Chapter 16: Managing
Information
Chapter Objectives
• Appreciate the interconnected nature of
computerized devices in hospitals and other
organizations.
• Be able to define and explain the elements of an
electronic health record system.
• Appreciate the growing use of information systems
in support of public health activities.
• Understand that many health care providers and
members of the public do not share the same
enthusiasm for information systems that managers
have.
Outline
• Electronic Health Records
• Managing Public Health Information
• Managing Inventory
• Managing Human Resources
Definitions
• Health Information and Data
• Result Management
• Order Management
• Decision Support
• Electronic Communication and Connectivity
• Patient Support
• Administrative Processes
• Reporting
Health Information and Data
• Provide immediate access to information such
as individual diagnosis, medications, allergies,
and laboratory test results to improve the
ability or service to make sound clinical
decisions in a timely manner.
Result Management
• Provide access to new and past test results,
thus allowing all participating providers to
make more informed decisions about the
effectiveness of treatment regimens and
patient safety.
Order Management
• Ensure that providers have the ability to enter
and store orders for prescriptions, tests, and
other services. This capability is intended to
improve legibility, reduce duplication, and
allow orders to be completed in a timely
manner.
Decision Support
• Provide reminders, prompts, and alerts to
facilitate diagnoses and treatments by
improving compliance with best clinical
practices, promoting regular screenings and
other preventive practices, and identifying
possible drug interactions.
Electronic Communication and
Connectivity
• Promote secure, open, and readily accessible
channels of communication among providers
and patients to improve the continuity of care,
increase the timeliness of diagnoses and
treatments, and reduce the frequency of
adverse events.
Patient Support
• Provide tools that give individuals access to
their health records, provide interactive
education on relevant health topics, and
protocols to help people conduct home-
monitoring and self-testing activities to
improve control of chronic conditions such as
diabetes and hypertension.
Administrative Processes
• Include computerized administrative tools,
such as scheduling and record-keeping
systems; such equipment should greatly
improve the efficiency and performance of
hospitals and clinics, allowing them to provide
more timely services to patients and other
clientele.
Reporting
• Provide sufficient supportive equipment
(software, hardware, and memory capacity)
that meets uniform data standards and
enables health care organizations to respond
more quickly to federal, state, and private
reporting requirements, including those .
1. Chapter 16: Managing
Information
Chapter Objectives
• Appreciate the interconnected nature of
computerized devices in hospitals and other
organizations.
• Be able to define and explain the elements of an
electronic health record system.
• Appreciate the growing use of information systems
in support of public health activities.
• Understand that many health care providers and
members of the public do not share the same
enthusiasm for information systems that managers
have.
Outline
• Electronic Health Records
• Managing Public Health Information
• Managing Inventory
• Managing Human Resources
2. Definitions
• Health Information and Data
• Result Management
• Order Management
• Decision Support
• Electronic Communication and Connectivity
• Patient Support
• Administrative Processes
• Reporting
Health Information and Data
• Provide immediate access to information such
as individual diagnosis, medications, allergies,
and laboratory test results to improve the
ability or service to make sound clinical
decisions in a timely manner.
Result Management
• Provide access to new and past test results,
thus allowing all participating providers to
make more informed decisions about the
3. effectiveness of treatment regimens and
patient safety.
Order Management
• Ensure that providers have the ability to enter
and store orders for prescriptions, tests, and
other services. This capability is intended to
improve legibility, reduce duplication, and
allow orders to be completed in a timely
manner.
Decision Support
• Provide reminders, prompts, and alerts to
facilitate diagnoses and treatments by
improving compliance with best clinical
practices, promoting regular screenings and
other preventive practices, and identifying
possible drug interactions.
Electronic Communication and
Connectivity
• Promote secure, open, and readily accessible
channels of communication among providers
and patients to improve the continuity of care,
increase the timeliness of diagnoses and
treatments, and reduce the frequency of
adverse events.
4. Patient Support
• Provide tools that give individuals access to
their health records, provide interactive
education on relevant health topics, and
protocols to help people conduct home-
monitoring and self-testing activities to
improve control of chronic conditions such as
diabetes and hypertension.
