Critical Access Hospital Goal Setting Provided By The Nat.docx

Critical Access Hospital Goal Setting
Provided By:
The National Learning Consortium (NLC)
Developed By:
Health Information Technology Research Center (HITRC)
Key Health Alliance, Regional Extension Assistance Center for
HIT
http://www.HealthIT.gov
National Learning Consortium
• The National Learning Consortium (NLC) is a virtual and
evolving body of knowledge and resources designed to
support healthcare providers and health IT professionals
working towards the implementation, adoption and
meaningful use of certified EHR systems.
• The NLC represents the collective EHR implementation
experiences and knowledge gained directly from the field
of ONC’s outreach programs (REC, Beacon, State HIE) and
through the Health Information Technology Research
Center (HITRC) Communities of Practice (CoPs).
• The following resource can be used in support of the EHR
Implementation Lifecycle. It is recommended by
“boots-on-the-ground” professionals for use by others who have
made the commitment to implement or upgrade to
certified EHR systems.

EHR Implementation Lifecycle
The material in this document was developed by Regional
Extension Center staff in the performance of technical support
and EHR implementation. The
information in this document is not intended to serve as legal
advice nor should it substitute for legal counsel. Users are
encouraged to seek additional detailed
technical guidance to supplement the information contained
within. The REC staff developed these materials based on the
technology and law that were in
place at the time this document was developed. Therefore,
advances in technology and/or changes to the law subsequent to
that date may not have been
incorporated into this material.
September 30, 2013 • Version 1.0
www.HealthIT.gov
1
http://www.healthit.gov/providers-professionals/regional-
extension-centers-recs
http://www.healthit.gov/providers-professionals/beacon-
community-centers
http://www.healthit.gov/policy-researchers-implementers/state-
health-information-exchange
http://healthit.hhs.gov/portal/server.pt/community/healthit_hhs_
gov__rec_program/1495
http://healthit.hhs.gov/portal/server.pt/community/healthit_hhs_
gov__rec_program/1495
http://www.healthit.gov/providers-professionals/ehr-
implementation-steps
http://www.HealthIT.gov

www.HealthIT.gov
2
Description & Instructions
• The Critical Access Hospital Goal Setting guide is intended to
aid providers
and health IT implementers with Planning, Selecting,
Implementing, and
Achieving Meaningful Use. It can be used to determine what
goals are, how
they should be set, and how they should be measured.
• This resource includes goal setting tools and tips.
www.HealthIT.gov
Goals
• Goals play an important part of many of the aspects of
planning, selecting,
implementing, and realizing benefits of HIT
• Help educate about what is possible with an EHR
• Initiate change management by recognizing need for
improvement
• Aid implementation planning, customization, testing and
planning
• Establish expectations for successful adoption and optimal use
• Support benchmarking and interoperating across continuum of

care
3
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SMART Goals
• Specific
• Measurable
• Attainable
• Realistic
• Timely & Tangible
4
www.HealthIT.gov
Specific
• Who
• What
• Where
• When
• Why
Goals not only need to be Significant enough to make the
investment in achieving the
goal but Stretching for the organization to push itself to
continuously strive for

improvement.
5
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Measurable
• How much
• How many
“If you can’t measure it, you can’t Manage it”
To be measurable, goals must contain specific Metrics, be
Meaningful, and
Motivational.
6
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Attainable & Agreed Upon
• Consensus on Acceptable goals and commitment to Achieving
the goals
is critical.
7

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Realistic, Relevant, Reasonable, Rewarding,
and Result-oriented
• Goals must reflect:
– Availability of resources, knowledge and time
Set the bar high enough to be meaningful in light of the
investment made to Reach
the results.
8
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Timely & Tangible/Track-able
• Short term
• Long term
If a goal is achieved within the timeframe established, celebrate
it. If not
accomplished, carry out an analysis of why it has not been
achieved.
9

www.HealthIT.gov
Example
• Goal for a transcription scenario: Utilize structured data
collection templates
to reduce transcription expense by 30% within three months,
60% within six
months, and 85% within one year of adopting EHR, and support
clinical
decision alerts and reminders
10
www.HealthIT.gov
SMART Goal Setting Tool
Goal Elements Sample Scenario Example
Specific Reduce provider transcription
expense
Measurable By 30% / by 60% / by 85%

