In this posting I want to initiate a case study about an Oncology Clinic that Russ Kershaw wrote about in 2000 that was published by Management Accounting Quarterly entitled Using TOC to “Cure” Healthcare Problems. For those of you interested in reading the entire article, here is a link to it.
The article is simply an excellent piece of work and Russ should be congratulated for this work!
For those of you not familiar with an Oncology Clinic, it’s an outpatient cancer treatment clinic that administers chemotherapy to patients. The reason I want to present this case study is because it lines up quite nicely with my last posting and it will set the stage for future healthcare posts. Quite frankly, as Russ rightfully points out in his article, it provides a good case study for examining the application of the Theory of Constraints to a healthcare setting. With that said, let me give you some background.
Because the Oncology clinic administers basically one type of treatment to its patients, explaining the use of TOC principles is much simpler. The oncology patients come to the clinic on as outpatients to receive their chemotherapy treatment. Depending on their cancer-related condition, the treatment may be drugs or medication which is usually administered over a carefully timed series of treatments. The clinic treats about 600 patients on weekdays from 8:00AM to 5:00PM. Because of growing demand, it has been difficult to schedule all of the patients on a daily basis which has resulted in more patient complaints about the increasing wait times. The problem is, if patient satisfaction continues to worsen, the fear is that patients will ultimately choose a different place for their treatments. However, if the clinic can reduce these wait times by improving their capacity to handle patients, it could be a significant financial opportunity for the clinic. (Remember I told you in my first posting on the Affordable Care Act, patient satisfaction is a critical part of Medicare reimbursements, so patient satisfaction is something that must be considered.)
Figure 1 represents the process flow for this clinic whereby the patient first checks in with the receptionist and then goes and sits in a waiting room until they are summoned to go the lab for some blood work. After the blood specimens are collected, the patient then goes into another waiting room until they are called to the exam room for the clinic’s pretreatment process. The patient then sees the doctor in the exam room, then returns to a waiting room until it’s their turn to go to the treatment room for their chemotherapy. When the chemotherapy is completed, the patient then returns to the receptionist to schedule a follow-up appointment. Any time there are three separate waiting rooms, there is room for cycle time reduction. The key is finding or identifying the system constraint and deciding how to exploit it.
The amount of time a patient spends in a treatment chair was determined to be the constraint as the time ranges from one to five hours, depending upon the treatment, but averages 2.5 hours.In my next posting, we’ll talk about how the doctors, office manager, and staff at this oncology clinic examined various alternative for increasing the clinic’s capacity to deliver their chemotherapy.