Administrative Processes
• Include computerized administrative tools,
such as scheduling and record-keeping
systems; such equipment should greatly
improve the efficiency and performance of
hospitals and clinics, allowing them to provide
more timely services to patients and other
clientele.
Reporting
• Provide sufficient supportive equipment
(software, hardware, and memory capacity)
that meets uniform data standards and
enables health care organizations to respond
more quickly to federal, state, and private
reporting requirements, including those that
support patient safety and disease
5. surveillance.
Acceptance of Electronic Health
Records
• Acceptance of electronic health records has
been the most difficult barrier to overcome
• Factors explaining slow acceptance include
lack of user familiarity with computers,
insufficient funding problems for purchasing
equipment and software, concerns about
return on investment, and concerns about
security of system
Structural Considerations
• Systematic elements of an electronic health
records system are similar to those found in a
paper system.
• Advantages of electronic health records include
quick retrieval, far more compact, rarely lost or
misplaced, reduction in error rates, and far less
expensive to operate.
• Major disadvantage is constant security threats
and financial burden to implement systems.
Impact on Quality
6. • Use of electronic health records has led to
higher documentation rates of hypertension,
greater use of antihypertensive therapy, and
more successful reductions in blood pressure
as well as achieving better outcomes in
treating a broad spectrum of diseases.
• Electronic health records have been used to
identify errors that are directly related to
patient care.
Managing Public Health
Information
• Information systems serve important functions in
surveillance, program evaluation, and population
outcomes assessment.
• Privacy and security issues are a major concern in
the use of public health information.
• Privacy requirements for health information must
be respected as a critical element of the
interdependence and trust needed between
health organizations and their clients and
constituents.
Managing Inventory
• Information systems are used to manage
a variety of other activities in
7. organizations, including assuring an
adequate inventory of supplies
• With the use of computers the inventory
process is performed much faster and
more efficiently
Managing Human Resources
• Record keeping requirements have
increased significantly since passage of
the Civil Rights Act in 1964.
• Information systems have aided in the
responsibility of complying with record
keeping and reporting requirements that
fall on shoulders of human resource
departments.
Final Words
• The potential for information management to
improve the value and quality of services
delivered by health organizations has
dramatically increased in recent decades.
• Successful managers will search for new
opportunities to employ information
technology to manage quality, human
resources, inventory, and other processes and
outcomes of their units and organizations.
8. Running head: MASSACHUSETTS’ HEALTHCARE REFORMS
1
MASSACHUSETTS’ HEALTHCARE REFORMS 3
Memo
To: Prof. Thomas Smith
From: Student- Jane Doe
Reference: Health Care Policy
Date: March 18, 2018
Subject: Massachusetts’ Healthcare Reform Act
Massachusetts’ Healthcare Reform Act
Rationale
Massachusetts State is among the states that have made a
number of attempts aimed at reforming the state's healthcare
system to make access to quality healthcare available for its
residents. Recently in 2006, Massachusetts passed the
Healthcare Reform Act, which was later, signed into law by
former Governor Mitt Romney (Van der Wees et al., 2013). The
rationale for this healthcare reform was to provide near-
universal health insurance coverage for Massachusetts’
residents.
Adoption of the Reform
The Massachusetts Healthcare Reform Act was passed by the
State legislators after years of negotiation between Mitt
Romney and the legislators with a compromise reached in 2006
resulting in the enactment of the reform that was effectively
signed into law by Romney on 12 April 206. The reform has
made several changes to its healthcare system in a move aimed
at achieving a near-universal healthcare coverage for the
residents of the state. The first change was made to the state's
Medicaid program that was broadened by providing a
MassHealth waiver, extending health insurance coverage to
children in low-income families with up to 300% of the federal
9. poverty level (FPL) (Kaiser Family Foundation, 2012).
