FocusedOperationsManagementforHealthServicesOrgani.ppt

Focused Operations Management for Health Services Organizations Based on the book by Boaz Ronen Joseph Pliskin Shimeon Pass The Modern Health Care and Business Environment New managerial approaches are needed Why? Massive increases in health care costs Rapid changes in the business environment Transition from sellers’ market to buyers’ market What is a Sellers’ Market? Supplier or service provider largely dictates terms Customer is charged for full costs plus a reasonable profit Response time: We are doing our best Quality: We are doing our best Performance: We know what our customers need Today’s business market is more of a buyers’ market What is a Buyers’ Market? A buyers’ market is characterized by Globalization of the world economy Fierce competition Global excess capacities (production, services, etc.) New managerial approaches Access to data and knowledge Cheap and rapid communication Timely availability of materials and services A Buyers’ Market -- continued A buyers’ market is characterized by Ease of global travel and transport Advanced technologies for production Extensive use of advanced IT communications Shortened life cycles of products and services Customer empowerment A Buyers’ Market -- continued Price: Determined by the market Response time: Determined by response time of best in the market Quality: Determined by quality of best in the market Performance: Driven by customers The Health Care Market In health care today, demand for services is up while budgets are being reduced Customers know more Customers demand more Technology is developing rapidly Life expectancy is increasing Health Care Market: Recent History Scissors Diagram of Needs versus Budget U.S. Health Care Expenditures, 1990 and 2003 U.S. Health Care Expenditures, 1990 and 2003 Total expenditures in 1990 = $696 billion Total expenditures in 2003 = $1,679 billion CAGR = compound annual growth rate Overall CAGR from 1990 to 2003 = 7.0% T