Achievable Using structured data collection
templates
Realistic With one-on-one end user support
Time-based within 3 months/ within 6 months / within
1 year
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www.HealthIT.gov
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Current Processes
Current Processes EHR Benefits Metrics
1. Appointment scheduling,
diagnostic studies
scheduling, insurance
verification, chart prep.
-Reduce /eliminate filing
- Collect co-pays
- Institute financial
counseling
# FTE pulling/filing charts
# FTE prepping charts
# A/R days
$ in collections

2. Patient check in
3. Patient intake and
documentation of vitals,
history, etc
- Improve patient care
- Match skills to task
- Patient satisfaction
# missed entries
# processes repeated
% satisfaction on survey
4. Review results (incl. images),
other encounter data, other
provider & patient-supplied
data
- Patient safety
- Complete documentation
- Reduce repeat visits/tests
Quality indicators
Improved contracting
$ profit in managed care
5. Clinical documentation of
history and physical exam,
encounter notes
- Improve patient care
- Reduce time and effort to
enter history data
- Reduce transcription
expense
- Complete documentation

Quality indicators
$ in transcription expense
Provider productivity
6. Medication management, including samples,
renewals/ mail order pharmacies
www.HealthIT.gov
Key Clinic Processes
Key Clinic Processes General Benefits Baseline Metrics
S.M.A.R.T. Goals
1. Pre-visit Reduce patient wait
time
75% of patients wait > 15
min. for staff to find missing
lab work
Reduce wait time to less
than 10 min. for 100% of
patients by having lab
results automatically
delivered to EHR
2. Check-in
3. Patient intake
4. Medication reconciliation

5. Prevention screening
6. Physician chart review
7. H&P documentation
8. Assess & plan documentation
9. Staff tasking
13
Critical Access Hospital Goal SettingNational Learning
ConsortiumDescription & InstructionsGoalsSMART
GoalsSpecificMeasurableAttainable & Agreed UponRealistic,
Relevant, Reasonable, Rewarding, and Result-orientedTimely &
Tangible/Track-ableExampleSMART Goal Setting ToolCurrent
ProcessesKey Clinic ProcessesAccessibility ReportFilename:
ONC_NLC_CriticalAccessHospGoals.pdfReport created by: Rae
Benedetto, Accessibility and Remediation Specialist,
[email protected]Organization: Manila Consulting Group
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Part 3 - needs to be much more indepth - need full paragraphs
and research/citations
Part 4 - more indepth and related to your project goals and
activities
SMART goals you are not understanding this concept - it is not
about the word smart but the structure - see example below.
You need at least 3 SMART goals.
S.M.A.R.T. Goals
· Specific – clearly state what you want to accomplish
· Measurable – determine how you will evaluate success with
the goal
· Attainable – challenging goals but achievable
· Relevant – the goal is relevant to your topic
· Time based – target dates for the goal
Example of a SMART goal: By August 30, 2019 at least 10%
of employees will have received education about the new MRI
machine.
· Then develop activities that will help achieve the goal.
· Then determine how the activity results will be evaluated.
10/17/2018 Healthcare Operations Management, Second Edition
https://tempolearning.brightspace.com/d2l/le/content/6954/view
Content/7207/View 1/34
PRINTED BY: [email protected] Printing is for personal,
private use only. No part of this book may be reproduced or
transmitted without publisher's prior permission. Violators will
be prosecuted.

be prosecuted.
be prosecuted.
be prosecuted.

PRINTED BY: [email protected]aldenu.edu. Printing is for
personal, private use only. No part of this book may be
reproduced or
be prosecuted.
be prosecuted.
be prosecuted.

be prosecuted.
be prosecuted.
be prosecuted.