Massachusetts created what is called Commonwealth Care,
which provides the residents of the state with access to
subsidized health insurance for eligible individuals with
earnings below 300% of FPL. Under this new healthcare reform,
individuals with income below 150% of FPL also have the
option of selecting a plan without a monthly premium and low-
cost sharing. However, eligible individuals with earnings falling
between 150-300% PL are subsidized by the state using a
sliding scale.
The Massachusetts Healthcare Reform Act also saw the state
expand its Insurance Partnership Program by providing
incentives and subsidies to the employers to give and workers to
enroll in the state's employer-sponsored insurance. In this
respect, Massachusetts State subsidized insurance costs for the
workers in the state who would otherwise be eligible for
programs subsidized by the government. However, small
businesses are only eligible for up to $1,000 in support per
qualified worker who falls below the 300% FPL (Van der Wees
et al., 2013). Under the program, the state government pays the
portion of qualified workers' premiums that is equal to what the
employees would be expected to pay if employees were on a
subsidized plan. Additionally, under this new healthcare reform,
any employer in the state who fails to provide health insurance
to its workers is expected to pay what is called a ‘fair share'
assessment to the government of up to $295 per worker every
year (Kaiser Family Foundation, 2012).
The reform also created what is called the Commonwealth
Health Insurance Connector whose primary aim is to link those
without access to employer-sponsored insurance and companies
with 50 or fewer employees that provide insurance coverage for
its workers. According to this health reform, small businesses
with 50 of fewer employees have the option of buying insurance
coverage on their own or via the Connector (Rapoza, 2012).
Funding Structure
10. Although Romney and the state legislators agreed on most of
the components of the bill, agreeing on how this healthcare
reform would be financed was a major issue as it was clear that
financing the reform would result in an increase in healthcare
cost. However, following a compromise that was reached, the
state legislators agreed that the reform would be financed by
individuals, employers and the government. First, the
Massachusetts Healthcare Reform is funded by the existing
$320 million obtained in hospital assessments and covered
levies (Van der Wees et al., 2013). Second, the Massachusetts
state legislators agreed that the health reform would also be
financed through by federal safety-net payments of $610 million
as well as federal matching payments on the MassHealth
expansion. Additionally, part of the money to be used in
financing the health care reform is to come from rate increases
projected at $299 million. Further, $295 fair assessment for
employers per employee and the Free Rider Surcharge also
generates revenue used to finance the ambitious health care
reform in Massachusetts (Kaiser Family Foundation, 2012).
Impacts
The impacts of this Massachusetts Healthcare Reform Act have
been so profound. The first major achievement of this
healthcare reform is that it has increased access to affordable
coverage to residents of Massachusetts. Because the law
requires all residents of Massachusetts to have a health
insurance or pay a fine, the law had seen more that 99% of the
residents of the state now get health insurance coverage up from
90% before this healthcare reform was introduced. According to
Rapoza (2012), prior to 2006, more than 24% of low-income
residents of Massachusetts had no health insurance. However,
by 2012, only 8% of low-income adults in the state were still
without healthcare coverage. Overall, about 650,000
Massachusetts residents who lacked health insurance are now
covered.
Another significant achievement of the Massachusetts health
insurance is that it has increased insurance status of higher
11. income persons for the self-employed who did not qualify for
MassHealth. According to Urban Institute, the population of
higher income earners who were without health insurance before
2006 has dropped from 5% then to below 1% three years after
the reform (Kaiser Family Foundation, 2012).
The only notable shortcoming of this healthcare reform is the
cost burden associated with its implementation. The health cost
in the state has risen to a historic high following the
introduction of this healthcare reform was introduced. By 2007,
just one year after the reform, Massachusetts healthcare
expenditure accounted for about 15.2% of its GDP, which is
higher than the nation's average of 13.7% as a whole (Kaiser
Family Foundation, 2012).
References
Kaiser Family Foundation. (2012). Massachusetts health care
reform: Six years later. Retrieved from
https://kaiserfamilyfoundation.files.wordpress.com/2013/01/831
1.pdf
Rapoza, K. (2012, Jan. 20). If ObamaCare is so bad, how does
RomneyCare survive? Forbes p. 1
https://www.forbes.com/sites/kenrapoza/2012/01/20/romney-
care-massachusetts-healthcare-reform/#3d6701195b00
Van der Wees, P. J., Zaslavsky, A. M., & Ayanian, J. Z. (2013).
