National Institute of Business Management

Chennai - 020
EMBA/ MBA
Elective: Healthcare and Hospital Management (Part -1)
Attend any 4 questions. Each question carries 25 marks
(Each answer should be of minimum 2 pages / of 300 words)

1.

Explain the important components of Hospital products.

The important components of Hospital products are;

Hospitals today cannot afford to overspend or waste resources, yet facilities must stay at the
cutting-edge of surgical technology. For hospital administrators, maintaining the facility,
managing the staff and coordinating product contracts can become overwhelming. In such
cases, many hospital administrators may consider a group purchasing organization for
additional support. Additionally with the implementation of healthcare reform, GPOs will be an
important component to how healthcare organizations will drive down costs to survive
economically.
"The bases for all GPO services are around developing contracts for their members to use. The
hospitals are looking for a GPO to provide support for them through contracts and products,"
says Randy Walter, executive vice president of Amerinet. "Additionally, a lot of GPOs have
started looking at other ways to help drive down costs across the enterprise of healthcare
providers." Here, Mr. Walter discusses what hospitals should be looking for as they select the
appropriate GPO.
1. Contract portfolio flexibility. Hospitals should be aware of how flexible the GPO is with
portfolio contracts. If the GPO only offers contracts with a single supplier, this eliminates
contract options for a provider and can be problematic if a physician needs/requires products
and/or equipment from another supplier. The GPO should be able to offer a flexible contract

portfolio with multiple suppliers in the portfolio in order to provide options for the hospital
staff. Once the contract is set, the GPO needs to provide tools to ensure the hospitals are billed
for the contracted rate based on the GPO contract.
Additionally, some GPOs offer hospital officials the opportunity to draw up a customized
contract for working with a product or supplier outside of the GPO's base portfolio. This is an
important feature for hospitals administrators wanting to drive savings or meet specific
organizational goals in a specific area.
"There are certainly hospitals that like to do their own contract negotiations and maintain their
own agreements and Amerinet supports those facilities that choose to take that path. The
advantage we can provide is that if an organization wants to do their own contracts they can
work on the strategic contract categories for the facility while Amerinet works on the other
contracts in areas that are not a high priority for the internal staff," says Mr. Walter. This allows
the hospital procurement staff to focus on contracts that are important to their facility and
allows Amerinet to be an extension of their internal teams to augment the contracting team.
2. Benchmarking and standardizing capabilities. GPOs offer analytical tools for benchmarking
data and exploring revenue improvement options at the hospitals. The reports often use hospital
data in order to consider standardization options one example of these standardization efforts
might be surgical implant products. The GPO can also examine products purchased in all
departments and ensure the products are purchased at the same price across all divisions. If
there is variation in the product price, the GPO employs price leveling techniques in order to
standardize purchasing.
3. Collaboration potential. It is essential for hospitals to remain competitive within the
community which means providing the highest quality of care to the patients as possible. GPOs
should provide services that aggregate the best practices from other clients and hospitals around
the country and then devise similar plans catering to the individual hospital's situation. In
addition to searching websites for information, the GPO should be able to host collaboration
events and networking opportunities where clinicians and hospital staff can discuss

standardization, patient safety or quality improvement initiatives. These collaboration efforts

can be the basis for discussing best practices in helping organizations become ACOs
(Accountable Care Organizations).
"A lot of people (hospitals and healthcare providers) are doing some great work and what
Amerinet likes to do is be a collaboration point between our members so we can effectively
share best practices between members," says Mr. Walter.
4. Understanding physician preference. The GPO must be willing to work with physicians and
understand the tools each physician needs for his or her procedures. Many surgeons have a
preference in products, such as orthopedic or cardiac implants, and the GPO should be able to
coordinate contracts for the specific devices. GPOs can also help the organization write
agreements for the products physicians prefer.
5. Energy management program. Some GPOs look past the traditional service of working with
hospital contracts to continue cost-saving methods outside of the traditional supply chain in
areas such as energy demand. Amerinet for example provides programs that can advise hospital
administrators on methods to drive down the demand of energy and develop effective
procurement strategies. GPOs should be able to counsel their clients in lighting usage and
conduct energy audits for the hospitals in order to save money.
Additionally, the GPOs should work on geothermal energy contracts with heating and air
conditioning companies that have high energy star ratings.
6. Labor management education. The ability to maintain an efficient workforce is important for
top hospitals. GPOs should provide access to several consulting firms with services for
educating and mentoring administrators on employee management. The GPO should also have
the ability to analyze the workforce and collaborate with the hospital administrators to
coordinate services and educational events, such as webinars, focused on developing an
advanced skill set for the managers. Mr. Walter stressed the importance of these online
capabilities due to a continued reduction in travel for continuing education.

