the dark side of hospital patient flow… Part 1

Flow is defined as the quantity of some item (units of an item) passing by, leaving, or arriving at some point in a designated unit of time.  So, flow is defined by four parameters: units(1) of an item(1) , a specified point(1), and units of time(1).

When we talk about hospital patient flow, what are the units we’re referring to? And what is the point to which we’re referring?  Obviously, that depends upon the context.  Let’s take a simple example: Lab tests could be defined by the number of samples being processed by a piece of equipment in a day. But even this simple example has defining problems.  The total number of test performed in a day might be irrelevant if the peak rate (think electric power company in the summer when everyone gets home from work) determines if the system crashes, so you build for peak times.  Even the peak rate might not be the best determinant if an essential electrolyte test from the ER or surgery can’t bypass the waiting line in order to determine a life saving intervention, so you might design for emergency times (with a higher investment involved for both).

Then there’s the question, ‘Is faster, better?’, and the companion question of ‘who is the observer?’. In a work place where people are paid a flat salary or by the hour, a slow steady pace beats a frenetic pace.  If the worker is paid by CPT codes completed, then a faster pace would be much more desirable.  Hospitals have a mix of these two sets of people: those paid by time worked, and those paid piecemeal.  Conflict over the best rate of flow naturally arises.  There’s an additional problem with the value of the piecemeal work being influenced by the value of the CPT code, with the calculation of ‘CPT compensation divided by time’ coming into play.

In this highly monetized culture of ours, we could be cynical and say that the best hospital patient flow is the one that brings in the most money. But, even that definition has problems. Hospitals are not known for being in the forefront of modern financial developments.  Finance has taught, and many corporations and investors have realized, that it’s the cash flow that matters when valuing the continued functioning of the company.Calculations to value a company (and its stock) can require painstakingly detailed analysis of accounting information to tease out the actual free cash flow of a company. Many companies keep two sets of accounting books (figurative): one for public consumption, and one for managing the company.  Unfortunately, hospital senior administrators are sometimes reimbursed on the basis of the public consumption set of accounting books.  There are also whisperings that hospital administrators feel that they should be paid comparable salaries to the heads of other corporations. So there is pressure to make the public accounting books look ‘good’.

This can cause an increase in the time a patient is in the hospital (decrease in patient flow) in-order-to increase cash flow or accounting profits.  It’s a common joke that a patient is discharged from a hospital only after the insurance runs out.  I can name at least one hospital that was dropped by a major HMO after churning patients; and I suspect you can give a few examples yourself of the inverse relationship of a hospital’s assessment of a patient’s need for care and the availabilty of insurance compensation for the hospital.

So, when you’re trying to optimize a hospital patient flow, whose definition of flow are you optimizing?  The patients?, the surgeon’s?, the nurse’s?, the radiologists?, the ob-gynecologists?, the CFO’s?, the lab’s?, an administrator’s?  No wonder it’s hard to make everyone happy.  You can optimize a particular ‘flow’, but it might be cutting into someone’s pocketbook, lounge time, or year-end bonus.

About Brian D Gregory MD, MBA

Board Certified Anesthesiologist for 30 years. TOC design and implement for 30 years. MBA from U of Georgia '90: Finance, Data Management, Risk Management. Practiced in multiple US states and Saudi Arabia at KFSH&RC and KFMC Taught residents in two locations. Worked with CRNAs for 20 years.
This entry was posted in board of directors, CEO, healthcare reform, scheduling, surgeon and tagged , , , . Bookmark the permalink.

1 Response to the dark side of hospital patient flow… Part 1

  1. As CMIO, and emergency physician/vice-chair, patient flow and efficiency are core to my world, and now we are formally studying, via the Penn State CIHDS. Your comments are RIGHT ON, and we need to find that balence between speed and haste

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s