Improvements in health status after Massachusetts health care
reform. The Milbank Quarterly, 91(4), 663–689.
Chapter 15: Managing Finance
and Budgets
Objectives
12. • Know the elements of a business plan
• Be able to interpret a set of organizational
financial documents
• Understand budgets and explain the uses of
budgets
• Be able to construct incremental and zero-
based budgets
Outline
• Business Plans
• Financial Statements
• Budgets and Budgeting
• Operating Budget
• Capital Budget
• Cash Budget
• Zero-based Budget
• Implementing and Using Budgets
• Using Budgets to Evaluate Organizational
Performance
Business Plans
• Outline used to launch, maintain, or expand the activities
of an organization
• 9 components
13. 1) Executive summary
2) Market analysis
3) Description of the organization
4) Ownership and management
5) Marketing and sales strategy
6) Description of product, program, or service
7) Funding needed
8) Prospective financial data
9) Appendix
Financial Statements
• Convey the financial position of an
organization
• 4 parts:
– Income Statement
– Balance Sheet
– Statement of Cash Flows
– Statement of Retained Earnings
Income Statement
• Also known as the profit and loss
statement
• Details the sales, expenses, and net
income generated by an organization
14. Balance Sheet
• Also known as the statement of financial
position
• 3 sections
– Assets
– Liabilities
– Equity
• Assets = Liabilities + Equity
Cash Flows
• Reconciles changes in cash balances of a
business
• 3 sections
– Operating activities
– Investing activities
– Financing activities
15. • See Figure in text for an example
Retained Earnings
• Reconciles the equity section of the balance
sheet
• 4 parts
– Beginning equity balance
– Net income
– Dividends paid
– Final equity balance
Budgets
• Budget is defined as a comprehensive,
detailed plan for achieving an organization’s
goals and objectives expressed in monetary
terms
• Budgets include data which are:
– Objective
– Measurable
16. – Obtainable
Preparing a Budget
• Budget preparation will likely include many
revisions.
• Approaches to budgeting:
– Incremental: based on previous budget
– Zero-based: starts with blank slate
• Completing a budget should involve input
from various levels of personnel (executives to
front-line staff)
Types of Budgets
• Operating – detailed plans for revenues and
expenses
• Capital – plan for spending on improvements
and additions to property, buildings, or
equipment
• Cash –detailed estimates of anticipated cash
receipts and disbursements
17. Operating Budget
• Contains detailed plans concerning the
anticipated revenues and expenses for every
product, program, or service delivered
• Created at the department or unit level but
rolled up into a consolidated operating budget
• Operating budgets contain four parts:
statistics, revenues, expenses, and pro forma
Operating Budget: Statistics
• Contains information related to the expected
extent and scope of activities.
• 3 steps/decisions
1) Output expectations – estimates of the activities
of a given department
2) Methodology – the approach used to calculate
output expectations
3) Responsibility – accountability for meeting
expectations placed with appropriately
knowledgeable personnel
Operating Budget: Expenses
• Converts expected work activities into
18. predicted expenditures
• 2 main components:
1) statistical information – generally a unit of
volume to measure service output
2) cost data – all costs can be defined as either
variable or fixed
• The time length of an expense budget can be
fixed or rolling
• Allocating indirect costs can be contentious
Operating Budget: Revenues
• Estimates the payments or other
monetary collections used to offset
expenses
• Revenue budgets are driven by the
statistics and expense budgets
• Rates are designed so that the
anticipated expenses break even at
minimum
Pro forma Budget
• Designed to project revenue and
expenses for a possible scenario
19. • Contains information developed in the
statistics, expense, and revenue budgets
• Used as a final test to check the validity
of the other budgets and the accuracy of
their assumptions
Capital Budget
• A plan for spending on improvements and
additions to property, plant, or equipment
(generally fixed assets)
• Capital budgets are long-term in nature
(greater than 1 year) and require an analysis
of the time value of money.
