Introduction to Hospital Management

1. Dr. Ashfaq Ahmed Bhutto
MBBS, MBA, MAS, DCPS, MRCGP, (PhD)
Friday, February 10, 2012

2. What we will do today

1. Our curriculum
2. Plan of study
3. Define a hospital
4. Define Health system
5. System theory
6. Organization of Hospital
2

3. Managing a Modern Hospital – Our curriculum

Quiz 1
Quiz 2
Quiz 3
Date Time Topic
Session 1 Friday, February 10, 2012 9.00 am to 1.00 pm Introduction to hospital
Session 2 Monday, February 13, 2012 9.00 am to 1.00 pm Organization & functioning of Hospital
Session 3 Tuesday, February 14, 2012 9.00 am to 1.00 pm Planning and building of a Hospital
Session 4 Wednesday, February 15, 2012 9.00 am to 1.00 pm Hospital Building Notes- ER, OPD, Wards
Session 5 Thursday, February 16, 2012 2.00 pm to 6.00 pm Hospital Building Notes- OT, ICU, CCSD, Day care
Session 6 Friday, February 17, 2012 2.00 pm to 6.00 pm Inventory Management
Session 7 Saturday, February 18, 2012 2.00 pm to 6.00 pm Waste Management
Session 8 Tuesday, February 21, 2012 2.00 pm to 6.00 pm Performance measurement of a hospital
Session 9 Thursday, February 23, 2012 2.00 pm to 6.00 pm Patient Safety, HSE, Infection control
Session 10 Friday, February 24, 2012 2.00 pm to 6.00 pm Disaster & change Management

4. Plan of study-Course Requirement

 Attending interactive sessions & discussion
 Learn tools and practice
 Getting Three quizzes and SEQ
 Final assignments to be completed during supervised learning
period. (Full prospect and requirements of assignments will be
given later)
4

5. Plan of study-Session routine

 One day before new session visit web site and attempt
pretest
 Discuss test findings of last session - five minutes
 Interactive sessions, Discussion and presentations
 Just before the conclusion: Post-test for five minutes in
the class room
5

6. Method of assessment
Continuous assessment

 Attendance and Participation 5 Marks
 Pre and Post test 5 Marks
 Three quizzes and/or SEQ: each carries 10 Marks 30 Marks
 Final Assignments report 20 Marks
Total 60 Marks
Final examination Total 40 Marks
Grand Total 100 Marks
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7. Study materials

 Managing a Modern Hospital, 2nd Edition (Indian Print), Edited byA.V.
Srinivasan (Free)
 New ways to improve services in Indonesia A Text Book and Guide - First
Edition Hospital Management Training Adi Utarin, Gertrud Schmidt-Ehry,
Peter Hill (Free)
 District health facilities: Guidelines for development and operation-WHO
Publication (Free)
 WHO MAKER(URL: http://www.who.int/management/en/) (Free CD)
 Textbook of Management for Doctors by Tony White (Old Book Free for PC)
 Wolper, Lawrence F., Health Care Administration: Planning, Implementing, and
Managing Organized Delivery Systems, Fourth Edition, Jones and Bartlett Publishers,
Boston, MA, 2004. $100
 Management of Hospitals & Health Services by Rockwell Schulz & Alton C. Johnson
 Healthcare Management: Organization Design and Behavior by Kaluzny & Shortell
 Modern Healthcare online(URL: http://modernhealthcare.com)
 Handouts
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8. Communication

 Facilitators meeting: on appointment only
 Facilitators designation: AMS (PS & QC)
 Facilitators office: 1st floor, Admin Block, Civil
Hospital Karachi
 Facilitators office phone number: 99215740 Ext: 1133
 Facilitators cell phone number: 0300-9225378
 Email: drashfaqbhutto@hotmail.com (use only this)
 Web Page: http://cpsphm.wordpress.com/

