PLAN OF PRESENTATION
• Definitions and concepts of management
• Relevance to health
• Traditional vs modern management tech.
• Description of each technique
• Challenges in management
• What is Management? “Management is
getting the right things done
– In right way,
– In right time,
– By right persons
– With right amount of resources and effective use of
• It is the efficient use of resources and to get
people to work harmoniously together in order
to achieve objective. ( WHO)
EFFICIENCY AND EFFECTIVENESS
Term Modern: It is a basic principle of good management to
choose methods to suits whatever resources available and to use
them in pursuit of well-chosen objectives.
“Health System Management : is defined as purposeful & efficient
use of health system resources and to get members of the health
team coordinated to work harmoniously in order to achieve the
desired common Goals and Objectives.”
Importance of management in health
Human Resource management
Relevance of modern management
technique in health
Overlapping, conflicting and competing organizations
within Health system.
Widely scattered funding mechanism with little control
Decisions on the mixture of facilities and services
without reference to population need and with no
information about those who do not use the services.
Emerged in the last few decades, since world war II.
These make increasing use of mathematical and
statistical concepts and methods.
These are the quantitative & semi-quantitative
methods which are fruitfully employed in management
of business, defense, industry and health.
It has been proved that these techniques useful in
increasing the efficiency by cost reduction as well as
ensuring better health care
Traditional vs Modern management tech.
Traditional : based on behavioural sciences eg.
Personnel selection, training & retraining, motivational
methods, leadership development, supervision etc.
Modern : based on sociology, psychology, social
psychology, educational technology, economics and
Modern management technique
• Time trends & forecasting
• Decision theory and tree
• Time motion studies
• Work sampling and activity
• Queuing theory
• Gantt chart & work
• Simulation study/models
• Systems analysis
• Linear programming
• Inventory control
• Network analysis
• PERT & PEP
Modern management techniques
• Monitoring expenditure
• Cost accounting & analysis
• Cost benefit analysis
• Cost effectiveness analysis
• Performance budget
• Zero base budgeting
• Input output analysis
• Outcome budget
• Management by objective
& appraisal by results
• Management by exception
• Situational analysis
• Current state assessment
• SWOT analysis
• Log frame analysis
1. Time–trends and forecasting : based on information
on occurrence of certain events, certain patterns can be
recognized eg. 1. Secular trend – increasing
incidence of CHD, accidents and cancers etc. 2.
seasonal variations of gastro-enteritis.
• Based on past experience, predictions can be made
about the expected occurrence, by using mathematical
methods eg. Demographers made projections about
population, epidemiologists anticipation of epidemic
2. Decision theory and decision tree :
• A methods for determining the optimal course of action
when a number of alternatives are available and their
consequences cannot be forecast with certainty
• Uses probabilistic analysis to help in the selection of
Types of environment:
1. Decision making under certainty
– Future “states of nature” are known
– Will choose the alternative that has the
highest payoff (or the smallest loss)
2. Decision making under uncertainty
– Future “states of nature” are uncertain
– Depends on the degree of decision maker’s
3. Decision making under risk
• It is a decision support tool that uses a tree-like graph of
decisions and their possible consequences ( including
chance event outcomes, resource costs, and utility)
• Commonly used in operations research, specifically
in decision analysis, to help identify a strategy most
likely to reach a goal.
• It enables people to decompose a large complex
decision problem into several smaller problems
• Symptomatic patient:
• If disease present at surgery, must decide whether
try for cure or palliate
• Want to evaluate surgery vs. medical
Constructing a decision tree
Three types of nodes:
1. Decision node -
2. Chance node -
3. End node -
• only splitting paths no converging path
• Decision theory (DT) represents a generalized
approach to decision making
• Decision making is an integral part of
– The decision maker selects one strategy (course of
action) over others depending on some criteria, like
utility, sales, cost or rate of return.
– Is used whenever an organization or an individual
faces a problem of decision making or dissatisfied
with the existing decisions or when alternative
selection is specified
Solution steps to any decision
1. Identify the problem
2. Specify objectives and the decision
criteria for choosing a solution
3. Develop alternatives
4. Analyze and compare alternatives
5. Select the best alternative
6. Implement the chosen alternative
7. Verify that desired results are achieved
Advantages of decision trees
• Are simple to understand and interpret
• Useful to analyze the possible outcomes of
• Possible scenarios can be added
• Most rational decision is taken in terms of
resource and effectiveness.
• Worst, best and expected values can be
determined for different scenarios
• For example : to study alternative health strategies
in disease screening, immunization etc.
ACTIVITY ANALYSIS TECHNIQUE
1. Time motion studies : it consists of observing and timing
by using stopwatches the physical work & movements carried
out by worker.
• 1) a complex task is broken into small & simple steps,
• 2) the sequence of movements taken by the employee in
performing those steps is carefully observed and analyzed to
detect & eliminate redundant and wasteful motion,
• 3) precise time taken for each correct movement is measured.
