clinical outcome and patient care - economic evaluation
should be a secondary evaluation of products deemed clinically
equivalent. Clinical benefits drive economic benefits, hence
the link between cost and clinical effectiveness in the
definition of cost-effectiveness in healthcare.
The
key cost drivers in wound management and I.V. line management
will be introduced to highlight the relative significance
of the purchase price of products on the total cost of patient
care, whether that care is delivered in a hospital inpatient
or a community nursing setting. The false economy of making
product purchasing decisions on the basis of price alone
will be demonstrated.
Two
approaches to evaluating products for their cost-effectiveness
will be demonstrated: one qualitative and the other quantitative.
The alignment of evidence-based practices with evidence-based
products will also be explored.
Cost-effective
patient management delivers clinical and economic, tangible
and intangible benefits to the individual patient, the budget
holder, the hospital, the healthcare system and the wider
community. Good patient management makes good 'cents'.
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Purchasing for the Future
PRESENTER: Raj Gonsal Korale, MBA, Grad Dip( Logistics Management),
AFAIM
Acting Director, Area Supply Services, Western Sydney Area
Health Service, NSW, Australia
ABSTRACT :
Traditionally,
purchasing has been transaction focused, and it still is
in many organisations. The mindset required to moving it
from traditional methods to more futuristic methods has
been slow in coming due to a variety of reasons. A contributor
to this apathy has been the lack of interest and understanding
not merely on the part of a purchasing officer, but also
on the part of the CEO and other senior executives of organisations.
The procurement function has been relegated to a lower order
of priorities in the mind of CEO’s and as a result,
the quality of purchasing personnel have been deficient,
as all that has been required have been processors rather
than real buyers and strategic thinkers.
Traditional purchasing has relied or been centered on cost
control and tactical purchasing. Snapshot performance has
been adequate as organisations were interested in what you
achieved today rather than in longer term benefits.
Happily
this situation is changing and CEO’s are attaching
significant importance to purchasing and supply, elevating
Supply Managers to senior positions within organisations.
This lifting and recognition is requiring supply managers
to be better informed, better trained and better able to
differentiate between tactics and strategy so that they
can participate in corporate planning and delivering corporate
objectives.
Strategic
needs are increasingly influencing procurement decisions
and decisions are being based on total costs requiring organisational
personnel to better understand supply chain operation and
costs associated with the entire chain rather than a part
of it. Strategic alliances with suppliers, cross functional
team approaches to securing optimum purchasing outcomes,
continuous training, and education, and purchasing staff
working on projects rather than in functional silos are
replacing traditional approaches to purchasing and supply.
These changes are giving rise to flatter organisation structures
and verticalisation of supply chains and distribution of
functional expertise within an organisation.
Greater
reliance on technology to facilitate the efficiency of processing
work and freeing up purchasing personnel to engage in more
strategic activity, and to enable purchasing managers and
others in cross functional teams to be better informed prior
to sourcing decision making, is seen as a vital role to
be performed by information technology.
Recent
studies done in Australia, (DASH Project – Diagnostic
of the Australian Supply Chain to Hospitals done by Price
Waterhouse Coopers, Strategic Supply Reform done by KPMG
for the NSW Health Peak Purchasing Council, and Advice on
Supply Chain management and Logistics – Ministerial
Review of Health care Networks in Victoria done by Miller
network group) all encompass these future directions in
their recommendations. Similar studies done in the USA,
The Future of Purchasing and Supply, A joint research initiative
of the Centre for Advanced Purchasing Studies, National
association of Purchasing Management and A T Kearney Inc,
and Purchasing and Supply management: Future Directions
and Trends, Centre for Advanced Purchasing Studies, have
identified these as trends, in their work.