10/17/2018 Book Excerpt: Quantitative Methods in Health Care
Management - OM007: Project Management
private use only. No part of
this book may be reproduced or transmitted without publisher's
prior permission. Violators will be prosecuted.
325
326
CHAPTER 13 Project Management
Learning Objectives
▪ Describe the need for project management and its use for
administrative and clinical

operations.
▪ Review the information sources for project management in
various health services
operations.
▪ Evaluate projects with PERT/CPM techniques.
▪ Recognize risk in project completion, and develop
probabilistic methods.
▪ Describe the concept of project compression.
▪ Evaluate the cost/benefit of project compression.
Health care managers typically oversee a variety of operations
intended to deliver health
services. Besides those, health care managers may work on
projects that are unique and
nonroutine, designed to accomplish a specified set of objectives
in a limited time. Projects
can be viewed as temporary endeavors undertaken to create new
products and services
(Klastorin, 2004; p. 3). Typical examples of such nonroutine
projects are moving a hospital
to a new location by a certain date or renovating an outpatient
facility to meet changing
demand patterns. Projects like these have considerable costs.

They involve a large number
of activities that must be carefully planned and coordinated to
achieve the desired results,
and may take a long time to complete (Stevenson, 2002; pp.
766–767 and Kerzner, 2004; pp.
179–180).
327
https://jigsaw.vitalsource.com/books/9780470902004/epub/OPS/
loc_017.xhtml#eid8060
Project management is an approach for handling these unique,
one‐time endeavors that
may have long or short time horizons, significant costs, and
significant effects on the

organization's operation. Since these projects include many
separate activities, planning
and coordination are essential to complete them on time, within
cost constraints, and with a
high quality result.
Most projects are expected to be completed within time, cost,
and performance guidelines,
meaning that goals must be established and priorities set. Tasks
must be identified and time
estimates made. Resource requirements for the entire project
have to be projected. Budgets
have to be prepared. Once under way, progress must be
monitored to make sure that project
goals and objectives are met. Through the project approach, the
organization focuses
attention and concentrates efforts on accomplishing a narrow set
of objectives within a
limited time and budget.
Project management can be handled by assigning existing staff
to the project for its
duration. However, problems arise if the project manager lacks
expertise or continues to
have responsibility for other assignments, and also later when
the individual or team must

be reintegrated into routine operations. For these and other
reasons, often independent
consultants are hired to take over project management for the
health care providers.
Whether projects are managed internally or externally, however,
it is still important for the
managers in health care organizations to understand project
management concepts, in
order to successfully manage internal projects and to understand
the information presented
to them by outside consultants.
The Characteristics of Projects
Projects have phases: planning, execution of planned activities,
and phase‐out. Those phases
are known as a project's life cycle, and typically consist of four
stages:
1. Formulation and Analysis: The organization recognizes the
need for a project (for
example, the need to replace a health care facility with a more
modern one) or
responds to a request for a proposal from a potential customer
or client (for example,
expanding health care services to secure a new third‐party
contract). The expected

costs, benefits, and risks of undertaking the project must be
analyzed at this stage.
2. Planning: At this stage, details of how the work will flow are
hammered out and
estimates are made of necessary human resources, time, and
cost.
3. Implementation: The project is undertaken; most of the time
and resources for a project
are consumed at this stage.
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328
4. Termination: The project is completed; tasks include
reassigning personnel and dealing
with leftover and excess materials and equipment.
During the project's life cycle, a project brings together people
with expertise and diverse
skills, who each become associated with only a portion of the
project, rather than

its full scope. Their involvement relates to their specialized
skills. To manage these diverse,
skilled personnel is a challenge that is the responsibility of the
project manager.
The Project Manager
The central figure in a project is the project manager, who bears
the ultimate responsibility
for its organization and completion. A project manager must be
able to communicate
effectively among project team members and coordinate their
activities to accomplish the
objectives.
Once the project is underway, the project manager oversees a
range of support activities.

