PHYSICIANS RESPONDING TO DIMINISHED PATIENT VOLUME

Posted on September 7, 2014 by Dr. David Edward Marcinko MBA MEd CMP™

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J.I.T. AND MEDICAL OFFICE PROCESS EFFICIENCY

[By Dr. David Edward Marcinko FACFAS MBA CMP]

dr-david-marcinko1Much of what is done in Just In Time labor control  is aimed at reducing  the doctor’s wait time (radiographs, accu-check sugar levels, urine cultures, blood tests, injections, cast changes, etc.), the patient’s wait time (check-ins, check-outs, insurance verification, pre-certification,  etc.),  the move time (procedure set-up time, referrals, transportation, etc.) and quality time (education, emotional support and hand-holding); increasing actual patient physician service treatment time.

This can be expressed as the sum of four parts: 

     Treatment Time

(+) Wait Time

(+) Move Time

(+) Quality Time

_____________________________

Total Time: (Efficient or Inefficient)

Only the patient’s treatment time (doctor-patient interaction) adds value to the medical service. Wait, move and quality time are all non-value added services and should be eliminated to the extent possible, as they represent  needless expenses. All can, and should be performed, by non-physician personnel.

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Tasks to Delegate

The following represent tasks that the doctor can easily delegate in order to increase his or her office time efficiency:

* Patient scheduling, routine telephone calls, office directions, pre and post operative orders, triage, referral and pre-certification  and prior-approval forms and faxes, co-payment recoupment and office visit charges, pharmaceutical representatives and detail people.

* Initial historical review, vital signs, insurance updates, telephone call-backs,  and data gathering information on all patients.

* Injections, allergy testing, PAP smears, cultures, blood tests and phlebotomy, , gram stains, specimen preparation and other similar routine procedures.

* Prescription writing, acne medication, dermatological preparations, refills, pharmacy interaction and drug interaction explanations.

* Minor procedure assisting, suture removals, x-rays, casting, pathology and laboratory reports, ultra-sound, physical therapy and bandaging.

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Tasks Not to Delegate

On the other hand, the following tips to improve physician time management might prove useful:

* Focus on patient and avoid interruptions in the examining room which should not have a telephone or intercom system; a  light or sound signaling system might be considered instead. Listen carefully and repeat  phrases back to patients in order to enhance communications and reduce errors. Reduce socialization time at work, the office or hospital setting.

* Schedule patient/physician call backs in specific time clusters; and/or consider a car phone or portable telephone or other personal digital assistance electronic device. If you have an open door office policy; keep it closed until all calls are returned. Inform your staff to avoid appearing unfriendly.

*  Make a short, intermediate and long terms task list of goals to be accomplished every day. Complete all of the important tasks, and keep track of those yet to be done. Stay flexible. You want to drive the list; not have the list drive you. Avoid an over-achieving mentality. Save something to do tomorrow.

*  Make proper time estimations using the Two-and-a half Rule, since it involves allocating an extra amount of time to perform given tasks, caused by interruptions, unplanned events or other minor problems. In this way, your daily priority task list will be more realistic.

* Use stock letters, paragraphs and/or  “macros” in your dictation system. The use of computerized charting notes is fine as long as the potential for litigation and defending such “canned assembly-line” notations is  considered.

* Avoid practice management, office or business meetings in the evening or after office hours. Rather, hold them before hours in the morning or during lunch time. Have food catered for a staff  treat but do not loose the focus and real purpose of the meeting.

* Review the telephone log and the next day’s schedule before departing for home or the hospital.

* Use the Rule of 7’s,  and realize that if there are more than seven people involved in a committee or office project, there are probably too many. Also realize that when you are appointing committees for TQI endeavors, remember that 5-7 people will provide the same results as a larger group.  If you are a key player, then by all means stay involve. If not, minimize your participation, since the rule reduces some of your non-medical functions. Forget perfection.

* Follow the time efficiency philosophy of professional managers, and “do, delegate or dump”  non-medical tasks; and handle paperwork or other chores only once.

* Reduce the number of needless office, hospital or surgery center meetings; speed read non-medical literature and reduce your material  (operating assets) office needs.

* Keep your office staff and family informed of your desire for office and time efficiency; do not forget your loved ones, religious affiliation, personal or physical (exercise) needs. Maintain a healthy, happy and psychologically fit lifestyle.

Results of JIT Implementation

When correctly applied, JIT labor and inventory controls may reasonably be expected to yield the following benefits:

1. Greater doctor and employee productivity through improved  office physical layout.

2. Reduced treatment and business management time resulting in the potential to see more patients, or the same number of patients with less time urgency and personal stress.

3. Inventories of durable goods are reduced and expensive storage space is made available for revenue generating activities.

4. Patient quality and services are rendered in a cost effective and value added manner.

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RESPONDING TO DIMINISHED PATIENT VOLUME

The most appropriate response to diminished or declining patient volume is the transformation of as many fixed office costs as possible, to variable costs. This cost reduction strategy does not call for cost cutting per se, but for a change in the relative ratio of fixed to variable costs. It can be accomplished by (1) using temporary staffing, with its associated risks and benefits,  (2) outsourcing as much as possible, with its associated risks and benefits, (3) leasing or renting rather equipment rather than buying, and (4) using JIT purchasing and labor.