If
these are the trends and the challenges for the future,
perhaps seen by some as bottomline strategies, one has to
ask whether the ultimate objective of the business we are
in, ie delivering more efficient and effective health outcomes
will be attainable within the scope of futuristic trends
identified in the purchasing activity. The object of the
presentation is to identify the future and its challenges
as well as drawbacks which would impact on achieving outcomes
which organisations engaged in delivering health services
are bound to face, on occasion, as conflicting priorities.
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The
Uncertain Organisational Costs and Benefits of New Surgical
Technology Adoption
PRESENTER: Ms P. Lynne Johnstone
Lecturer
in Health Services Management, School of Public Health,
Charles Sturt University - Mitchell
Panorama Ave BATHURST. NSW 2795
Telephone: 02 6338 4497, Facsimile: 02 6338 4993
E-mail: ljohnstone@csu.edu.au
PROFILE:
P.
Lynne Johnstone
RN,
BHSc(Mgmt)(Dist)CSturt, GDipCom(BusInfSys)W'gong, GDipHthEc
UNE,
PhD (under examination), Macq FCHSE, CHE
Lynne
is a lecturer in health services management at Charles Sturt
University in Bathurst NSW and her teaching areas include
the theory and application to health service organisations
of the theories of organisations and organisational behaviour.
Her
health industry work experience prior to becoming a full
time academic in 1993 was principally in operating rooms
in both the public and private sectors of NSW in the various
roles of scrub nurse, nurse educator, and operating suite
manager. In addition to her nursing qualifications and a
total of about seventeen years health service industry experience,
Lynne has completed tertiary qualifications in health services
management, in commerce (specialising in business information
systems) and in health economics. She was awarded the Charles
Sturt University Medal in 1994. Lynne expects to have been
awarded her PhD from Macquarie University by early 2001.
Her PhD thesis explored changes in the nature and volume
of work associated with technological developments in surgery
performed in operating theatres since 1988 in Australia,
and her address at this conference deals with some of the
practical health services’ outcomes of her study.
Lynne
is a Fellow of the Australian College of Health Service
Executives, and has continued an active interest in operating
theatres issues by way of her associate membership of the
NSW OTA, by researching clinical and managerial matters
which impact on operating theatre staff, and as a member
of the ACORN Editorial Board.
ABSTRACT :
This
address discusses the process whereby decisions to adopt
new surgical technologies are made, and what assumptions
about the associated costs and benefits of new technology
adoption influence participants in the decision process.
It highlights how the majority of proposals to acquire new
surgical “artefact” technologies are initiated
by clinical professionals on the basis of a technology’s
technical characteristics and/or the empirically-based or
perceived clinical benefits. It further highlights how the
formal proposal to acquire a technology is frequently compiled
in the absence of reliable data (or no data at all) about
the potential financial implications for the organisation
beyond the initial capital cost of the technology. Consequently,
these proposals are at best an approximation of the organisational
costs and benefits of acquiring any new technology. At worst,
they are an exercise in complying with the hospital’s
documentary requirements for acquiring a new technology,
the outcome of which might bear little if any resemblance
to the documented expected costs and benefits.
My
research reveals two issues that are relevant here. First,
that new technology adoption has contributed to the net
increase in the labour intensity of surgical production,
a fact generally unrecognised by executive managers, not
because they haven’t been told, but possibly because
it doesn’t fit within their world view of what technologies
“do”. Second, that there are usually no post-acquisition
evaluations done of the expected and actual costs and organisational
benefits. Consequently, executive managers largely assume
that what has been documented in the proposal documents
is “truth”, and that financial benefits are indeed
accruing to the organisation as a consequence of the new
technology adoption. In other words, the pervasive view
of executive managers that new surgical technologies are
enhancing operating theatre services’ efficiency and/or
productivity is a self-perpetuating myth. I propose that
this myth will be perpetuated as long as the rational management
paradigm (along with its established techniques) prevails,
and as long as no alternative easy-to-use, but rigorous
measures of public health costs and benefits of new surgical
technology adoption are available to participants in the
decision process.
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10th ANNUAL CONFERENCE