Both time constraints and costs must be managed so that the
project is completed within the
projected time frame and budget. Open channels of
communication must be maintained so
that everybody has the information they need to do their work.
The quality of the work
done must be assessed constantly to ensure that performance
objectives are realized.
Workflow must be managed so that activities are accomplished
in the necessary sequence.
Meanwhile, the project manager must also communicate with
external constituencies such
as regulatory boards, potential patients, subcontractors, and so
on. Finally, it is important to
direct and motivate the diverse people working on the project,
as well as coordinate their
activities (Stevenson, 2002; p. 769).
Managing Teams and Relationships on Projects
A project manager's job has its share of headaches as well as
rewards. Personnel who are
loyal to their bosses in their own functional areas have to be
motivated by the project
manager towards the project's unique goals. Since the team
members report both to the

project manager and to their functional bosses, the task of
managing personnel with two or
more bosses can be challenging indeed, especially with the
dynamic and intelligent
workforce in health care. Supervisors often are reluctant to
allow their employees to
interrupt their normal responsibilities to work on a project
because their absence
necessitates training replacements. Training costs may be
incurred for a replacement who
will work only over the project's life span, until the incumbent
employee returns. In any
case, supervisors are reluctant to lose the output of valuable
employees. The employees
themselves are not always eager to participate in projects
because of the potential strains of
working under two bosses in a matrix type of organization.
From the employee's
perspective, working on a project may disrupt daily routines and
personal relationships. It
also raises a risk of being replaced in the original position.
328
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Another potential strain arises from the fact that the personnel
who work on a project
frequently possess specialized clinical knowledge and skills that
the project manager lacks.
Yet, the project manager is expected to guide their efforts and
evaluate their performance.
Apart from all these particular challenges, the environment in
which project managers in
health care facilities work is constantly changing and filled with
uncertainties, in spite of
which they must meet budgets and time constraints.
A project manager can, however, anticipate important rewards
from adapting to and
overcoming the unique challenges of the job: the career benefits
of being associated

with a successful project and the personal satisfaction of seeing
it through to its conclusion.
Many people embrace the dynamic environment of a project as a
welcome diversion from
routine tasks. They welcome the challenge of working under
pressure and solving new
problems. Projects may also present opportunities to meet new
people and increase future
job opportunities through networking. Project participants can
point to a successful project
as a source of status among their fellow workers. Finally,
projects frequently generate a
team spirit that increases the satisfaction of achieving project
goals (Stevenson, 2002 pp.
770–772).
Although project managers aim to have smooth operations,
conflicts can occur in various

areas: (A) priorities in scheduling and sequencing the tasks; (B)
among the team members;
(C) budget and costs; and (D) other administrative and technical
issues.
Planning and Scheduling Projects
Planning a project starts once its objectives have been
established and the project manager
and major players of the team have been identified. For
planning and scheduling the project
there are useful methodologies available. The Gantt chart, the
Program Evaluation and
Review Technique (PERT), and the Critical Path Method (CPM)
give project managers
graphic displays of project activities and allow calculation of a
time estimate for the project.
Activities are project steps that consume resources and time.
The crucial activities that
require special attention to ensure on‐time completion of the
project can be identified, as
well as the limits for how long others’ start can be delayed.
The Gantt Chart
The Gantt chart is useful for scheduling project activities in the
planning stage and then

monitoring them by comparing their actual progress to planned
progress. We will illustrate
a Gantt chart, launching a new radiation oncology service, with
the list of necessary
activities and their duration, in Exhibit 13.1.
The Gantt chart depicts the duration of this project as sixty‐four
weeks; however, not all the
activities occur at the beginning. For example, contractor
selection—activity C—does not
start until land has been acquired and a radiation oncologist
hired—activity B. For certain
decisions, the input of key personnel for the new service must
be considered; dependency
relationships exist among the activities. Some activities cannot
start until after others are
finished. Yet certain activities can be carried out parallel with
others. For example, activities
D and E can be carried out during the same time frame. What
other activities in this
329
330

example can be carried out simultaneously? Since a Gantt chart
displays the information on
a time scale, project managers can report the activities to their
internal and external
constituencies during their implementation. They also can
monitor the work of the
subcontractors for conformity to the schedule.
The Gantt chart's display of the schedule of activities is based
on their sequential
relationships, and those are identified during the formulation
phase of the project. They are
called dependency or precedence relationships. The activity
precedence relationships for
the example of the radiation oncology facility are identified in
Table 13.1.