9. What is a Hospital


10. What is a hospital?

Roots of word
Hôpital (Fr); hospitale (L): an inn, hospice.
Definition
„An institution which provides:
1. Beds,
2. Meals, and
3. Constant nursing care for its patients while they undergo
4. Medical therapy at the hands of professional physicians. In
carrying out these services, the hospital is striving to
5. Restore its patients to health‟
(Miller 1997).
10

11. Comprehensive definition is difficult

 Diversity of financial budgets in Europe from €50 other spend
€14000 per bed
 The type of hospital can be difficult to classify. Small acute
care service to a larger long term care facility? E.g.Dervla Murphy
 Many buildings, or hospitals on different sites may merge
into one organizational structure.
 Does the definition of a hospital cover only the activities
undertaken within its walls? Hospitals in USA have
embarked on vertical mergers that incorporate other service
types such as rehabilitation and post-discharge care.
 Advances in short-acting anesthetics create opportunities for
free-standing minor surgical units offering day surgery.
11

12. The development of hospital systems

Hospitals have changing roles over the centuries:
1. Shelters for the poor attached to monasteries in the Middle
Ages.
2. Feared last resort for the dying in the eighteenth century.
3. Shining symbols of a modern health care system in the
twentieth century.
Present-day hospitals reflect a combination of the legacy of
the past and the needs of the present. Huge advances in
knowledge and technology has shaped present hospital. A
doctor 50 years back will never recognize hospital of today.
12

13. History of Hospitals


14. Oldest Hospital

 Heinz E Müller-Dietz (Historia Hospitalium 1975) describes in
Mihintale Sri Lanka at the foot of the mountain are the ruins of a
perhaps the oldest in the world hospital. A medical bath (or stone
canoe in which patients were immersed in medicinal oil) and a
stone inscription and urn were excavated.
 According to the Mahavamsa, the ancient chronicle of Sinhalese
royalty written in the 6th century A.D., King Pandukabhaya (4th
century BC) had lying-in-homes and hospitals (Sivikasotthi-Sala)
built in various parts of the country. This is the earliest
documentary evidence we have of institutions specifically
dedicated to the care of the sick anywhere in the world.
14

15. Hospitals in India

In India much before the birth of Prophet Essa Institutions
were created specifically to care for the ill.
King Ashoka founded 18 hospitals c. 230 BC. There were
physicians and nursing staff, and the expense was borne by
the royal treasury.
Reference:
Roderick E. McGrew, Encyclopedia of Medical History (Macmillan 1985), p.135.
15

16. Hospitals in China and Persia

 State-supported hospitals later appeared in China during the
first millennium A.D.
 The first teaching hospital where students were authorized to
methodically practice on patients under the supervision of
physicians as part of their education, was the Academy of
Gundishapur in the Persian Empire. Elgood has argued that
"to a very large extent, the credit for the whole hospital system
must be given to Persia".
Reference:
C. Elgood, A Medical History of Persia, (Cambridge Univ. Press), p. 173.
16

17. Hospitals in Muslim world

The first Bimaristan was founded in 86 AH by the Muslim caliph al-Waleed
bin Abdel Malek in Damascus. At that time, most hospitals had doctors that
diagnosed and treated all patients, but the Bimaristan was unique in that it
had doctors that specialized in certain diseases.
Once admitted into a Bimaristan, the patient can stay for as long as she/or
he needed; there was no time limit. Once the patient has fully recovered,
they were provided, not only with clean clothes, but with pocket money.
Reference:
al-Hassani, Woodcock and Saoud (2007), 'Muslim heritage in Our World',
FSTC Publishing, pp.154-156
17

18. 18

19. Cairo Hospital : 1248 AD 19

20. Dar us Shifa Hospital, Turkey, 1471 AD 20

21. Hospitals in Medieval Europe

Medieval hospitals in Europe
followed a similar pattern. They
were religious communities, with
care provided by monks and
nuns. (An old French term for
hospital is hôtel-Dieu, "hostel of
God.") Some were attached to
monasteries; others were
independent and had their own
endowments, usually of property,
which provided income for their
support.
21

