What Hospitals Can Learn From Amazon, Southwest Airlines And Disney

By Rich Krueger, Chief Executive Officer, Hospital IQ

Achieving operational efficiency is as important to a hospital’s mission of providing the best care to the most people as it is to for-profit, customer-centric service organizations. Southwest Airlines, Amazon, and Walt Disney theme parks may seem as far removed from healthcare as one can imagine but, operationally, the tools, motivations, and management processes they incorporate are similar and have proven effective when applied to healthcare. Yet, even at some of the best-run hospitals, just a few understand and fully leverage these tools and procedures to optimize their operations.

The similarities are not in the products or services these companies offer, how they train employees, or how they work in the community. The parallels exist in their use of ‘tried and true’ management science to improve the customer experience and optimize resources to serve their constituents best.

Ingrained in these companies’ cultures and decision-making processes are data science and machine learning technologies. Regardless of the operational decisions — which may range from how best to route airplanes when a hurricane is imminent to planning the size and location of a new warehouse — the technologies used can improve customer access and experience by forecasting future performance and resource needs.

Track And Strive For Operational Goals

Airlines, hotels, theme parks, and restaurants all use sophisticated management and capacity-planning tools to improve the customer experience. These tools help them balance aggressive financial objectives while tracking to productivity and service goals. Hospitals need only look to these industries for strategies to improve the efficiency of their own day-to-day operations.

In healthcare, planning for scheduled and unscheduled demand, changing processes, or adding new services without understanding the impact on the OR, ED, staff, and inpatient beds can limit or even reduce patient access, lower quality of care, and result in negative financial consequences. Other changes that generate a negative ripple effect throughout the organization include things like expanding cardiac care without adding ICU beds, which might increase ED boarding. Cutting environmental services staff hours can affect OR and bed utilization.

Several years ago, I met with a CEO of a large hospital who was overseeing a substantial construction project. The hospital was operating at 100 percent capacity and, at the time, had 20 boarders in the ED. The project would add ORs without addressing the existing issue of boarders. What struck me was the plan to expand services was made in a vacuum. More ORs means more boarders, and the hospital had not yet dealt with the boarders it already had. The new project would actually increase the operational challenges faced on a daily basis, with the potential to decrease access, service, and profitability. There simply was not a plan for the boarders.

However, it does not have to be this way.

Better Planning For Future Activity Requires Insight

Mitigating the negative impact of operational changes requires matching capacity with demand without sacrificing customer service, or in the case of healthcare, access and quality of patient care.

For example, a restaurant can use historical and current data to forecast staff, food and beverage resources, and table availability. A restaurant manager can easily determine what is needed when — spikes in demand are predicted based on their modelling tools or planned events like an unusually large private event. Hospitals deal with similar pressures. Administrators must balance demand with key resources (e.g., beds, staff, ORs, diagnostic equipment) to ensure maximum access to quality care.

Predictive and prescriptive analytics technologies allow hospitals to increase procedural volume, predict patient flow, and provide a holistic view of hospital operations to quickly and easily identify where inefficiencies exist or will form. These technologies can help hospitals improve OR utilization, predict and mitigate issues like ED surges, and develop more effective staffing plans. Analytics can also help providers identify trends, manage demand variations, and support capacity-planning exercises. This comprehensive bird’s eye view helps administrators understand the upstream and downstream implications of departmental changes before they are implemented.

Leveraging Analytics To Drive Operational Best Practices And Deliver Outstanding Patient Care

Other industries have created successful resource management schemes that account for both scheduled and unscheduled demand to improve service to well-informed and demanding clientele. They understand the interconnectedness of all operations and their impact on the overall business performance.

For example, offering discounts to increase traffic flow or reservations without adjusting resources can lead to overcrowding, long lines, extended wait times, or limited access to a service (restaurant seating, hotel booking, etc.). Theme parks know precisely the maximum wait time customers will tolerate for a ride, restaurants know how losing a server for a shift impacts table turnover and customer experience, and airlines know flying at less than full capacity significantly reduces revenue. However, the annoyance of rescheduling a flight, rebooking a hotel reservation, or forgoing a meal pales in comparison to the potential grave outcomes that mismanaged access to medical care can create.

Operational best practices from other service industries are proven blueprints for the healthcare industry. Administers can reference them to establish their own operational success. Sophisticated data analytics can support one’s intuition and experience while removing guesswork, hunches, or back-of-the-envelope calculations from the operational decision tree, much as it does for other service businesses.

Today, new healthcare technology brings data to life and makes it useful for meaningful planning and forecasting. Advanced platforms synthesize and analyze all available data, as well as provide predictive and prescriptive insights while removing the inefficiency of trial and error.

While most hospital administrators pay attention to margins, regulatory changes, and resource allocations, many have not found the right place to begin addressing the key operational efficiencies required to achieve the financial performance needed to deliver on their mission. By taking cues from other industries, providers can leverage technology to effectively run their organizations holistically, and trust that critical operational decisions are grounded in proven, trusted data. And in so doing, hospitals can grow their volume while better managing their bottom line, allowing them to execute flawlessly against their mission to provide outstanding patient care within their communities.