Aligning IT to provide optimum assistance

There are also new opportunities opening up in areas outside financing. No considerable rise in public financing is foreseeable at this time, but many municipal hospitals will be able to change their legal status, adopting a new corporate form that will include new entrepreneurial structures and changes in accounting requirements as well as access to capital markets.

Financing issues

A great many clinics in Germany have structural deficits that must be resolved if they are to remain viable, or become so, under the changing economic conditions. These deficits range from out-dated building structures (building materials, etc) to infrastructural deficits (e.g. lack of flexible structures, unsecured transportation routes, old supply roads and connections, lack of network infrastructure etc.) and absent or outdated equipment (IT, medical equipment, utility and building services systems, etc.).

In 2005, a national average of around ?5,500 in KHG funds was provided per hospital-plan bed, of which ?2,200 was issued in the form of flat-rate allowances.5 Yet the investment in building conversion, equipment and the IT necessary to adapt the existing infrastructure to meet current requirements is estimated at around e25,000-e50,000 per bed.6 Most of these needs consist of the investments that are required for successful reorganisation. Thus, effective process and work-flow management is unthinkable without an effective IT infrastructure or without at least partial automation, for example, of the administrative processes. By the same token, new medical technology makes it possible to increase the patient-turnover rate (i.e. reducing treatment times while maintaining or improving process quality),7 with the use of such equipment as more advanced computer tomographs or MRTs.

The pattern of expenditure in an average hospital reveals that around 70% of the overall budget goes to personnel costs while 22% goes to consumer goods, maintenance and external services. Only about 8% is reported as going towards investment, the better part of which is spent on construction with only a small fraction being spent on equipment (Fig. 1).

Fund-raising options

Figure 2 presents a general picture of where today’s hospitals draw their investment financing.

Hospitals that have an appropriate legal status and are able to manage their operations with relative independence can borrow money on the credit market. Since the hospitals owners (i.e. local governments) have good credit ratings, it should be possible to obtain such loans on reasonable terms. One important prerequisite, though, is that such a loan is guaranteed by the owner. However, in recent years, that prerequisite has been fulfilled less and less often. The default risks faced by banks are increasing10 particularly due to the creation of new legal forms.

With the introduction of BASEL II (Directives on capital adequacy), other credit analysis aspects exacerbate the situation, making it nearly impossible for many hospitals to obtain loans from financial institutions, as banks will no longer be able to subsidise poor risks with good risks.11 Often hospitals can only obtain the short-term credits they need for day-to-day operations (i.e. to safeguard liquidity) from the appropriate credit line under unfavourable terms or in insufficient amounts.

These trends and the cost distribution patterns reveal just how important Business Process Engineering (BPE) is for clinics in their struggle to survive.

Workflow support

Some of the trends and constraints described above have already triggered an organisational response. While personnel used to be classed into groups of physicians, patient care staff and administration (or general off-ward services) that were divided into different departments, now tertiary processes and detailed activity profiles are being adopted in German clinics (Fig. 3). Identifying these activity profiles and separating them from the core process, in conjunction with a concentration on that core process, can generate many opportunities for cost structure optimisation in accordance with management theory. There have been many cases in recent years of the outsourcing of certain activities to affiliate organisations within the same tax group.

The fact that hospitals have traditionally functioned as states within the state – that is, they have performed the entire range of their activities autonomously (from mechanical jobs to gardening and cooking) – meant that an interesting approach was immediately apparent to management: one, in particular, with the potential to reduce personnel costs. However, there were no contractors in the market who could reproduce the entire complexity of the range of activities at issue. Even today, such an approach usually requires the coordination of several different partners. So this outsourcing process was usually performed without taking existing interconnections or potential interconnections, in terms of synergies, into account. As a result, the process did not generate all the desired savings; and where it did do so, this was the logical consequence of cuts in personnel costs and was accompanied by substantial sacrifices in quality.

The question this poses is what can be achieved by contracting logistics out to an external provider when there has been no thorough process definition in the areas of purchasing or financial accounting, or, most importantly, with respect to customers or consumers? Take the example of a ward nurse who does not know when an order has been delivered or where it is. Communication failures associated with outsourcing lead to deterioration in the status quo relating to the performance of that nurse. But in addition, the situation also has an adverse psychological impact on the nurse that affects the quality of her work. In certain areas, attempts to optimise processes have been and are being made, at least with respect to the customer interface. One example of this is the use of web portals, which are now standard elements provided by the manufacturers of CAFM (should this be CFM) software. The intention is to give the customer the option of using a web screen to report such problems as a malfunction, or to check on the status of a repair job. Many people are already familiar with such mechanisms and interfaces from the on-line shopping they do in their personal lives. Such efforts yield a benefit for service providers, but for the customer, i.e. the nurse, they are viewed with more scepticism. Why? The reason is to do with the fact that the universally-desired effects of transparency and fast communication are viewed as distinct from the actual working process.