22. A Christian Hospital ward
22

23. Hospitals have evolved over the centuries in response to social, political & and
medical knowledge changes
Role of Hospitals Time Characteristics
Health care 7th century Byzantine Empire, Greek and Arab
theories of disease
Nursing, spiritual care 10th to 17th centuries Hospitals attached to religious
foundations
Isolation of infectious 11th century Nursing of infectious diseases such as
patients leprosy
Healthcare for poor people 17th century Philanthropic and state institutions
Medical Care Late 19th century Medical care and surgery; high mortality
Surgical Centers Early 20th century Technological transformation of hospitals;
entry of middle-class patients; expansion
of outpatient departments
Hospital-centered health systems 1950s Large hospitals; temples of technology
District general hospitals 1970s Rise of district general hospital; local,
secondary and tertiary hospitals
Acute care hospital 1990s Active short-stay care
Ambulatory surgery centers 1990s Expansion of day admissions; expansion
of minimally invasive surgery
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24. Business process


25. Value chain/Business Process
Input logistic

Operation
Processes
Output logistics
Strategy
Sales & Marketing
Positioning Promises
•Management
Services by employees
Customer
Specifications Delivery
Expectations
Margin

26. Hospital as a System


27. SYSTEMS THEORY

Provides a general analytical framework
(perspective) for viewing an organization.
27

28. system

28

29. 29

30. Characteristics of Organizations as Systems

 Input-Throughput-Output
 Inputs
 Throughput (System parts transform the material or energy)
 Output (System returns product to the environment)
 TRANSFORMATION MODEL (input is transformed by
system)
 Feedback and Dynamic Homeostasis
 Positive Feedback - move from status quo
 Negative Feedback - return to status quo
 Dynamic Homeostasis - balance of energy exchange
30

31. General Theoretical
Distinctions

 Classical and humanistic theories prescribe
organizational behavior, organizational structure or
managerial practice (prediction and control).
MACHINE
 Systems theory provides an analytical framework for
viewing an organization in general (description and
explanation). ORGANISM
31

32. Principles of General Systems Theory

 Laws that govern biological open systems can be applied to
systems of any form.
 Open-Systems Theory Principles
 Parts that make up the system are interrelated.
 Health of overall system is contingent on subsystem
functioning.
 Open systems import and export material from and to the
environment.
 Permeable boundaries (materials can pass through)
 Relative openness (system can regulate permeability)
 Synergy (extra energy causes nonsummativity--whole is
greater than sum of parts)
32

33. Characteristics of Organizations as Systems
 Role of Communication

 Communication mechanisms must be in place for the organizational
system to exchange relevant information with its environment
 Communication provides for the flow of information among the subsystems
 Systems, Subsystems, and Super systems
 Systems are a set of interrelated parts that turn inputs into outputs through
processing
 Subsystems do the processing
 Super systems are other systems in environment of which the survival of the focal
system is dependent
 Five Main Types of Subsystems
 Production (technical) Subsystems - concerned with throughputs-assembly line
 Supportive Subsystems - ensure production inputs are available-import raw
material
 Maintenance Subsystems - social relations in the system-HR, training
 Adaptive Subsystems - monitor the environment and generate responses (PR)
 Managerial Subsystems - coordinate, adjust, control, and direct subsystems 33

34. system

34

35. Closed system

35

36. Characteristics of Organizations as Systems

Boundaries
 The part of the system that separates it from its environment
 Four Types of Boundaries
Physical Boundary - prevents access (security system)
Linguistic Boundary - specialized language (jargon)
Systemic Boundary - rules that regulate interaction (titles)
Psychological Boundary - restricts communication (stereotypes,
prejudices)
The „Closed‟ System
 Healthy organization is OPEN
36