EXHIBIT 13.1. Gantt Chart for Launching a New Radiation
Oncology Service.
This table displays the crucial information that structures the
project, so that an activity
cannot be started until after a previously necessary activity has
been done. Similarly, those
activities that can be performed simultaneously are identified.
Table 13.1 shows that activities A and B start around the same
time and are followed by
activity C. Activities D and E follow activity C and also should
start at around the same time.
Those two activities are followed by activities F and G, which
should start simultaneously.
Finally, activities F and G lead to activity H, the last activity,
which will complete the project.
330
331

TABLE 13.1. Activity Precedence Relationships.
An obvious advantage of a Gantt chart is its simplicity, which
makes it a very popular
management tool. However, Gantt charts cannot depict other
chronological relationships
among the activities that also affect whether the project is done
on time and successfully.
For example, a Gantt chart cannot show a health care manager
how a delay in one of the
early activities will affect later activities. Conversely, some
activities may be safely delayed
without affecting the overall project schedule, but the health
care manager cannot see that

from a Gantt chart. This tool is most useful, then, for simple
projects or for the early
planning on more complex projects.
PERT and CPM
331
332
Program Evaluation and Review Technique (PERT) and the
Critical Path Method (CPM) are
tools for planning and coordinating large projects. Project
managers can graph the project
activities, estimate the project's duration, identify the activities
most critical to its on‐time
completion, and calculate how long any activity can be delayed
without delaying the project
(Stevenson, 2002; p. 775).
PERT and CPM were developed independently in the late 1950s.
Initially, PERT was
developed by the U.S. government and private contractors in

order to speed up weapons
development, because it was believed then that the Soviet Union
was ahead of the United
States in their missile programs. CPM was developed by Du
Pont and Remington Rand
Corporation to plan and coordinate maintenance projects in
chemical plants (Stevenson,
2002; pp. 770–772). PERT considers the probabilistic nature of
completion times. CPM is used mostly for deterministic
problems. Both methods, however,
have common features for scheduling project tasks. For
instance, the project manager must

use the precedence information to visualize a network of
activities, which can be
accomplished in a couple of ways.
The Network
A network is a diagram of project activities and their
precedence relationships, as shown
with arrows and nodes. An activity represented by an arrow is
called activity on arc
(arrow), or AOA. An activity also can be represented by a node
(a circle) and is then called
an activity on node, or AON. Although in practice both
representations are used, most
project management computer programs are designed using an
AON network because of its
simplicity. To represent certain precedence relationships in
AOA networks, a dummy arc
with no time (or resource) must be used, which certainly may
confuse nontechnical users.
Figure 13.1 illustrates the conventions used for activity on arc
and activity on node
networks. Three activities, A, B, and C are to be completed for
the project. Activities A and B
start and finish at the same time; activity C cannot start until A
and B have been finished. In

Figure 13.1, diagram (a) shows the conceptualization of these
activities; diagram (b)
represents the activity on arc (AOA); and diagram (c) represents
the activity on node (AON).
The activities in the AOA diagram show the consumption of
resources and time. Nodes that
appear in the AOA approach represent the beginnings and
completions of activities, which
are called events; since events are points in time,
332
333
FIGURE 13.1. Network Representations.

they do not consume resources or time. However, when the
events are represented by
nodes in the AON diagram, they do represent resource and time
consumption.
Most computer programs identify activities by their endpoints;
so without dummy
variables, activities sharing the same endpoints could not be
separated, even if they had
quite different expected durations. The AON approach usually
uses more nodes, but it
eliminates the need for dummy activities. In practice, both
approaches are used; neither is
more effective than the other. Most PERT/CPM computer
programs can process either
method. Often the choice depends on personal preference or
established procedures.
However, the AON convention is probably simpler for
nontechnical users and is used in this

text.
Projects are analyzed on the basis of the information that is
available. If activity times and
resource consumption are fairly certain, a deterministic analysis
called the critical path
method would be appropriate. On the other hand, if the activity
times and resources are
subject to variation, that leads also to variation in the project's
completion, so in that case a
probabilistic approach must be used.
Critical Path Method (CPM)
Let us consider the radiation oncology example presented
earlier to illustrate the CPM
method. Figure 13.2 displays the network diagram of this
project using the activity on node
convention and the precedence relationship displayed in Table
13.1.
One of the main features of a network diagram is that it shows
the sequence in which
activities must be performed. On AON networks, it is customary
to add a start node
preceding the activities to mark the start of the project, and an
end node to mark its