"During the economic downturn, it's going to be harder and harder for individuals to leave the
campus for education," says Mr. Walter.
7. Community needs. Regardless of the savings a GPO has the potential to bring, the hospital
administrators should only consider a GPO that fits into the hospital's communal needs. When
meeting with potential GPOs, hospital administrators should feel the GPO representative could
be a strong partner with the organization, meaning the GPO should make it easy for hospital to
identify and resolve issues as well as implement new projects. If the GPO cannot adapt to the
hospital staff's needs, the partnership will not be as fruitful as it could be.
"You're seeing a lot of administrators looking for the price in the catalogue, the price in
reduction efforts, but they're also looking for a cultural fit," says Mr. Walter.

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2.

Explain

the

elements

of

functions

of

hospital

management.
The WHO has adopted the following definition of Hospital:
It is an integral part of a social and medical organization, the function of
which is:
a.

to provide for the population complete health care both promotive

and preventive care and

b.

Whose outpatient services reach out to the family in its home

environment?

The hospital is also a center for

c.

training of health worker and

d.

biosocial research

The emphasis is on preventative and promotive aspects of health and on

education and research.
Hospital management is a dynamic and ever-changing job that carries with
it the opportunity to take on many different roles. In many cases, the job of
a hospital administrator changes from day to day, and a manager in one
area might have duties that are completely different from a manager in
another area. Even the most basic duties may take up much of an
administrator's time, depending on hospital needs and staff requirements.
Managing complex administrative and clinical processes in a hospital frees
the staff to give more time on looking after patients in hospital and
extending the reach of services from in-patient to out-patient, to long term
care and even home care. Access to the information and the automation of
critical tasks and work-flow is key to not only making this task but work
efficiently. Our Electra hospital management information system, a result of
constant innovation, goes beyond hospital automation to enable resource
management and information management, transformation in patient care,
leading to better patient outcomes and healthier operations.
Hospital Management becomes much more complex because of its complex
operations and the peculiar circumstances under which it operates.
1.

As provider of good patient care it has to run highly specialized medical

and

surgical

procedures

and

provide

standard

type

of

hotel

accommodation.
2.

Round the clock services: Many of the staff members have to be on call.

3.

Deal continuously with problems of life and death. Therefore a sense of

urgency always prevails.

4.

Pattern of dual authority There are two main authority lines in

operation professional and executive. When any conflict occurs, the
employee is caught in between resulting in low moral and affects their
performance.

5.

Usage of Newer and costly equipment due to discoveries and

innovations in medical science. Problem of maintenance and servicing
becomes acute.

6.

Hospitals are compared to industry or a factory.

But it differs widely.

The product of the hospital service and medical care- is rather

intangible and cannot be measured in terms of quality.
7.

The facilities needed in hospitals are innumerable from pin to equipment

costing lakhs of rupees. The hospital is self-contained town. It has to
have its own electricity, water supply, laundry, kitchen, drainage
system, garbage clearance, workshop, transport, stores etc.

8.

It is basically a human organization. People are involved at every stagethe workers and the patients. Therefore, humility, devotion to patients,
compassion and consideration for the sick and wounded have to be the
hallmark qualities of all those who work there.

9.

Management with human touch is a must in hospital management. It is a

human organization run on business lines but not for business ends.

10. Community expectations are higher as they become aware of their right
to better health.
11. Expanding specialties, rising costs and limited resources.

12. Necessity of a team approach (Cooperation Coordination) as provider

of good patient care it has to run highly specialized medical and surgical
procedures and provide standard type of hotel accommodation.
13. Round the clock services: Many of the staff members have to be on call.
14. Deal continuously with problems of life and death. Therefore a sense of
urgency always prevails.
15. Pattern of dual authority There are two main authority lines in
operation professional and executive. When any conflict occurs, the
employee is caught in between resulting in low moral and affects their
performance.
16. Usage of Newer and costly equipment due to discoveries and
innovations in medical science. Problem of maintenance and servicing
becomes acute.
17. Hospitals are compared to industry or a factory.

But it differs widely.

