Knowledge management as a Tool in Health Care Systems Optimization - The Case of Närsjukvården Österlen AB - PDF

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Knowledge management as a Tool in Health Care Systems Optimization - The Case of Närsjukvården Österlen AB Anders Lassen Nielsen Master of Public Health MPH 2006:28 Nordic School of Public Health Knowledge

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Knowledge management as a Tool in Health Care Systems Optimization - The Case of Närsjukvården Österlen AB Anders Lassen Nielsen Master of Public Health MPH 2006:28 Nordic School of Public Health Knowledge as a Tool in Health Care Systems Optimization - the Case of Närsjukvårrden Österlen AB. Nordic School of Public Health ISSN ISBN MPH 2006:28 Dnr U12/01:332 Master of Public Health Essay Title and subtitle of the essay Knowledge Management as a tool in Health Care Systems optimization - The case of Närsjukvården Österlen AB Author Anders Lassen Nielsen Author's position and address Consultant, Vibevænget 5, DK 4320 Lejre, Denmark Date of approval December 15, 2006 No of pages 50 Language essay English Language abstract English Supervisor NHV/External Professor Runo Axelsson ISSN-no ISBN-no Abstract Background: Närsjukvården Österlen AB (=NÖAB) won a five-year contract, late in 2000, to operate the local health care services in Simrishamn on behalf of the Region Skåne. The economical forecast for 2002 was a loss of 18 million SEK. A turnaround was urgent. Aim: Primarily to evaluate Knowledge Management (=KM) techniques as a tool in the process of turning a health care organization around. Secondarily, to describe the means by which NÖAB became a more efficient health care organization. In order to evaluate the use of KM in the turnaround process it is necessary to answer three fundamental research questions. Did a turnaround take place? Did the individual projects contribute to increased efficiency? And finally can the approach used in the projects be characterized as KM. Method: The study was an ongoing case study using action research combined with evaluation. The Evaluation uses public data (both quantitative and qualitative) and evaluations done by third parties. That allows for a profound validation of the conclusions. Three central processes were singled out for the evaluation. 1) The makeover of the acute patients way into the system, 2) the disease management program (=DPM) for patients suffering from COPD and 3) the introduction of an error-management system. Results: The operating results were raised from minus 15 million SEK in 2002 to plus 10 million SEK in Manhours were reduced with 20.6%. The average cost for a consultations were reduced with 24.6%. The introduction of the COPD DPM resulted in a saving of approximately 1 million SEK a year. A total of 312 adverse event reports were filled during the first 10 month - an average of 31 a month. The introduction of KM turned the organization into a patient centered, lean health care organization. Changed the decisions making, and resulted in a significant shift towards an acceptance culture. Conclusion: From the nature of the described projects, the description of the landmarks used and the discussion on how the projects fit into a Knowledge Management way of thinking it is concluded that a Knowledge Management approach was applied. The success of the turnaround described in the case makes a strong argument for the use of Knowledge Management when faced with the need to optimize health care systems. Key words knowledge management, optimizing health care systems, efficiency, turnaround, lean management. Nordic School of Public Health P.O. Box 12133, SE Göteborg Phone: +46 (0) , Fax: +46 (0) , Knowledge Management as a tool in Health Care Systems optimization - The case of Närsjukvården Österlen AB By Anders Lassen Nielsen Address: Europe: Caribbean: Vibevænget 5, DK4320 Lejre, Denmark, Phone (+45) The University of the West Indies, Faculty of Medical Science, Eric Williams Medical Science Complex, Mt Hope, Trinidad. Phone ( +1) Intentional blank 2 Content Page INTRODUCTION... 5 THE TURNAROUND OF SIMRISHAMN S HOSPITAL... 5 THE HEALTH CARE SYSTEM CRISIS... 6 PERSPECTIVE... 7 The use of Knowledge Management... 7 Seminal landmarks in the creation of new processes... 9 AIM OF THE RESEARCH HYPOTHESIS AND STUDY QUESTIONS Did a turnaround take place? Did the individual projects contribute to increased efficiency? Can the approach used in the projects be characterized as KM? METHOD STUDY METHODOLOGY Evaluation Action research STUDY DESIGN VALIDATION ETHICAL ISSUES CONCERNING THE RESEARCH Is Knowledge Management compatible with medical ethics? Is research done by an insider ethical? RESULTS ECONOMICAL RESULTS THE TURN AROUND EXTERNAL EVALUATIONS FULFILLMENT OF OBLIGATIONS THE PROJECTS DISCUSSION EVALUATION OF THE TURNAROUND Turning the economical results into black digits Fulfillment of obligations towards society EVALUATION OF THE PROCESSES Evaluation of the Närakut process Evaluation of the COPD-team Evaluation of the Error management program