conclusion. Figure 13.2 shows that activities A and B must be
completed before activity C
can begin, and activities D and E cannot be started until activity
C is finished. In ensuing
sections, activities F and G cannot start before activities E and
D are finished. Finally,
activity H can start once activities F and G are finished.
333
334
FIGURE 13.2. AON Network Diagram for Radiation Oncology.

A path is a sequence of activities that leads from the start node
to the end node. The
radiation oncology project has eight paths, as follows:
1) A‐C‐D‐F‐H
2) A‐C‐D‐G‐H
3) A‐C‐E‐F‐H
4) A‐C‐E‐G‐H
5) B‐C‐D‐F‐H
6) B‐C‐D‐G‐H
7) B‐C‐E‐F‐H
8) B‐C‐E‐G‐H
The length of time for any path is found by summing the times
of the activities on that path.
The time lengths for these eight paths, using times from Exhibit
13.1, are calculated and
shown in Table 13.2.
The critical path, or the path with the longest time, is the most
important: it defines the
expected project duration. Paths that are shorter than the critical
path could

334
335
encounter some delays without affecting the overall project
completion time, as long as the
highest possible path time is defined by the length of the
critical path.
TABLE 13.2. Path Lengths for the Radiation Oncology
Project.
In this example, path 8 (B‐C‐E‐G‐H) is the critical path, with a
total project completion time
of sixty‐four weeks. All activities on the critical path are known
as critical activities.

The path sequences given in the above example would not be
apparent in a computer
program. In order for a program to identify paths, an algorithm
is used to develop four
critical pieces of information about the network activities:
ES: the earliest time an activity can start, if all preceding
activities started as early as
possible
335
336
LS: the latest time the activity can start and not delay the
project
EF: the earliest time the activity can finish
LF: the latest time the activity can finish and not delay the
project
Figure 13.3 shows that nomenclature, which this text uses to
display those four times in a

network diagram.
By computing the ES, LS, EF, and LF, one can determine the
expected project duration,
critical path activities, and slack time.
FIGURE 13.3. Activity Start and Finish Times.
Computing ES and EF Times
Two simple rules compute the earliest start and finish times:
1. The earliest finish time (EF) for any activity is equal to its
earliest start time plus its
expected duration, t:
2. The earliest start time (ES) for activities at nodes with one
entering arrow is equal to the

earliest finish time (EF) of the entering arrow (the preceding
activity). ES for activities
leaving nodes with multiple entering arrows is equal to the
largest EF of the entering
arrow.
Computing LS and LF Times
The two rules for computing the latest starting and finishing
times are as follows:
1. The latest starting time (LS) for each activity is equal to its
latest finishing time minus its
expected duration:
2. For nodes with one leaving arrow, the latest finish time (LF)
for arrows entering that
node equals the LS of the leaving arrow. For nodes with
multiple leaving arrows, LF for
arrows entering that node equals the smallest LS of the leaving
arrows.
To find ES and EF times, move forward from left to right
through the network; to find LS
and LF times, move backward from right to left through the
network. Begin with the EF of
the last activity and use that time as the LF for the last activity.
The LS for the last activity is

found by subtracting its expected duration from its LF. Figure
13.4 shows the calculated ES,
LS, EF, and LS times for each activity. All project management
software reports these values;
nevertheless, the reader is encouraged to calculate a few to gain
practical experience.
The allowable slippage of time for an activity, as well as for a
path, is called slack. The slack
for an activity is the difference between the latest start time and
the earliest start time. It
can also be computed by taking the difference between the
latest finish time and the earliest
finish time. Slack for a path is the difference between its length
and the length of the critical
336
337
path. The critical path has zero slack: all activities must start

