What kind of patient volume can you handle before patients get frustrated with wait times? Before the variability impacts patient safety, outcomes? There's an inflection point where the optimal volume meets optimal outcomes. In this video, Nordic Director of Optimization Rick Shepardson explains where that point is and how smart organizations find it.
Rick is working the white board pretty well in this video, but if you prefer to read, jump to our transcript.
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Rick: Hello, we are here today to talk about supply and demand as it applies to manufacturing, and then healthcare. In manufacturing for decades, for centuries now, mathematicians have used quantitative mathematics, and queueing theory. There's a Little's Law within there that describes the way that as you increase your utilization of your machines, so as you get closer and closer to 100% of your machine capacity being used, you start to get closer to an infinite wait time, or increased number of defects.
What manufacturing organizations try to do is manage this inflection point. They try to figure out the most amount of their capacity they can use before the defect rises exponentially. What this will do is help to minimize costs, or manage costs. You’re producing the most number of widgets that are going to be sellable widgets, you won't have to throw them away because there's defects.
In healthcare, and service industries at large, utilization and queueing theory apply. They just apply a little bit differently. In healthcare there's more variability. What that means is that the inflection point happens earlier. You're able to use less of your overall capacity before you start to experience a decrease in outcomes, or safety, or patient satisfaction. It's logical, as a nurse has to provide care for more patients the likelihood that they might miss something could have a bad affect on the patient is more likely.
As your patient population increases there's a likelihood that those patients are going to be more variable, they're got different diseases or problems. They've got different tests that are necessary, and different doctors or care team members that have to care for them. That increased variability while you're increasing the overall utilization, you've got more patients coming in, means that you'll have fewer and fewer patients you'll be able to see before your outcomes, or your safety start to decrease.
Healthcare organizations can help to manage this by trying to standardize these workflows, or standardize patient clinical outcomes, while also increasing their ability to use their utilization. How can we more efficiently use all of the beds, or use all of the doctors, or available visit slots? As this plays out over time, this concept of variability, and increased patient volumes, is constantly offset by an increase in standardization, and an increase in capacity, or provider visits.
Organizations do well to target roughly how many patients are they going to be able to see, and at what point will those patients get upset that they're having to wait so long. It's not necessarily utilizing 60% of your capacity, but this could be an "X" number of patients that you want to see. Targeting what that ideal number of patients to see will be relative to what's known as a acceptable wait time, or maybe you do some surveys to understand how long they're willing to wait. That is going to allow you to target how to manage your capacity, and how to grow your organization, your service lines. Also, how aggressively to try to build your patient base, or increase your referrals.
We're going to talk a little bit more about this again in an upcoming video, so stay tuned, but hopefully this was a little insightful, and thanks for watching.
We're always open for discussion. Tell us how you find your balance.