OVERALL CONCLUSIONS ON THE EVALUATION CAN THE PROCESSES IN THE TURNAROUND BE CATEGORIZED AS APPLIED KM? FINAL CONCLUSION AND EPILOG ABRIVIATIONS REFERENCE LIST Intentional blank 4 Introduction The turnaround of Simrishamn s hospital Volvo Cars, Volvo Trucks and Ericsson are the three largest private employers in Swedish business life. However, the fourth largest private employer in Sweden, Praktikertjänst AB, is less known even to the Swedes themselves. Praktikertjänst AB is a corporation owned by 2,500 medical and dental professionals, with almost 16,000 employees in Sweden. Its core business is health and dental care, and one of several subsidiaries in the corporation is Närsjukvården Österlen AB (=NÖAB)(1). In 2000, on behalf of the regional health care authorities, NÖAB won a five year contract after a bid, to operate the local health care service in Simrishamn under private enterprise. (2). Contracted out were two health centers and a small local tertiary hospital with 75 beds (25 surgical, 35 medical and 15 stroke and rehabilitation beds) and almost 450 employees. At the time, when the private company NÖAB won the contract, the local authorities had been running the hospital for more than 130 years. Simrishamn is geographically situated in the southeastern part of Sweden. The area has an infrastructure that to some extent isolates it from the Copenhagen-Malmoe hub, creating the basis for the old, wellestablished, local, public culture that penetrated the organization deep into the walls (1). In other words the starting point for NÖAB can best be described as an organization with a strong public orientated organizational DNA(3). The first two years showed large negative operating results for NÖAB. The forecast in October 2002 was an estimated catastrophic loss of 18 million SEK, valued in relation to a turnover of 240 million SEK. With this knowledge a substantial turnaround was an urgent and unavoidable necessity. Figure 1 Operating result for Närsjukvården Österlen AB 5 That it took nearly two years to take action might be explained by the fact that NÖAB in the fiscal year 2001 had a temporary income. It was a one time restructuring fee of 15 million SEK that is excluded in Figure 1 p 5. This fee most likely masked how urgent it was to take firm economic actions until late 2001(1). The positive trend seen after 2002 strongly suggests that the turnaround was a success, since the operating results were increased with 25 million SEK. It rose from minus 15 million SEK in 2002 to plus 10 million SEK in In round figures it is equal to 10% of the annual turnover. A clearly stated strategy of reaching financial balance by the end of 2003 was communicated strongly throughout the entire organization when it was realized during 2002 that a radical turnaround was vital for the company. Processes were started with the aim to make the company more efficient without jeopardizing the quality of the delivered health care. Processes based on two fundamental assumptions: The economical disaster was so imminent that action was required without any delay. The work therefore had to be initiated without long and tiresome planning and evaluation phases. Secondly, the strategy called for was a systematic approach. At the same time it had to be a business optimization strategy. It could not be limited to either specific technologies or specific sources of information. In other words, the conditions for a Knowledge Management (=KM) approach existed. The health care system crisis The situation that existed for NÖAB is not unique in a Swedish perspective. Jesper Olsson in his thesis(4) states that: The Swedish health care system is struggling with financial limitations, an increasing demand for health care and the growing possibility to care for and cure more people than ever before. At the same time studies suggest that between 20-50% of health care expenditure is due to costs from poor quality and that about 30-40% of patients do not receive care based on current scientific evidence and best practice. Health care organizations undertake various improvement initiatives to cope with these problematic situations but only 20-40% of the improvement efforts aimed at changing practice are successful. From this follows that economical investment as well as time, and human resources are wasted and organizational willingness to embrace further necessary change initiatives diminish. It seems that this crisis is not only a Swedish phenomenon but a worldwide problem as well. A problem brought into daylight by the report To err is human: building a safer health system from The Institute of Medicine(5) and later emphasized by both the EU(6) and the OECD(7). As a consequence the OECD, the WHO and others call for the strengthening of implementation research in health systems(8-10). Even though some researchers at the ivi league universities argue that few western societies have yet reached the limit for health care expenditure(11). In a scenario like the one described above, knowledge should be extracted from all relevant cases dealing with improvement. With that intention in mind, it seems relevant to analyze why the turnaround of NÖAB became a success. Hopefully others can learn from such an analysis and be inspired. 