The product of the hospital service and medical care- is rather

intangible and cannot be measured in terms of quality.
18. The facilities needed in hospitals are innumerable from pin to equipment
costing lakhs of rupees. The hospital is self-contained town. It has to
have its own electricity, water supply, laundry, kitchen, drainage
system, garbage clearance, workshop, transport, stores etc.
19. It is basically a human organization. People are involved at every stagethe workers and the patients. Therefore, humility, devotion to patients,
compassion and consideration for the sick and wounded have to be the
hallmark qualities of all those who work there.

20. Management with human touch is a must in hospital management. It is a

human organization run on business lines but not for business ends.
21. Community expectations are higher as they become aware of their right
to better health.
22. Expanding specialties, rising costs and limited resources.
23. Necessity of a team approach (Cooperation Coordination)
The main purpose of the hospital is to restore health to the human body. To
this can be added preventive, promotive & rehabilitation. To increase skills
and efficiency in the health care delivery, Education and Research play a
vital role.
To provide these, hospital has to avail services of skilled professional
medical staff, trained nurse and other technical personnel necessary in
diagnosis and treatment. A well-defined hospital management has to be
worked out taking into consideration of the following points:
Functions of HMIS:
1.

Effective utilization of hospital facilities and improves inventory control

2.

Makes data collected available for research purposes

3.

Generates MIS reports, which help the management in making policy

decisions.
4.

Provides information required to support patient care

5.

Maintains records necessary for statutory requirements

6.

Data security, integrity and accessibility

7.

Efficient tracking of critical public health related data

Daily Operations
The day-to-day operating procedures of a hospital change from venue to
venue. However, an administrator can certainly expect to deal with
management situations similar to managers in other businesses, e.g. caring
for personnel, creating schedules, structuring the work environment,
regulating care and managing finances or facilities are often some of the
duties an administrator can expect to encounter in her daily routine.
Fiscal Management
Financial manager

is one of the most important roles a

hospital

administrator may have. This may include hiring personnel and ordering
medical supplies. It may involve setting rates for health care services. The
job might even include developing the financial framework by which new
programs may be implemented or old ones expanded. Some fiscal
background,

therefore,

is

often

required

of

hospital

administrators,

particularly in small hospitals where managers are expected to fill more

than one specific role.
Clinical Management
If a specific clinical area is understood well by a hospital manager, he may
be given the role of the clinical manager of a facility. Clinical managers are
important to the operation of a hospital as they can evaluate and make
recommendations on specific departments, and have intimate knowledge of
procedures that will allow for informed decisions. These individuals'
responsibilities are usually more discipline-specific than what a more
general hospital manager might expect to encounter.

Health Information
People qualified to make decisions on the collection, security and proper
maintenance of patients' records often make good hospital managers. The
health information aspect of a hospital manager's job requires diligence and
technological knowledge. Hospital managers, in their role as health
information officers, may be among the only authorized personnel in a
facility to access patient records.
Others
Contact must be made between patients, doctors, medical boards and
support

staff.

hospital

manager

often

assumes

this

important

responsibility. Any advances in medicine or technology require a hospital

manager to stay on his or her toes and be constantly updated. Data
processing, operations oversight, and adherence to state and federal
regulations are only a few of the areas
Components of good Hospital Management:
1. Span of control technically feasible and defined.
2. Line of authority clearly defined.
3. Delegation of authority with responsibility.
4. Built in flexibility.
5. Balanced organization.
6. Objectives clearly defined & notified to all staff.
Signs of bad Hospital Management
1. High turnover

2. Friction among heads (Groupism)

3. Slowness in decision process.
4. Lopsided aged structure.
5. Too many rumors
6. Too many disciplinary actions.

4.

Explain the factors which determine hospital quality

care.
The importance of nurse staffing to the delivery of high-quality patient care
was a principle finding in the landmark report of the Institute of Medicines
(IOM) Committee on the Adequacy

of Nurse Staffing in Hospitals and

Nursing Homes: Nursing is a critical factor in determining the quality of

care in hospitals and the nature of patient outcomes1 (p. 92). Nurse
staffing is a crucial health policy issue on which there is a great deal of
consensus on an abstract level (that nurses are an important component of
the health care delivery system and that nurse staffing has impacts on
safety), much less agreement on exactly what research data have and have
not established, and active disagreement about the appropriate policy
directions to protect public safety.
The purpose of this science examining the impact of nurse staffing in
hospitals and other health care organizations on patient care quality, as well
as safety-focused outcomes. To address some of the inconsistencies and
limitations in existing studies, design issues and limitations of current
methods and measures will be presented. The chapter concludes with a