– The time value of money is an analysis that
determines the current value of future
money
Analyzing a Capital Request
Non-financial Criteria:
• Safety and Regulatory
• Quality and Customer Service
• Mandatory Replacement
20. • Discretionary Replacement
• Expansion
Cash Budget
• Used to evaluate an organization’s
solvency in the immediate future
• Uses information from the operating and
capital budgets
• Typically compiled for one or more
defined periods within a budget cycle
Zero-based Budget
• Arranges an expense budget using the
assumption that no existing program is
entitled to renewal
• Cost data is obtained and listed as in
incremental budget
• Importance of each budget item is prioritized
and ranked
• Rankings are split into two categories, those
required by law and those not required by law
21. Incremental Budget
• A budget developed by modifying an
existing budget, usually the current or
previous
• Modifications are based on changes in
assumptions
• Changes tend to be small and applied
uniformly to all categories
Implementing and Using Budgets
• Creating an appropriate budget requires
informed decision making and this can be
accomplished by:
– Budget reviewing and analysis
– Enabling employee participation
– Anticipation of funding needs over time
– Context of quality and customer service
Budget Options
22. • Type of Budget – incremental or zero-
based
• Level of Detail – determine how
thorough data collection activities should
be
• Sources of Information – deciding who
should participate in budget creation and
what sources of data should be used
Budget Options (continued)
• Approach to Information Gathering
– Bottom-up budgeting – budget process starts with
information provided by front-line workers
– Top-down budgeting – budget process starts with
senior managers influencing and controlling
budget inputs
• Expense Budgets – Fixed budget vs. flexible expenses
• Bottom-Up vs. Top-Down Budgeting
Using Budgets to Evaluate
Organizational Performance
1) Monitoring the Budget
– Setting Performance Standards
23. – Using Industry Standards
– Comparing Organizational Performance with
Industry Standards
– Evaluating and Correcting Organizational
Processes
2) Variance Analysis
Variance Analysis
• Using monthly variance analysis is an effective
way to compare planned budgets and actual
expenditures
• 4 steps:
1) focus on significant variances
2) identify the cause for each variance
3) concentrate on controllable variances
4) take action to correct variance
Chapter 14: Managing
Performance and Quality
24. Objectives
• Understand the importance of improving
organizational performance through
performance management, program
evaluation, and continuous quality
improvement (CQI)
• Be able to explain the Turning Point model of
performance management
• Be able to explain a logic model and how it can
be used to evaluate and improve programs
Objectives (continued)
• Be able to define quality from the perspective
of health care delivery and from the
perspective of public health
• Understand CQI methods and techniques such
as process maps, the Plan-Do-Check-Act cycle,
Lean, and Six Sigma
Outline
• Performance Management
• Evaluating Programs
• Continuous Quality Improvement
25. • Defining Quality
• Overview of Quality in the United States
• Six Sigma
• Lean
• Plan-Do-Check-Act
Performance Management
Defined as “a framework for organizational
evaluation and improvement.” Used
widely in both the public health and
private health sectors.
Performance Management in Public
Health
• Turning Point model:
– Performance standards
– Performance measurement
– Quality improvement process
– Reporting progress
26. Performance Management in Health
Services Delivery
• Accreditation (Joint Commission) standards
• Baldrige Criteria for Performance Excellence
– Awards the Malcolm Baldrige National Quality
Award, the highest level of national recognition
for performance improvement
– Criteria include: leadership; strategic planning;
customer focus; measurement, analysis, and
knowledge management; workforce focus,
process management, and results
Performance Management System
• Uses performance standards, measures
employee performance and output, regularly
reports progress, and includes a quality
improvement program
• Example of measures: balanced scorecard –
• employee satisfaction
• financial outcomes
• internal efficiency and quality
• client satisfaction
27. Evaluating Programs
• Systematic assessment of the operation
and/or outcomes of a program, compared to a
set of standards, in order to improve the
program
• Two types of evaluation
1. Formative
2. Summative
Formative Evaluation
• Used to determine whether a service or
program is evolving as intended
• Involves the collection of evidence during the
creation and implementation of a program
• Allows for revision that can improve a
program as it is in the development phase
Summative Evaluation
• Directed towards a general assessment of the
degree to which the outcomes have been
attained over the entire course of the program
28. • Used to determine the merit of a program by
evaluating it when at full strength
• Results in a final judgment about a program
Framework for Program Evaluation
Program Evaluation Framework (Centers for
Disease Control and Prevention):
Assess
• Program Implementation: what took place?