For a nurse, this essentially represents a new, additional programme that entails extra work. This type of change will only be accepted if it is integrated into the working process in such a way so as not to generate more work than was necessary before.

Such a measure will only generate a process improvement if it also serves as a substitute for old operations, because otherwise it will only lead to the creation of another process and have an effect opposite to the one intended. Therefore, basic parameters, such as login operations, security settings, integration in the facility’s IT structure, personalisation of data, ergonomics in the environment of everyday use (e.g. ward workflows), and optimisation of profile-based data transmission must also be taken into account.

In this context, the challenges often lie in the details. For example, how does customer notification in a track and trace process or an approval workflow actually take place? By e-mail? How often?

CFM software

A comprehensive approach was selected by a hospital for a most complex approach to service provision, which ultimately led to the establishment of Charité Facility Management (CFM), a system that absorbs 19 activity profiles (Fig. 5).

Realising the savings potential associated with this involved the consistent optimisation of process flows and, in particular, of information flows. A central help desk was established to serve as a strategic interface and a service portal is being set up to support the processes on site. The intention is that over a period of three years the structure of the service inquiries will be inverted: from the initial 10% via email/online and 90% over the telephone to precisely the opposite. In this way, various advantages are being combined: the specialised knowledge of the various experts that work in specific subsystems, and a standardisation of information flows (Fig. 6). Such information flows feature cumulative presentation via an appropriate interface (Fig. 7), and allow the transmission of relevant data to the facility’s ERP system (in this case SAP), thereby allowing dedicated cost allocation, for example, in a budget framework or, potentially, allocation to individual DRGs. In this way, CFM establishes a single point of contact and sets up a rationalised service via SLAs, which increases efficiency. Some successes were registered as early as the first year and savings targets were actually exceeded. In addition to personnel measures, the workflow mapping of the processes mentioned certainly made a major contribution to this.

Other projects are currently being carried out to eliminate remaining media disruptions and structure process chains in a consistent manner. Some aspects have the potential for direct support of the core processes as well as direct benefits for service provision; in particular, mobile data acquisition with RFID should be mentioned in this context.

Phase 1 of the project, which involves determining the costs and potential of RFID coverage for the whole area of CFM, in association with that of Charité, was scheduled to conclude in October 2007. In addition to classic subjects such as logistics and supply, other areas that would benefit from such coverage have also been identified. These include bed transport, medical technology (identification of mobile device locations), building and operational equipment (inspections), cleaning (automated billing for special areas), and waste disposal. Interest has also been registered in the area of direct patient care, particularly in neonatology (identification, eliminating danger of confusion), and in outpatient management for the gynaecological department. The combination of various types of sensor technology (infrared, ultrasound, WLAN, RFID) via a central integration middleware would also generate demonstrable added value for the hospital – prompted by needs associated with tertiary processes – even from a TCO standpoint. The combination of new technologies and enhancing service management structures to meet standards already well-established in the IT field can transform the hospital technology sector or tertiary processes in general. In the future this sector will play more than the role of the discreet support provider, and instead increasingly take on the role of an enabler, thus attaining a new, more central significance than just a few years ago.

References

(see bibliography below)

1 Busse, R. and Riesberg, A. (2004); p. 165.

2 Henke, K.D. and Reimers, L. (2005); p. 26f.

3 Blum, K. and Schilz, P. (2005); p. 28f.

4 ADMED/RWI in Augurzky, B. et al. (2004); p. 23.

5 DKG (2006); p. 54ff.

6 Vgl. Schmitz, R.M. (2004); p. 192ff.

7 Vgl. Schmidt, H. (2006) and Krukemeyer, M.G. (2003); S. 70.

8 Vgl. Blum, K. und Schilz, P. (2005); S. 5.

9 Vgl. Blum, K. und Schilz, P. (2005); S. 25

10 BfS (2002); p. 34f.

11 Jorns, A. (2006); p. 8.

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The content of this article was presented at the 2nd European Conference on Healthcare Engineering held in Vienna, Austria, in September. The event was hosted by the Austrian Association of Hospital Engineers (ÖKVT) in cooperation with other International Federation of Hospital Engineering – Europe associations including IHEEM.