discussion of implications for future research, the management of patient

care and public policy.
Nursing is a critical factor in determining the quality of care in hospitals and
the nature of patient outcomes. Twenty-four hour nursing care is one of the
distinctive hallmarks of inpatient care in hospitals. Historically, hospitals
have been at the core of the U.S. health care system, and nursing services
are central to the provision of hospital care. They have also functioned as
the traditional place of work for nursing personnel and especially for
registered nurses (RN). Nursing personnel comprise the largest proportion of
patient care givers in a hospital. Nursing care in hospitals takes on added
importance today because increase in acuity of patients requires intensive
nursing care.
In recent years, the nursing profession has been especially concerned about
the nature of the transformation taking place in the health care sector.
Reports of hiring freezes and layoffs of RNs in hospitals have led to
increasing apprehension among them and their supporting organizations
about the potential threat to the quality of patient care in hospitals as well
as their physical and economic well-being. RNs have expressed concerns
that hospitals are implementing a variety of nursing care delivery systems
involving major staff substitutions, reducing the proportion of RNs to other
nursing personnel by replacing them with lesser-trained (and at times
untrained), and lower-salaried, personnel at a time when the increasing
complexity of hospital inpatient caseloads calls for more skilled nursing
care.
At the same time, the aggregate quantity of RNs is at a high level, creating
uncertainties about job security. Much health care is moving to ambulatory
settings, the community, and the home through home health services. The

nursing profession also has concerns about the training needs to

accommodate these
In The Quality of Health Care Providers (NBER Working Paper No. 7327),
authors Mark McClellan and Douglas Staiger describe a systematic approach
to assessing hospital quality which overcomes many of the key limitations of
existing methods. First, it reduces measurement costs by isolating particular
combinations of indicators that provide a truer measure of quality at a
hospital. Second, it performs better than alternative approaches in reducing
the problem of "very noisy" measurements resulting from small patient
samples and large numbers of factors outside the health care system
affecting patient outcomes. Finally, the authors' approach allows them to
make better predictions about the current and future quality of providers
than existing methods do.
McClellan and Staiger apply their approach to an analysis of heart disease in
elderly Americans, the successful treatment of which is highly dependent on
quality care. They find that differences across hospitals in short-term
mortality rates following a heart attack, adjusted for patient demographics,
are excellent indicators of the quality of care. Those rates vary dramatically
across hospitals, with differences that are persistent over time, and are
highly correlated with alternative indicators of quality.
Using the same methodology and data on patient outcomes from 1984 to
1994, the authors attempt to compare quality between for-profit and not-forprofit hospitals. In Comparing Hospital Quality at For-Profit and Not-for-profit
Hospitals (NBER Working Paper No.7324), they observe that, on average,
for-profit hospitals have higher mortality among elderly patients with heart
disease, and that this difference has grown over the past decade. Not-forprofit hospitals perform better with elderly patients with heart disease, even
after adjustments are made for differences in hospital size, teaching status,

whether the hospital is in a city, and patient demographics. Much of this

difference is attributed to the location of the for-profit hospitals, though.
For-profits tend to locate in areas with higher costs and worse outcomes.
Not controlling for these area effects, it would look like they tend to have
somewhat higher costs and worse outcomes -- an error commonly made in
the literature. Within the areas where they locate, they tend to do a little
better than average on both.
In other words after adjusting for other differences between market areas,
the mortality measure indicates that for-profit hospitals offer better quality.
More striking are the differences in mortality rates within each hospital
ownership type.
The authors examined three market areas with varying for-profit/not-forprofit hospitals within them, resulting in a sample of 3,718 hospitals.
Overall, the authors' analysis suggests that factors other than profit status
may be the main determinants of quality care in hospitals.

6. Write an essay on purpose of records and registers in

hospital.
Purpose of Records
Hospitals deal with the life and health of their patients. Good medical care
relies on well-trained doctors and nurses and on high-quality facilities and
equipment. Good medical care also relies on good record keeping. Without
accurate, comprehensive up-to-date and accessible patient case notes,
medical personnel may not offer the best treatment or may in fact
misdiagnose a condition, which can have serious consequences. Associated
records, such as X-rays, specimens, drug records and patient registers, must

also be well cared for if the patient is to be protected. Good records care
also ensures the hospitals administration runs smoothly: unneeded records
are transferred or destroyed regularly, keeping storage areas clear and
accessible; and key records can be found quickly, saving time and
resources. Records also provide evidence of the hospitals accountability for
its actions and they form a key source of data for medical research,
statistical reports and health information systems.
It is still common in many hospitals to give each department total autonomy
in the management of its records.