37. Contingency Theory

There is no one best way to structure and
manage organizations.
Structure and management are contingent on
the nature of the environment in which the
organization is situated.
Argues for “finding the best communication
structure under a given set of environmental
circumstances.”
37

38. Pragmatic Application of Systems Theory

 The Learning Organization
 An organization that is continually expanding its capacity to
create its future
 Key attribute of learning organization is increased
adaptability
38

39. Organization of a
Hospital


40. Hospitals and Health Care Organizations
are unique

 Defining and measuring the output is difficult.
 The work involved more highly variable and complex .
 Much of the work is of an urgent and non-deferrable nature.
 The work permits little tolerance for ambiguity or error.
 Activities are highly interdependent, requiring a high degree of
coordination among diverse professional groups.
 The work involves an extremely high degree of specialisation.
 Hospital personnel are highly professionalised, and their primary loyalty
belongs to the profession rather than to the organisation.
 There exists little effective organisational or managerial control over the
 group most responsible for generating work and expenditures: physicians
and surgeons.
 In many hospital-organisations, there exists dual lines of authority, which
create problems of coordination and accountability and confusion of roles.

41. Factors that influence structure

External Environment (PEST)
1. The economic, political and legal conditions
2. The demographic and cultural conditions
3. New organizational forms, like multi-institutional
arrangements(mergers, corporate structures, health
insurance arrangements, and so on)
4. The latest developments in medical technology that
need to be acquired by the hospitals

42. Factors that influence structure

Organizational assessment
1. Mission and Goals are aligned
2. The quantity, quality and type of services to be provided
must respond to problem faced.
Hospital may develop problem related to current structure
and be able to anticipate problems and take corrective action
quickly. E.g. Problems like communication barriers,
difficulties resulting from conflicting roles, employee
turnover, and recruitment and selection problems

43. Factors that influence structure

Human resources
1. Capabilities and potential of key persons
2. Quality of performance of Senior and middle
management in meeting goals of organization and
in implementing any propose change in
organizational structure
3. Human resource development (HRD) strategy

44. Factors that influence structure

Political process
 The informal internal dynamics of the hospital (need
systemic assessment).
 Identification of the informal groups and leaders
who influence the programmes
 Those may be incorporated in planning and decision
making

45. Definition of Organization Structure

The hierarchical pattern of authority, responsibility,
and accountability relationships designed to provide
coordination of the work of the organisation; the
vertical arrangement of job in the organisations.
Hodge and Anthony (1984)s.

46. Definition of Organization Structure

A formal system of interaction and coordination that
links the tasks of individuals and groups to help
achieve organisational goals.
Pugh et al. (1969)

47. Definition of Organization Structure

The formal allocation of work roles and the
administrative mechanisms to control and integrate
work activities, including those which cross formal
organisational Boundaries.
Child (1972)

48. Definition of Organization Structure

Structure in terms of the skeletal organisation chart. Its
underlying dimensions are the degree of vertical,
horizontal, and spatial differentiation; the forms of
departmentation; and the allocation of administrative
overhead.
De Ven and Ferry (1980)

49. Definition of Organization Structure

The organisation chart, when supplemented with the
perceptions of informants on the question, “Who makes
what decisions, where?”, provides an overall
understanding of the structure of authority in an
organisation.
Miles and Snow (1985)

50. Concerns regarding
organizational designs

• Division of labour in terms of degrees of
differentiation and forms of departmentation.
• Interdependence and sub-optimisation among
organisational components that division of labour
creates.
• Structure of authority.

51. Constitutional elements of structure

 Formalisation
 Centralisation
 Specialisation
 Complexity
 Configuration

52. FORMALISATION

Formalisation represents the extent to which jobs are
governed by rules and specific guidelines.
It is the degree in which policies, procedures and rules
are formally stated in written form.
This aspect of organisation is typical of bureaucracies.
Greater the degree of formalisation, the lower is the rate
of programme change. Rules and norms discourage a
search for better ways of doing things.