• Program Effectiveness: did it improve health
outcomes?
• Program Accountability: cost-benefit, cost
effectiveness
Logic Models
• A logic model is a graphical representation of
the logical relationships among the resources
that go into a program, the activities the
program undertakes, and the benefits or
changes that occur.
• Depicts how program goals, activities, and
expected outcomes link together in a chain of
reasoning
29. Continuous Quality Improvement
• Use of deliberate improvement techniques,
responding to health needs, and focusing on
activities that improve health
Underuse, Overuse, and Misuse
Underuse: program or service has not been fully
or optimally utilized
Overuse: program or service in which demand
exceeds supply, or when potential risks
outweigh potential benefits
Misuse: otherwise appropriate program or
service is provided in ways that result in
undesirable complications or outcomes
Defining Quality
A single definition of ‘quality’ does not exist due
to varying perspectives of stakeholders
1) Institute of Medicine: “the degree to which health
services for individuals and populations increase the
likelihood of desired health outcomes and are
consistent with current professional knowledge”
2) US DHHS: “the degree to which policies, programs,
30. services, and research for the population increases
desired health outcomes and conditions in which
the population can be healthy”
Defining Quality (continued)
6 Aims of the Health
Services Delivery System
(STEEEP)
•Safe (S)
•Timely (T)
•Effective (E)
•Efficient (E)
•Equitable (E)
•Patient-centered (P)
9 Aims of the Public Health
System
•Population-centered
•Equitable
•Proactive
•Health promoting
•Risk-reducing
•Vigilant
•Transparent
•Effective
•Efficient
31. Process
• All quality improvement systems analyze the
processes followed in order to improve them
• A process is a series of steps designed to
produce activities associated with a desired
outcome. A process has a beginning and end.
Process Map
• Process Map – visual diagram that reflects the
steps associated with a process or activity
– Process maps do not intend to show all steps but
only those that have the greatest influence on a
process
Process Map
Process maps can identify 4 types of problems:
1) Disconnect – poor transfers of work from one
group to another
2) Bottleneck – a point in the process where
volume overwhelms capacity
3) Redundancy – repeated activities at two or more
points in the process (may be beneficial if
32. designed)
4) Rework – occurs when work must be repeated.
Overview of Quality in the U.S.
• CQI experts estimate only 15 percent of quality
problems can be attributed to people; the rest
are due to flawed processes
• Health services often fail to deliver potential
benefits
• Public health services, while underfunded relative
to clinical services (97% of health care
expenditures are devoted to treating sick people;
3% on primary prevention), can benefit from
quality improvement as well
Overview of Quality in the U.S.
(continued)
• CQI was introduced in U.S. clinical health care
in the 1990s
• CQI is relatively new in public health
• Core processes vs. support processes
Six Sigma
33. • An approach designed to reduce the incidence or
number of defects or errors associated with a
process, with a goal of 3.4 errors per 1 million
operations
• 5 Steps:
– Define
– Measure
– Analyze
– Improve
– Control
Lean
• A method intended to eliminate waste in
processes
• Also known as Toyota Production System
• Gets rid of work that does not add value;
minimizes downtime and smooths work flow
Plan-Do-Check-Act
• A common QI method used to implement
quality improvement projects
34. • Plan- Gather and analyze specific data and
observations.
• Do- Test appropriate solutions to the situation.
• Check- Compare results of tests through
measurements and analysis.
• Act- Make the change permanent. Be prepared to
go through PDCA again if needed.