Unfortunately, this decentralization of

records care often leads to poorly designed filing systems, loss of

information, premature destruction or unnecessary retention of records and
ultimately to inefficiency and wasted resources. Above all, patient care will
be adversely affected if correct records are not maintained or if records are
inadequately managed or if there is no means of co-ordinating the care the
same patient receives in different departments. A structured and effective
records management programme, covering all departments and all records
irrespective of media, should be the aim of every hospital.
A comprehensive records programme will help to ensure that staff have
access both to clinical information and to administrative records on a wide
range of issues, including policy, precedents, legal rights and obligations,
personnel, finance, buildings, equipment and resources. Besides controlling
records needed for current business, the programme will ensure that the
hospital can meet its legal and financial obligations and can defend its
actions when necessary.
Managing Hospital Records addresses the specific issues involved in
managing clinical and non-clinical hospital records, indicating where
particular approaches are needed to meet the specific requirements of a
records service within a hospital environment.

While Managing Hospital

Records is primarily concerned with the records of general (or acute)

hospitals, much of its content is also applicable to the management of
records in other health care facilities, such as long-stay hospitals, mission
hospitals, sanatoria, community clinics and local health centres.
This module is written particularly for those already working in, or recently
appointed to, hospital posts carrying managerial responsibility for records
and also for managers in other sectors interested in hospital records issues.
Activities are designed on the assumption that students are working in a
hospital record-keeping environment or have access to hospital records.
Those students who do not have access to hospital related records may
choose to adapt the activities to suit hypothetical situations.
Managing Hospital Records builds on the general principles outlined in the
core modules of the Management of Public Sector Records Study
Programme. Students of Managing Hospital Records are strongly urged not
to begin the module until they have first completed work on all core
modules in the Management of Public Sector Records Study Programme or
are otherwise comfortable with the concepts and practices outlined in those
modules.
Managing Hospital Records consists of five lessons:
Lesson 1: The Context of Hospital Records Management
Lesson 2: Management of Patient Case notes
Lesson 3: Management of Other Hospital Records
Lesson 4: Appraisal, Storage and Access Issues
Lesson 5: What to Do Next?

Registers in Hospital
The registration process
The actual processes of registration in a hospital registry differ little from
the principles If physical files are maintained, they will comprise the
accession register, patient index file and tumour record file. When the
registry is computerized, access to the data-base can, of course, be by
registration number, patient name, tumor site etc.
Once a case of a registrable tumor has been identified, information about
the patient and his or her tumour is abstracted from the medical record,
either via a predesigned form, or directly into a computer without the
intermediate step of a paper abstract. Considerations of coding and medium
conversion, as described in Chapter 8, are relevant here. Since most
hospital registries will be recording information on relatively few cases
(compared with population-based registries), it is recommended that text as
well as codes be entered into the computer so that there will be some documentation of the encoded information. Since most desk-top computers
do not have adequate storage space to maintain large blocks of text, the
text, once entered, can be printed as a paper document/abstract and
maintained in a manual file and the text portion of the computerized record
erased thereafter. The text documentation of - items such as primary site,
histology, and extent of disease is essential for quality control purposes and
for the maintenance of more detailed information for future studies. As an
example of the latter, a patient may be maintained on the computerized
data-base with an ICD-0 site code of T-173.6, skin of the arm and shoulder,
but the textual back-up will denote whether the lesion is located on the
hand, palm, wrist, forearm, elbow etc.

Another reason for maintaining a textual abstract of the medical record is

that the - hospital medical record is often not available when special studies
utilizing cancer patient records are done. It may be in use elsewhere if the
patient has been readmitted for some reason, or in dead storage if the
patient has died, or have been destroyed if the patient has been dead for a
certain length of time. Thus, an abstract of the pertinent 'information
maintained within 'the hospital registry is essential. Items included in the
abstract will be determined by the hospital and its cancer committee.
However, at a minimum there should be space provided to record pertinent
details for the physical examination and history, &agnostic tests and
laboratory procedures, pathology report and operative report. Details of
treatment should be recorded at the level specified by the hospital, but, at a
minimum, should allow the determination of whether the patient had
surgery, radiotherapy, chemo, immunotherapy, or any other approved form
of therapy. With regard to chemotherapy, specific drugs should be recorded
for quality control purposes, since sometimes drugs are given only to relieve
symptoms (e.g., prednisone is given as an anti-inflammatory agent rather
than for curative reasons).