and finish at their allotted
times. Formally, two ways to compute slack time are:
or
FIGURE 13.4. Excel Setup and
Solution
to the Radiation Oncology Project, CPM
Version.
The four algorithms discussed previously can be used to find
the critical path of a network
diagram. Any activities with zero slack time are on the critical

path. Knowledge of slack
times lets project managers plan with more flexibility as well as
detail for how to allocate
scarce resources. They can focus efforts on those critical path
activities that have the
greatest potential for delaying the project. It is important to
recognize that activity slack
times are calculated on the assumption that all the activities on
the same path will start as
early as possible and not exceed their expected durations.
Figure 13.4 depicts the Excel
solutions to the example of the radiation oncology project.
Probabilistic Approach
Many real‐life project networks are much larger than the simple
network illustrated in the
preceding example; they often contain hundreds or even
thousands of activities. Because

337
338
the necessary computations can become exceedingly complex
and time‐consuming, large
networks are usually analyzed by computer programs rather than
manually.

Often situations arise when health care managers cannot
estimate activity times with
certainty. Such situations require a probabilistic approach,
which uses three time estimates
for each activity instead of one:
1. Optimistic time (o): the length of time required under the
best conditions.
2. Pessimistic time (p): the length of time required under the
worst conditions.
3. Most likely time (m): the most probable length of time
required.
These time estimates can be made by health care managers or by
others knowledgeable
about the project: contractors, subcontractors, and other
professionals who have completed
similar tasks or project components. They also could provide
time and cost estimates for

each task they are familiar with. Care should be taken to make
the estimates as realistic as
possible. The values can then be used to find the average or
expected time for each activity
t , and the variance of each activity time, σ2. That calculation
uses a beta distribution,
where the expected time (mean) is computed as a weighted
average of the three time
estimates:
The standard deviation of each activity's time is estimated as
one‐sixth of the difference
between the pessimistic and the optimistic time estimates. The
variance is then found by
squaring the standard deviation:
The size of the variance reflects the degree of uncertainty about
an activity's time; the larger

the variance, the greater the uncertainty. After completing the
average time estimates and
the variances for each activity, the analysis returns to the paths
in the project network, since
completing a project on time depends on the path completion
times. The completion time
for any path is a simple sum of all activity time estimates:
The standard deviation of the expected time for each path can
also be computed, by
summing the variances of the activities on a path and then
taking the square root of that
338
339
e

number:
Once the probabilistic expected path times and their standard
deviations are determined, a
health care manager can calculate the probability that the

project will be completed by a
specified time, as well as the probability that it will take longer.
Probabilistic estimates in
network diagrams are based on the assumption that the duration
time of a path is a random
variable that is normally distributed around the expected path
time. That follows from the
fact that activity times (random variables) are being summed
and that sums of random
variables tend to be normally distributed when the number of
items (here, project
activities) is large, as is frequently the case with PERT projects.
Even when the number of
items is relatively small, the normal distribution provides a
reasonable approximation of
the actual distribution.

For probabilistic time estimates, it is assumed that path duration
times are independent of
each other, meaning activity times are independent of each
other and that each activity is
on only one path. The reason for using the independence
assumption is simple: finding the
probability of when an individual path will be completed makes
sense only if that path's
activities are independent of other paths. In a large project with
many paths, the
independence assumption is considered to be met if only a few
activities are shared among
paths. Project managers use common sense to decide whether
the independence
assumption is justified.
One final, important point before looking at a probabilistic
network example: sometimes a

path other than the critical path takes longer to complete,
making the project run longer
than expected. Therefore, it can be risky to focus exclusively on
the critical path. Health
care managers must always consider the possibility that at least
one other path will delay
the overall completion of the project beyond the expected time.
They therefore should
compute the probability that all paths will finish by a specified
time. To do that, find the
probability for each path finishing by its specified time and
multiply the resulting
probabilities to find the joint probability of timely completion.
The probabilistic PERT concepts are illustrated in Example 13.1
using the earlier radiation
oncology case adapted to probabilistic time outcomes.