6 Perspective The use of Knowledge Management One of the key challenges - from a public health perspective - facing the health care system today is the call for urgent and considerable improvement in overall efficiency and quality. The success of implementing KM in other industries and services prompt the question: Can KM improve health care? Arguably the answer is yes, simply based on the fact that a KM approach was used to carry through the processes making the turnaround of NÖAB possible. What is KM then? In this paper KM is defined - as proposed by Bergeron(12) - from a practical business perspective as: A deliberate, systematic business optimization strategy that selects, distills, stores, organizes, packages, and communicates information essential to the business of a company in a manner that improves employee performance and corporate competiviness. WHO s definition(13) is Knowledge management is a set of principles, tools and practices that enable people to create knowledge, and to share, translate and apply what they know to create value and improve effectiveness. In essence it is the same definition as that of Bergeron. From the definitions, it should be clear that KM is fundamentally about a systematic approach, a business optimization strategy. It is neither limited to particular technologies nor particular sources of information. Figure 2. The Knowledge Management Framework No consensus on a definition of KM exists(14). Various definitions have been proposed(15-17) and KM has to be viewed as an ambiguous concept. It is formed from all the major ` 7 managements and IT trends of the past 20 years(15). Because of its origin the concept of KM becomes a hybrid. KM is perhaps best described as the sum of all the parts (18). To literately use the proverb coined by Barnard(19) One Picture is Worth Ten Thousand Words, two different illustrations (see Figure 2 p 7 and Figure 3 below) might help clarifying the term. KM is a hybrid, many-headed and constantly changing concept involving the human-, social- and corporate capital. When working and using the term, users should be aware that different participants might have diverting understanding of what the term implies. However, fundamentally KM emphasizes the need for open and thorough communication. What is the problem KM should help solve? The health care sector, especially hospitals, are incredibly fragmented places in which, at least four worlds exists: the trustees, the physicians, the managers, and the nurses. According to Mintzberg(20) these four worlds mostly talk past each other and attempt to solve problems in isolation from one another. Each world concerns itself with its own problems, with no mechanism for solving systemic problems those problems that are spread across multiple worlds(21). Figure 3 The Knowledge Management portal (source The Institute for Knowledge and Innovation The George Washington University, 2002) A more holistic approach to organization, as seen in many Japanese companies, is founded on a fundamental insight. A company is not a machine but a living organism a complex adaptive system. Much like an individual, it can have a collective sense of identity and fundamental purpose. Nonaka(22) argues that it is the equivalent of self-knowledge a shared understanding of what the organization stands for, where it is heading, what kind of 8 world it wants to live in, and, most important, how to make that world a reality. Hence organizations must be managed by knowledge. Rather than describing them on one hand as mechanistic systems and on the other hand as professional bureaucracies, they are best viewed as a combination - professional complex adaptive systems(23). Clearly new thoughts on management are required. Such new thoughts could very well be KM, a trend underlined by the fact that both the WHO(24) and the NHS(13) have recently issued strategy papers on KM. Why has KM not caught on to health care? KM has caught on to many industries but far less to health care as judged from an analysis by IDC(15). Only a few accounts of successful adaptation of KM in health care exist. This is understandable since it takes a lot of courage to be the first to apply a new management approach to the conservative health care sector. However examination of the few accounts that do exist tells story of successes(25-27). It is not clear why, but it seems as a general rule that knowledge and experience from management and organizational theory are only transformed with enormous inertia into health care. As Koeck(28) phrases it: Up to this point a student of management and organization theory could only be stunned by how little the efforts to improve quality have learnt from current thinking in management theory and from the experience of other industries. However it seems that the general pressure on health care makes it more evident than ever, that it is a mistake to neglect the learning