• Reduction of physical effort
• Time saving and
• Increase productivity
• Eg. From each ward lab samples used to sent with a servant to
central path lab. Servants take excessive time to return.
• Modification :- one servant from the central lab goes to
different ward with trolley at predetermined time. Reports
delivered in same way
2. WORK SAMPLING AND ACTIVITY ANALYSIS
Work sampling : is a commonly used industrial engineering
technique designed to measure how resources such as people,
machines, facilities, or equipments are utilized.
• The method consist of making observation at random for
appropriate length of time and recording the utilization of
equipment or activities of a people during these periods.
• sample statistical method total activity
• Work sampling is used to estimate the proportion of workers'
time that is devoted to different elements of work activity.
• The idle time of machines and equipment can be calculated
• Observed activities are grouped into either of two main
classifications: working or nonworking.
• The working classification can be subdivided into
desirable or undesirable.
• work sampling is a low cost alternative to continuous
monitoring, just as sampling in the audit context is a
low cost alternative to 100 percent evaluation of an
• Better and proper utilization of time
• Example: Observations among nurses :
21 % of time spent on bed side
nursing.33 % of time spent on clerical
activities in the ward
• PHC staff: 15 % of time on direct
services, 34 % on administration, 21 %
on travel, 30 % on non productive
3. Queuing Theory
Queuing theory is basically a mathematical approach applied to the
analysis of waiting lines.
eg. emergency room, OPD setting, pharmacy, for emergency and
disaster management preparedness etc.
Goal of queuing analysis: to minimize costs
Costs of waiting lines or queue:
1. Cost associated with patients having to wait for service
Loss of business to HCO
Costs incurred by society
Decreased patient satisfaction and quality of care
2. Cost of providing the services (capacity cost)
Salaries paid to employees.
Salaries paid to employees or servers while they wait for
service from other server, for eg. waiting for the pathology
report, radiology report, labs, etc.
Fixed costs – cost of waiting space, facilities, equipments, and
• It is extremely useful in predicting and evaluating performance
• Excessive queuing can quickly erode customer loyalty.
• How to minimize the time spent by customers standing in a
• What is the trade-off between the time customers spend queuing
and the cost of additional capital to reduce queuing times?
Answer is Queuing analysis
• Queuing theory involves the analysis of what is known as a
queuing system, which is composed of a server; a stream of
customers, who demand service; and a queue, or line of
customers waiting to be served
• Arrival Process
– The probability density distribution that determines the customer
arrivals in the system.
• Service Process
– The probability density distribution that determines the customer service
times in the system.
• Number of Servers
– Number of servers available to service the customers.
• Number of Channels
– Single channel
– Multi channels
• Number of Phases/Stages
– Single Queue
– Series or Tandem
– Cyclic -Network
• Queue Discipline -Selection for Service
– First com first served (FCFS or FIFO)
– Last in First out (LIFO)
Assessing the parameters
• Customer arrival rate
– The number of customers entering the system per
• Customer service rate
– The number of customers the system serves per unit
• Average number of customers in the system
– The number of customers either waiting in queue or
• Average delay per customer
– The time a customer spends waiting plus the service
• Example: the average number of customers (N) can be
determined from the following equation:
• N= T
• lambda - is the average customer arrival rate and
• T - is the average service time for a customer.
• Let N = the number of people seated (say 200)
• Let T = mean amount of time a person stays seated (say 90 min)
– Avg . Customer arrival rate = 200/90 = 2.22 persons per minute
• Wait time
– If 100 people are waiting, you could estimate that you will need to wait
100/2.22 = 45 min
4. Gantt Chart
A Gantt chart is a graphical representation of the
duration of tasks against the progression of time.
It is a type of bar chart that illustrates a project
schedule. allow to assess how long a project
Gantt charts monitor progress.
It can immediately see what should have been
achieved at a point in time.
Gantt charts allow to see how remedial action
may bring the project back on course.
How to make Gantt chart
• Can be created with simple tools like Excel, but
specialised tools like Microsoft Project make it easier
• Step 1 – list the tasks in the project
• Step 2 – add task durations
• Step 3 – add dependencies (which tasks cannot start
before another task finishes)
• Step 4 – lay out all of the bars on the graph
Choose research area
Decide research topic
Fig. Simple research project Gantt chart
– The bar in each row identifies the corresponding task
– The horizontal position of the bar identifies start and end times
of the task
– Bar length represents the duration of the task
– Task durations can be compared easily
– Good for allocating resources and re-scheduling
– Precedence relationships can be represented using arrows
– Critical activities are usually highlighted
– Slack times are represented using bars with doted lines
– The bar of each activity begins at the activity earliest start time
– The bar of each activity ends at the activity latest finish time
Good visual communication to others
Task durations can be compared easily
Good for scheduling resources
Dependencies are more difficult to visualise
Minor changes in data can cause major changes in the
1. Simulation Studies/Model
• Use of mathematical models to calculate
results by means of simulation of a real
• Impact of inputs and changes on the output
can also be estimated
• Objective : to forecast the probable effects of
measures in terms of relative cost and benefit.