339
340
Example 13.1
In planning for a new radiation oncology clinic, project
managers determined that due to
the nature of some of the activities, time estimates vary. After
consulting with experts in
each of the activity areas, they have calculated the optimistic,
pessimistic, and most likely

time estimates, in weeks, as shown in Table 13.3.
PRINTED BY: olufunmila[email protected] Printing is for
personal, private use only. No part of
TABLE 13.3. Probabilistic Time Estimates for Radiation
Oncology Clinic.
The network diagram for this project was shown in Figure 13.2,
and the paths and activities
for each path were shown in Table 13.2. In order to calculate

project completion time
probabilities, first we must calculate the expected time and
variance for each activity and
path. Table 13.4 displays the calculations for each activity and
path: the means (t ) and
standard deviations (s) for all eight possible paths for the
project. Given this information,
the health care project manager can develop probabilistic
estimates for the completion of
the project, for various specified opening times or target dates
(t ). The expected completion
times of paths (t ) vary from forty‐six (ACDFH) to sixty‐four
(BCEGH) weeks. Therefore, in
calculating the project completion probabilities for a target
date, all paths must be
considered, especially those closest to the critical path.
340

341
e
s
path
Although we computed each activity's mean and variance using
a beta distribution, path

means and variances, on the other hand, are normally
distributed (having many activities
approximates to normality by invoking the central limit
theorem). The critical path in this
example is path 8 (BCEGH), which has the longest expected
completion time. Besides that,
the expected time can go beyond sixty‐four weeks because of
variation (standard deviation
of approximately five weeks). That is, if sixty‐four weeks is the
average completion time (t ),
that indicates 50 percent completion probability under the
normal curve. For an additional
five weeks (one standard deviation, or
e

z = 1), or specifically by week sixty‐nine (t ), the project
completion probability can be
improved to 84 percent. Figure 13.5 illustrates this concept.

Completion probability nears
100 percent when the standard deviate z is 3.5 or more.
TABLE 13.4. Calculation of Expected Time and Standard
Deviations on Each Path for the Radiation Oncology Clinic.
341
343
s
Again, note that each path's expected duration time is assumed
to be independent, that is,

each activity is on one path, and activity times are independent
of each other. However, if a
few activities are on multiple paths, we can assume a weak
independence.
Table 13.5 depicts the calculation of z‐values for each path in
the example, for sixty‐five
weeks as the targeted completion time. As can be observed,
paths 1 through 4 have z‐values
greater than 2.5, so those paths should have no significance for
completion of other paths.
To observe the impact of the remaining four paths (5 through

8), we can calculate the
probabilities, as shown in Figure 13.6.
The last step in the analysis is the computation of joint
probability, that is, we are interested
in the joint effect of all the paths on the completion of the
project. This is a simple
multiplication of the completion probabilities of the significant
paths (paths 5 through 8).
The probability of completion of this project within sixty‐five
weeks is:
P (completion by sixty‐fifth week) = .9082 ×.7881×.7852×.5793
= .3255 or 32.5 percent.
FIGURE 13.5. Project Completion Probabilities by the
Specified Time.

TABLE 13.5. Path Completion Probabilities.
343
344

FIGURE 13.6. Completion Probabilities for Sixty - Five Weeks.
Similarly, one can compute the probability of completion for
other target days such as sixty‐
six, sixty‐seven, and seventy weeks.
P (completion by sixty‐sixth week) = .9345 × .8365×.8389 ×
.6700 = .4394 or 43.9 percent.
P (completion by sixty‐seventh week) = .9545 × .8770×.8830 ×
.7486 = .5533 or 55.3 percent.

P (completion by seventieth week) = .9871 × .9573×.9625 ×
.8869 = .8066 or 80.7 percent.
The Case of a Dominant Critical Path
If a critical path is dominant (no other paths are significant for
completion probabilities),
then joint probabilities need not be calculated. In such a case,
software programs can
calculate the completion probabilities for any number of
targeted completion times. The
Excel solution to the probabilistic radiation oncology project is
shown in Figure 13.7. Figure
13.7 also depicts the solution for P (completion by the
sixty‐fifth week) as 58% and the
completion time for target probability of 95% as about
seventy‐two weeks.
344

345
FIGURE 13.7. Excel Setup and

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