from other industries(29). The health care organizations are now so complex that it is impossible for any single individual to control and guide the operations, and no single profession can claim to be able to guarantee high quality care(28). The view held by most doctors, that health care is fundamentally different and has therefore little to learn from other disciplines(28), is no longer valid. The paradox in the doctors view - unfortunately also deep rooted can be illustrated by an example. In a municipal hospital in Scandinavia an optimization project was being prepared. In a strategy meeting the Chief Medical Officer (=CMO) was requested by the chartered accountant to give the cost of an appendectomy. The CMO s reply was that it could not be done because each operation and each patient were different. The same officer who himself used descriptive statistics as a mean to define normal in his dissertation for a Doctorate in Medicine. In essence, it was the same question as in the dissertation the accountant put forward; all he wanted was the mean cost and a range. Seminal landmarks in the creation of new processes Confronted with the need for rapid and firm action when you have a largely uncharted road ahead you need to have some landmarks to stay on track to reach your goal. The main landmark used in the turnaround was to practice leadership based on a culture that exhibits both openness, safety and at the same time accountability. These principles will be discussed in details later in the section on Ethics (p 22). Five additional landmarks were used to navigate by. First, the awareness of how decisions are made and the implication it can have on the processes in the organization. The second landmark used was the philosophy of consumerism - putting the patient first. The third landmark was to build a culture of acceptance. The fourth landmark was a firm belief in the lean management principles and the fifth was the understanding of the necessity to introduce procedures to determine when things went wrong. These landmarks will now be discussed in more details. 9 Decision-making Decision-making at first glance seems straightforward. First define the problem, then diagnose its causes, next design possible solutions, finally decide which is best and implement it. But this thinking first model, as pointed out by Mintzberg & Westley(30) should be supplemented with two very different models a seeing first and a doing first. When leaders use all three models, they can improve the quality of their decisions. Healthy organizations, like healthy people, have the capacity for all three(30). The think first or rational model follows a clearly defined process: Define Diagnose Design Decide. This model represents the scientific approach. It represents the core logic in medicine and thus the way medical professionals ideally make decisions. Everyone involved in the health care sector, has during various discussions, heard arguments such as it s in the literature. Implying it is based on published facts, even though follow-up sometimes fails to reveal the precise source. So the question is how is the decision-making really, when there are no or few facts to build the decisions on? Clearly other models must be involved. Insight seeing first - suggests that decisions, or at least actions, may be driven as much by what is seen as by what is thought(30). Archimedes in his bathtub saw (i.e. realized) the law of buoyancy and Alexander Flemming saw the mold, that had killed the bacteria, in his research samples and from that discovery gave us penicillin. Four steps are identified in the process of creative discoveries: Preparation Incubation Illumination Verification. After realizing a problem we work on it, consciously and unconsciously, and suddenly we see the solution. We can verify it either by logic or by actually doing it. But what happens when one can not see it and can not imagine it? Just do it(30). The process for doing first, is in essence experimentation trying something so that you can learn. It has three steps: Enactment Selection Retention. It means trying various things under various circumstances. Finding out which one works, making sense of that and repeating the successful behavior and discarding the rest. Another term for it is learning by doing. Thinking first Features the qualities of Seeing first Features the qualities of Doing first Features the qualities of Science Art Craft Planning, programming Visioning, imagining Venturing, learning The verbal The visual The visceral Facts Ideas Experiences Table 1 Characteristics of the three approaches to decision-making The three major approaches to decision making thinking first, seeing first and doing first correlates with the conventional views on science, art and craft. The first is mainly verbal, the second is visual, and the third is visceral (see Table 1 above). Those who favor thinking are people who cherish facts, those who favor seeing cherish ideas and those who favor doing cherish experiences. Having re
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