BPR Online Learning Center Series
Return to INDEX
PROCESS OVER FUNCTION: Preparing for Reengineering in Health Care
by Jacquie Gentry
It could be argued that our health care delivery system in this country is actually paid to be inefficient. We have the highest-cost health insurance and the lowest percentage of people insured and the highest administrative costs of any Western country. Add a complexity that is unique to health care stemming from little to no continuity between care sites or even incidents of care, ongoing pressure from health care consumers for lower cost, quality health care, and you have an industry scrambling to reinvent itself.
Health Care leaders are responding with anything from mergers to minor shifts in strategic thinking. Some health care industry leaders answering the call for significant change are faced with outdated organizational models that are complex and inflexible. One of the key success factors for reengineering in health care will be the ability of health care leaders to redefine their organizations in terms of process.
In a fee-for-service environment where patients pay for each service or procedure, the work of health care has revolved around functions or "units" of care. In recent history, specialization of both medical service professionals and their support staff has been a lucrative approach to doing business in health care because of the higher fees that could be charged to patients. However, more efficient health care delivery models such as Health Maintenance Organization's (HMO's), Preferred Provider Organization's (PPO's) and managed care systems that have evolved over the last half of this century are already in the business of containing costs for their customers and are better positioned for growth.
HMO's, PPO's and managed care systems incorporate capitation, or payment per capita rather than per service. Although these practices are all organized differently, they share a fundamental shift from the fee-for-service environment. An HMO, for example provides health care services for members who prepay a premium with limited copayments. Since a predetermined amount is established to serve patients, a shift in strategy to minimize services rather than maximize services commands a new approach to the organization of work and people. Whether this is good or bad news for patients continues to be debated. However, the vision to drive health care costs down through improved efficiency and quality of care is one that will drive rapid change in health care for the foreseeable future.
As health care leaders plan new strategies and directions for their organizations, many will be faced with a very complex and disconnected picture. Organizations with hard functional boundaries and multiple levels of management will be like cars on a race track with no wheels. In order to get moving quickly and in the right direction, the work will need to be defined in whole processes and the organization of people will need to enable these processes. The bottom line is that processes are reengineered, functions and organizational charts are not.
Process was defined in an earlier module by Jeff Hiatt, Introduction
to BPR, as a set of inputs transformed to produce outputs to the customer as shown below.
A feedback loop from the customer back to the process is necessary for process management.
Customer input is also necessary to define organizational processes. In order to become
process centered, health care leaders will have to ask: Who do we serve? What do our
customer(s) perceive as being whole services or "outputs"? These questions force
the organization to begin and end with the customer(s) and will optimize the quality and
speed with which the organization can respond to their changing needs.
Due to the number and configuration of services in most health care organizations, the shift to a process orientation would typically involve grouping multiple functions. Processes are defined as a group of functions that result in a whole output to the patient, not necessarily a whole service.
For example a surgical center requires hundreds of functions in order to operate. The output of a surgical center for each patient is a surgical service. However, the patient as consumer expects a consultation, pre-operative exam, the surgical procedure and follow-up care. Each of these visits are viewed by patients as a whole output. A surgical center going through the exercise of process definition may then identify these elements as their business processes. Work and people would be organized within these four processes. Customer needs as well as knowledge of their expectations will help an organization clarify what qualifies as a whole output.
So where does the journey from function to process begin? At their satellite location in Scottsdale, Arizona, the world renowned Mayo Clinic recently implemented organizational changes that reflect progression toward a process centered model for medical service delivery.
Since opening in 1987, Mayo Clinic Scottsdale patients were accustomed to reporting to one of nine large reception desks for myriad appointment types. Immediately behind each reception desk, support services such as appointment scheduling and front office medical support services are provided. Exam rooms line the corridors for the various services associated with the desk. Back office support services such as transcription and secretarial services lie just beyond.
Anywhere from one to over ten medical specialties are associated with each patient reception desk. Medical specialties and services are clustered from a facility needs perspective more than any relationship between specialties. For example Neurology and Internal Medicine patients report to one "desk", while Hematology/Oncology and Cardiology patients report to another.
Organizing services in this way gives the appearance of a crossfunctional, process oriented organization. A patient might assume that behind each "reception desk", there is one management ensuring that all medical care delivered from that "desk" is delivered with quality and efficiency. However, the picture from an internal perspective suggests otherwise.
In reality, each medical specialty was bound by its own vertical reporting structure with separate management for medical, front office, scheduling and back office staff. Each functional area reported to one of five administrators who reported to "the" administrator who reported to the CEO. In short, a complicated hierarchy, typical of many health care organizations.
The solution for this lack of process definition was realized when returning to the patient's vantage point. Using the current configuration of services, Mayo Clinic identified services produced from each desk location as a process. Reorganization is currently underway to align reporting structures for all medical and support services for each "desk" under one management team. Members of the management team, which include an operational administrator will be located on the same floor as the desk. A concurrent effort to simplify and flatten the management hierarchy is also underway.
The result of Mayo Clinic's effort is a multi-disciplinary approach to the organization of work and people that will provide a more flexible infrastructure. While this is a clear victory of process over function, whether Mayo Clinic will be able to bring about the radical changes that the marketplace demands will depend on how effectively they reengineer their processes.
As with other service industries, health care providers will increasingly compete within a global marketplace based on performance qualities such as access, responsiveness (speed), personal service, accuracy and, of course, cost.
Health care organizations previously characterized by bureaucracy, complexity and functional boundaries will need to create more flexible, customer focused enterprises that are change adaptive. To accomplish this, process definition guided by customer input, organizational goals and objectives will be a critical first step. A handful of processes rather than countless functions will lay the foundation for greater organizational learning and streamlined communication. Both will be necessary to carry the health care organizations from the stable environment of the past to the present world of constant change.
Jacquie Gentry has management experience in the manufacturing, service, health care and higher education industries spanning a fifteen year career in innovative management. She is currently Project Administrator for reengineering projects at Arizona State University. From 1989 to 1994 she held a number of management positions at Mayo Clinic Scottsdale where she played a key role in designing and implementing more effective and efficient medical service delivery processes. She also played multiple roles in Mayo's clinic-wide reengineering project in 1995. Ms. Gentry currently trains Arizona State University staff in reengineering methodology and has been featured as a guest speaker at both the local and national levels. Ms. Gentry can be contacted at JGENTRY@asuvm.inre.asu.edu
About Prosci. Prosci is a registered trademark of the
Quality Leadership Center, Inc. Copyright 1996-2003. All Rights Reserved.
Tutorial Series | Bookstore | Articles | Books | Benchmarking | Mailing lists | Yellow Pages
Register | Search Other Sites | Comments | Home Page