INDUSTRIAL ENGINEERING APPLICATIONS IN HEALTH CARE SYSTEMS:APPLICATION OF OTHER INDUSTRIAL ENGINEERING TECHNIQUES

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APPLICATION OF OTHER INDUSTRIAL ENGINEERING TECHNIQUES

The application of other industrial engineering techniques such as forecasting, inventory control, materials management, facilities planning, economic analysis, and cost control is also common in health care systems. Examples of many of these applications are available in the proceedings of the annual Quest for Productivity and Productivity Conferences of the Society for Health Systems and the Healthcare Information and Management Systems Society Conferences. See also Journal of the Society for Health Systems (1992a), and Sahney (1993) on the use of industrial engineering tools in health care.

FUTURE TRENDS

Most healthcare systems around the country are facing serious financial problems due to the reduc- tions in Medicare and Medicaid reimbursements. Health maintenance organizations (HMOs) have also reduced payments to health systems for services due to reductions in health care premiums forced by competition from other HMOs and by employers looking for cost reductions in their own organizations. Health care institutions are looking for ways to reduce costs while maintaining or improving quality. Industrial engineers are being asked to conduct benchmarking studies to identify areas where costs are higher than the norm and need reduction.

The financial problems are also leading to mergers and takeovers of financially troubled hospitals by health care systems in better financial health. Industrial engineers are being asked to work with individuals from finance on projects related to mergers and consolidation of services to evaluate the financial impact of alternative courses of action.

Many health care systems have undertaken TQM programs that include training of managers and supervisors in quality improvement tools such as flowcharts, cause–effect diagrams, run charts, and control charts. Quality improvement teams (QITs) consisting of employees from the departments in which the process resides are now conducting many of the studies previously conducted by industrial engineers. Industrial engineers are being asked to serve on these teams as facilitators or in staff capacity to conduct quantitative analysis of the alternatives.

Although simulation tools have been available to health care systems for decades, it is only recently that simulation models have been increasingly used as tools to model real systems to predict the impact of various policies and resource levels. Administrators and department managers are aware of the capabilities of these models and are requesting the use of simulation models to make sound decisions. The availability of reasonably priced, user-friendly simulation packages has increased the use of simulation modeling. The same is true for advance statistical tools. With the availability of user-friendly statistical software, more sophisticated statistical models are being built to guide in decision making.

Another area gaining attention is supply chain management. As health care systems are looking for ways to reduce costs without impacting the quality of patient care, procurement of supplies has stood out as an area where substantial reductions can be achieved through supply chain management. Some hospitals are having some of their supplies shipped directly from manufacturers to the user departments, bypassing all the intermediate suppliers and distributors. Other hospitals have eliminated their warehouses and distribution centers, giving the responsibility for daily deliveries and restocking of departments to external vendors. Industrial engineers are evaluating the alternative courses of action in supply chain management.

Industrial engineers are also working for consulting companies contracted by health care systems to assist them out of financial problems. The use of sophisticated industrial engineering tools in health care still lags behind the use in manufacturing industry. Over the next decade, it is expected that the use of these tools will become more prevalent in health care.

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