2. Systems Analysis
• System : An
arrangement and set of
multiple parts functioning
as a whole.
• Systems Analysis: Study
of inter relationships
operating in the various
components within a
system and also between
a system and other
• Systems: Hospital,
• Set of objectives to be achieved is
defined and alternatives to achieve
these is formulated.
• Alternatives are evaluated in terms of
• Mathematical models may be used.
3. Linear Programming
Components of a system and its constraints are depicted
In a linear equation and the desirable combination of
With regard to certain given set of objectives and constraints
is arrived at.
linear programming (LP) problems are optimization
in which the objective function and the constraints are all
• It is a useful tool for deciding the course of action for a
problem in which there are competing alternatives uses
for limited resources.
4. Inventory Control
• Method of
maintaining of stock
at a level at which
storing costs are the
If drugs purchased in large quantity
Adv: the risk of out of stock avoided
locking up money in maintaining huge stock
large storage space
require staff to store and handle various items
chances of expiry, pilferage
Objective : maintaining optimum stock
ANNUAL COSTANNUAL COST
ITEMITEM COST %COST %ITEM %ITEM %
70 %70 %
20 %20 %
10 %10 %
10 %10 %
20 %20 %
70 %70 %
• A items : small in no. , but consume large
amount of resources
• Must have
• Tight control
• Rigid estimate of requirement
• Strict & closer watch
• Low safety stock
• Managed by top management
• C items : larger in no. but consume lesser
amount of resources
• Must have
• Ordinary control measures
• Purchase based on usage estimates
• High safety stocks
VED Analysis : based on criticality in pt. care
• VED Analysis V=10% E=39%
• V =Vital life saving drugs. Absence of
which cannot be tolerated.
• E= Essential items. Absence can be
tolerated for a short time period.
• D=Desirable. Non availability can be
tolerated for a longer period.
Combination of ABC &VED Analysis
V E D
A AV AE AD CAT I
B BV BE BD CAT II
C CV CE CD CAT III
Cat 1 : needs close monitoring & control
Cat 2 : moderate control
Cat 3 : no need for control
Based on availability
Managed by top level management
Maintain big safety stocks
Maintain sufficient safety stocks
Minimum safety stocks
Based on utilization.
Non-moving items must be periodically
reviewed to prevent expiry
5. Network analysis
A technique whereby objectives are identified,
activities and tasks involved in attaining the objectives
are determined and their interrelationships are
presented graphically in the form of network and used
as a basis of determining sequence of activities and
allocation of resources.
Planning and monitoring the progress of large no. of
different interrelated activities necessary for the
completion of project with minimum time & cost.
Simple to understand
Well defined in practical terms
Applies to any project where activities can be
Does not need very highly qualified
PERT• Programme Evaluation Review Technique : Shows diagrammatically
the logical sequence in which different events between the start
and end of the project need to take place
installed Start providing
• PERT involves planning, monitoring and controlling of
projects where time taken for each activity in the project is
• PERT is classically used in long-term projects like
construction of hospitals, ships, roadways and buildings, in
planning & launching of new health programs, products &
services, in publication of books etc where exact time for
each phase is not known with certainty.
• PERT uses probabilistic and linear programming methods
to assist a manager in planning schedules & costs,
determining time & cost status, forecasting skill
• Under PERT, three time-estimates are made,
1. Most Likely Time is the time taken most frequently in
completing a particular activity.
2. Optimistic Time is time in which an activity can be
completed, if all goes as per the pre-determined plan.
3. Pessimistic Time is the time taken to complete an
activity under most adverse conditions. This is thus
the longest possible time taken to complete a project.
• Calculation of activity time
Time= Optimistic time + 4 X( likely expected time)+Pessimistic
50 % chance (Probability of correct estimate of time)
• Advantages of PERT
Aids in planning,
scheduling and monitoring
Provision for better
Furnishes continuous timely
Enables evaluation and
• Disadvantage of
time & almost no
attention to cost
Critical Path Method (CPM)
• Longest path in the method.
• The process cannot end before the critical pathway
• Reduction in time of a project is only possible
if there is a reduction in the time taken the
• Reduction in time may be brought about by
increase in the resources keeping cost factor
EMERGING CHALLENGES FOR
• Globalilization: Managers need to think globally and act locally.
• Technology: Management will need to manage changing
• Quality: Quality assurance is getting important.
• Social responsibility: Management will pursue long term goals that
are good for society.
• Empowerment: To empower worker is a challenge to management.
• Human resource management: Management needs to deal with
diversified work force, requires visionary leadership on the part of
• Organization design: Organization will be lean flat and less
• Modern management methods and organization
of health services. WHO.pdf
• Park’s Textbook of Preventive and social
Medicine. 22nd ed.
• P. V. Sathe’s textbook of Epidemiology and
management for health care for all. 3rd edition
• Reetu Mehandiratta. Applications of queuing
theory in health care. IJCBR. May 2011. VOL2