53. CENTRALISATION

Centralisation is a measure of the distribution of power within the organisation.
The fewer the people participating in decision-making, and the fewer the areas of
decision-making in which they are involved, the more centralised is the
organisation.
Higher the organisation‟s degree of centralisation, the lower is its rate of
programme change.
In a decentralised organisation, where decision-making power is more widespread,
a variety of different views will emerge from different occupational groups. This
variety of opinions can lead to successful resolution of conflict, and to problem-
solving.
Decentralisation appears to foster the initiation of new programmes and
techniques, which are proposed as solutions to various organisational problems.

54. SPECIALISATION

Specialisation is the extent to which an organisation favours division of labour.
In hospitals, specialisation of roles and functions reach extremely high levels
both in intensity and extent. Work in the system is highly specialised and
divided among a great variety of roles and numerous members with
heterogeneous attitudes, needs, orientations and values.
A certain degree of specialisation among and within organisations,
and professions and occupation, is indispensable for efficient role
performance, individual adaptiveness and organisational effectiveness.
In hospitals, medical and nursing specialisation undoubtedly lead to improved
patient care, just as administrative professionalisation leads to improved
hospital functioning.
A properly regulated specialisation in organisations with high internal social
integration will eliminate the dysfunctional nature of the organisations.

55. COMPLEXITY

Complexity is the extent of knowledge and skill required of occupational roles and their
diversity.
It is the degree of sophistication and specialisation that results from the separation of work
units for the purpose of establishing responsibility.
Organisations employing different kinds of professionals are highly complex. Among the
service organisations, the hospital is the most complex form of organisation.
One way to measure complexity is to determine the number of different occupations within
an organisation that require specialised knowledge and skills.
An organisation is considered complex when it employs numerous kinds of knowledge and
skills; and when these occupations require sophistication in their respective knowledge and
skill areas.
In organisations where there is greater complexity, the greater is the rate of programme
change.

56. CONFIGURATION

Organisation structures occur in a limited number of
configurations. On what basis are these structures
formed? Any structural configuration must include
criteria by which various roles, activities and
coordination mechanisms can be differentiated, as well
as grouped together in the organisation.
Thus the terms organisational structure, design,
hierarchy, chart, model, organogram are
interchangeably used, since they are understood in a
similar way.

57. Basic elements of organization
1. The Strategic Apex

Top-level management, which is vested with ultimate responsibility for
organizational effectiveness. The top management could be a team or a single
individual.
2. The Operating Core
Employees who perform the basic work related to the production of goods or
services of the organization.
3. The Middle Line
People who connect the strategic apex to the operating core. These are intermediate
managers who transmit, control and help in implementing the decision taken by the
strategic apex.
4. The Technostructure
Staff functionaries and analysts who design systems for regulating and
standardizing the formal planning and control of the work. For example
departments such as finance, production planning, human resources, and others.
5. The Support Staff
People who provide indirect support to the work process and are not involved
directly in it. Services like the cafeteria, mailing and transport are considered to be a
part of it.

58. Organization triad

Found in private and teaching hospitals. The triad includes:
1. the governing body,
2. the chief executive officer and
3. the medical staff.
The triad permits sharing of power and authority among
themselves. It is best characterised as an accommodation
rather than sharing. The accommodation results from the
independent status of the physicians and consultants who
play a major role in treating patients in the hospital. Such
accommodation will be much more effective when the
governing body delegates responsibility to the Chief
Executive Officer (CEO) and senior managers for the day-to-
day operation of the hospital.