Assessment

The reviewed time management techniques represent powerful techniques for increasing practice profits in the competitive environment. Implementation will decrease personal stress and assist the efficient physician develop the most economically profitable service  and operational  flow process possible for the office.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

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Medical Inventory Management Methodologies

Posted on August 7, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

Understanding Traditional Costing Methods

By David J. Piasecki, with
Hope Rachel Hetico; RN MHA, CMP™cmp-logo1

A good inventory management system offers opportunities for improved efficiency in any healthcare organization. The following traditional methods of inventory cost accounting and management are useful when one is calculating the cost of supplies (as opposed to medical items for resale and DME).

a. LIFO

The last-in first-out (LIFO) inventory costing method means the last items purchased are the first to be used (at least for cost calculations if the inventory consists of identical units). In times of rising prices, a lower total cost inventory is produced with a higher cost of goods sold. The last items purchased are most often the most expensive, and used first for the calculation. This happens because LIFO increases an expense (cost of goods sold) and decreases taxable income. Given the same revenue, higher expenses mean less profit. Deflation has the opposite effect.

b. FIFO

The first-in first-out (FIFO) inventory costing method means the first items purchased are the first to be used (at least for cost calculations if the inventory consists of identical units). In times of rising prices, a higher total cost inventory is produced with a lower cost of goods sold. This happens because FIFO decreases an expense (cost of goods sold) and increases taxable income. Deflation has the opposite effect.

Note: Any switch from FIFO to LIFO does not change reality, and although a decrease in reported incomes occurs, it does not increase cash outflows. However, for a taxable healthcare entity, after-tax net cash flow does increase.

c. Specific Identification

Specific identification is used for larger pieces of equipment, as it traces actual costs to an identifiable unit of product and is usually applied with an identification tag, serial plate, or radio frequency identification device (RFID) scanner. It does not involve flow-of-cost analysis. It does, however, permit the manipulation of income because healthcare entities state their cost of goods sold, and ending inventory, at the actual cost of specific units sold.

d. Average Cost

Average costing calculates ending inventory using a weighted average unit cost. When prices are rising, cost of good sold is less than under LIFO, but more than that under FIFO, and hence income manipulation is also possible.

e. Just-in-time Management

Although technically not a costing technique, JIT inventory management means that inventory supplies like DME are delivered as soon as needed by the healthcare organization, the prescribing doctor, or the patient. In JIT, inventory is “pulled” through the flow process. This is contrasted to the “push” approach used by conventional IM. In the push system, DME is already on-site, with little regard to when it is actually needed. In the JIT “pull” system, the overriding concern is to keep a minimum cost inventory, so that means having a system in which inventory is obtained on an as-needed basis.

The key elements of JIT consist of six parts:

1. a few dependable vendors or suppliers willing to ship with little advance notice;

2. total sharing of demand information throughout the supply chain;

3. more frequent orders;

4. smaller size of individual orders;

5. improved physical plant (hospital or clinic) layout to reduce travel flow distance; and

6. use of a total quality control system to reduce flawed medical products.

Using the JIT method, inventory is delivered when needed, rather than in advance, saving handling and storage costs. The healthcare entity never needs to stockpile inventory, and cash flow is enhanced. JIT is further characterized as follows:

  • little or no work orders;
  • little or no tracing of materials;
  • fewer inventory accounts or accounts payables;
  • reduction or elimination of work-in-progress or handling activities; and
  • no tracing of overhead and direct labor costs

JIT requires a dependable working relationship with suppliers and the precise calculation of inventory needs, especially for the following:

  • sterile surgical packs;
  • gastro-intestinal and gastro-urinary instrumentation;
  • orthopedic and OB-GYN inventory;
  • invasive heart and lung equipment;
  • radio isotopes and trace radiographic materials; and
  • equipment for almost all pre-schedule medical interventions and procedures.

Assessment

This means that, when JIT inventory monitoring is used, healthcare managers are better prepared with the proper inputs to control and reduce inventory, including when dramatic bursts or declines occur. This means a more rapid and higher cash flow balance, rather than inventory balance. Each of these traditional methods of inventory cost accounting is adequate for most healthcare facilities, but as inventory orders and costs continue to increase, economic order quantity [EOQ] costing may be the most effective means of accounting for inventory in DME-intensive organizations.

Conclusion

And so, your thoughts and comments on this Medical Executive-Post are appreciated. Can you think of any other inventory management technologies?  Tell us what you think. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, be sure to subscribe to the ME-P. It is fast, free and secure.

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JIT and Medical Office Process Efficiency

Posted on December 1, 2008 by Dr. David Edward Marcinko MBA MEd CMP™

Augmenting Labor and Human Resource Efficiency

By Dr. David Edward Marcinko; MBA, CMP™

Much of what is done in Just-In-Time [JIT] labor control is aimed at reducing the doctor’s wait time (radiographs, veni-puncture, urinalysis, vital signs, cast changes, etc.), the patient’s wait time (check-ins, check-outs, insurance verification, etc.), the move time (procedure set-up time, referrals, transportation, etc.) and quality time (education, emotional support and hand-holding); all increasing total actual patient service treatment time.

Summation Equation

This patient service time can be expressed as the sum of four parts:

Treatment Time                                        

(+) Wait Time

(+) Move Time

(+) Quality Time

Total Time: (Efficient or Inefficient)

Treatment Time is Key

Only the patient’s treatment time (doctor-patient interaction) adds value to the medical service. Wait, move and quality time are all non-value added services and should be eliminated to the extent possible, as they represent needless time and cost. All can, and should, be performed by non-physician personnel.

Labor JIT

When correctly applied, medical office HR JIT may reasonably be expected to yield the following benefits:

  • Greater doctor and employee productivity through improved office physical layout.
  • Reduced treatment and business management time resulting in the potential to see more patients – or – the same number of patients with less time urgency and personal stress.
  • Inventories of durable goods are reduced and expensive storage space is made available for revenue generating activities.
  • Patient quality and services are rendered in a cost effective and value added manner.

Conclusion

As always, your thoughts and comments on this Medical Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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