59. Organisational Designs


60. FUNCTIONAL DESIGN

Most hospitals are familiar with a functional design
where the workers are divided into specific functional
departments, for example, finance, nursing, pharmacy,
housekeeping, and so on. This arrangement is more
prevalent in relatively small hospitals with fewer than
200 beds, offering single specialty services, and this
design is most appropriate in small organisations which
provide a limited range of services and with only one
major goal. The primary advantages of the functional
design are that it facilitates decision-making in a
centralised and hierarchical Manner.ever,

61. DIVISIONAL DESIGN

The divisional design is often found in large teaching hospitals and
sometimes in a few private hospitals that operate under conditions
of high environmental uncertainty and high technological
complexity. It is most appropriate for situations where clear
divisions can be made within the organisation and semi-
autonomous units can be created. Units are grouped according to
accepted medical specialties, such as medicine, surgery,
paediatrics, radiology and pathology.
Divsionalisation decentralises decision-making to the lowest level
in the organisation where key expertise is available. Individual
decisions have considerable autonomy for clinical and financial
operations. Each division has its own internal management
structure. Difficulties with the divisional design tend to occur in
times of resource constraints

62. CORPORATE DESIGN

 There is an increasing use of the term „corporate model‟ in hospitals these days.
 It means any organisation which is legally incorporated. The true structure envisages:
 A governing body
 Top management
 The governing body, the board members include salaried corporate directors and
executives.
 There is a full-time chairman of the board who functions as the executive of the
corporation.
 The board members are elected and paid a fee for attending meetings.
 Top management, the chairman is a voting member of the board and the senior
management is made up of general managers.
 There is a group of corporate staff who provide ongoing long-range support services
to the general managers. Typically, they provide support in such functional areas as
human resource, public relations, data processing, legal affairs and planning.
 There is a great emphasis on team approach to management and decentralisation of
decision-making.
 This design is most useful in large, complex organisations which have several goals
and which operate in changing environments.

63. MATRIX DESIGN

A dual authority system, where individuals have two or more bosses.
This design is evolved to improve mechanisms of lateral coordination and information
flow across the organisation . The structure is usually drawn in the form of a diamond,
with functional heads and programme managers on the top edges of the diamond. This
arrangement increases the opportunity for lateral coordination and communication,
which frequently emerge as problems in other design configurations. Functional heads,
for example, nursing, medical records, pharmacy and housekeeping are responsible for
the standards of services provided by their department. Typically, functional heads bring
stability and continuity to the organisation and sustain the professional status of staff.
Programme managers for departments such as oncology, nephrology, paediatrics,
neurology, and so on bear the responsibility for individual multidisciplinary programmes
and coordinate team functioning. It is the responsibility of the CEO to maintain balance
between both sides of the matrix.
This design is useful in highly specialised technological areas that focus on innovation. It
allows programme managers to interact directly with the environment vis-à-vis
technological developments. The disadvantages of this design are:
(a) individual workers may find that having two bosses is untenable, since it creates
conflicting expectations and ambiguity,
(b) the matrix design may also prove to be expensive, since both functional heads and
programme managers may spend a considerable amount of time in meetings, because of
the frequent requirement for dual accounting, budgeting, control, performance
evaluation and reward systems.

64. PARALLEL DESIGN

This is a design which has been developed as a mechanism for
promoting the quality of work in the organisations. The bureaucratic
or functional organisation retains responsibility for routine activities in
the organisation, while the parallel structure is responsible for
complex problem solving that requires participatory mechanisms. The
parallel structure is a means of managing and responding to changing
internal and external conditions. It also provides an opportunity for
persons occupying positions at various hierarchical levels in the
bureaucratic structure to participate in organisational decisions. It is
on this basis that the parallel organisation has potential for building a
high quality of working life. Within the parallel organisation, a series
of permanent committees are established, with representation from all
levels in the formal hierarchy, as well as from all departments,
depending on the problem
or task at hand.

65. A 1000 bedded Government Hospital


66. 700 bedded University Hospital


67. 1000 bedded Trust Hospital


68. 250-bedded Corporate Hospital


69. Rationality of these Models

 DIVISION OF WORK
 DIFFERENTIATION
 LINE AND STAFF FUNCTIONS
 SPAN OF CONTROL
 WORK LEVELS
 AUTHORITY, DELEGATION, RESPONSIBILITY,
ACCOUNTABILITY

70. 
70