Information Technolog ( Business Process Modelling and Management )
samy071794
BPMofCostMangmentInTheHealthCareSystem.pdf
BUSINESS PROCESSES IN THE FUNCTION OF COST
MANAGEMENT IN HEALTHCARE INSTITUTIONS 1
1 st IVANA DRAŽIĆ LUTILSKY
Departement of Accounting Faculty of Economics and Business
University of Zagreb Croatia
2 nd
LUCIJA JUROŠ Faculty of Economics and Business
Abstract: This paper is dealing with the importance of business processes regarding costs tracking and cost management in healthcare institutions. Various changes within the health care system and funding of hospitals require the introduction of management information systems and cost accounting. The introduction of cost accounting in public hospitals would allow the planning and control of costs, monitoring of costs per patient or service and the calculation of indicators for the analysis and assessment of the economic performance of the business of public hospitals and lead to the transparency of budget spending. A model that would be suited to the introduction in the public hospital is full cost allocation model based on activities or processes that occur, known as the ABC method. Given that this is a calculation of cost of services provided through various internal business processes, it is important to identify all business processes in order to be able to calculate the costs incurred by services. Although the hospital does not do business with the aim to make a profit, they must follow all the costs (direct and indirect) to be able to calculate the full costs i.e. the price of the service provided. In addition, the long-term sustainability of business activities in terms of funding difficulties and the continuous growth of cost of services provided, hospitals must control and reduce the cost of the program and specific activities. Therefore, the objective of this paper is to point out the importance of business processes while introducing ABC method.
Keywords: Business Processes, Cost management, ABC method, Healthcare Institutions
1 This work has been fully supported by University of Zagreb funding the project “Business processes in the
implementation of cost management in healthcare system”, Any opinions, findings, and conclusions or recommendations expressed in this paper are those of the authors and do not necessarily reflect the views of University of Zagreb.
1 Introduction
In recent years, the efficiency of the management in health care services and the system of quality in health care institutions significantly increased. Patients expect more from healthcare providers and higher standards of care. At the same time, those who pay for health services are increasingly concerned about the rising costs of health care services, but also the potential ineffectiveness of the health care system. Consequently, there is a broad interest in understanding the ways of efficient work of health care management and development of practices in order to improve current approaches in the management and implementation of health care services. Cost management through the development of an internal accounting is recognized as an adequate way of controlling and reducing or increasing costs and shortcomings of health care services (Doyle et al, 2004, p.3).
As a result of past attempts to control the cost of health care services managers around the world started to notice certain accounting methods as well as new methods of cost accounting that enables cost-effective allocation of health care resources. Activity Based Costing method (hereinafter ABC method) is a system that allows control of costs by more objective and comprehensive manner while understanding the processes in healthcare institutions.
Health care institutions either use traditional cost accounting system that uniformly distributes the costs on medical services, which results in underestimation and overestimation of the cost of certain services, or do not use cost accounting system at all like in Republic of Croatia. The lack of accurate information on the actual cost leads to wrong management decisions, which ultimately negatively affects the performance of the health care institutions, as well as the satisfaction of users with the quality of medical services. Uniformity schedule costs on services makes it difficult, also, identification of services and processes. Health care institutions, as business systems, appear in the continued role of losers, because of the impossibility of fulfilling the crucial goals of the business system. They realized losses from operating activities primarily due to inability to cover its operating costs (provision of medical services) with operating revenues (contributions for health insurance), or due to the impossibility of identifying the actual cost of services provided and the elimination of non - value added services and processes.
Application of modern accounting system as ABC method in the function of development and implementation of cost management will increase the business performance of health care institutions based on reasonable decisions resulting from the elimination of the shortcomings of traditional accounting systems. The ABC method, unlike traditional systems, is eliminating the uniformity allocation of costs and to each service assigns costs which service has in fact caused through understanding the business processes. This will lead to a number of positive trends in the business of health care institutions, which will primarily be reflected in the following (Osmančević, 2011, p.17):
- making the right decisions based on real costs which will contribute to the achievement of economy, efficiency and effectiveness, as a measure of the achieved degree in cost control, but also as an expression of business success;
- increasing business efficiency, ie. the switch from losers to winners, minimizing and eliminating losses from business activities resulting inability to cover its operating costs with operating revenues, identification of the actual cost of provided services and the elimination of non-value added services and processes; and
- increasing business performance by developing a system for performance measurement expressed through cost reductions in development and implementation of cost management, reviewing costs, re-engineering business processes and
increase the quality of service. All of that offers health care institutions at the same time the satisfaction of users with provided health care services.
Therefore, the objective of this paper is aiming to show how mapping of business processes could help in development and implementation of cost management based on modern cost accounting system – ABC method. We will present in this paper our project regarding implementation of ABC method in one Croatian pubic hospital based on mapping the business processes in Clinic X in order to calculate costs for each process and at the end to be able to calculate costs per patient. Public hospitals in Republic Croatia are forced to issue invoices to the Croatian Institute for Health Insurance based on Diagnostic Related Procedures and most of public hospitals are in deficit because of that. With mapping of the processes and with implementation of ABC method they will be able to reduce some cost and to achieve financial sustainability. Performance measurement based on actual data and actual incurred cost will be relevant for all stakeholders, including public.
2 Reasons for the implementation of ABC method in the Healthcare Institutions Application of ABC method helps in calculating the unit cost of treating patients. Also, it gives the possibility of determining the cost of activities that are not directly related to medical services, as well as the activities of administrative character (monitoring the patient's medical record). In addition, provide valuable information about the type and quantity of used resources and determine potential sources of cost reduction, while maintaining a level of quality. A model for the calculation of direct costs can represent a stable base for decision- making of management in health care institutions. Implementation of ABC methods in the health system requires not only changes because of quantitative changes, but also changes in the functioning of the organization. According to Doyle et al. (2004, p.17-18) the most important reasons for the implementation of ABC methods in the health system are detailed information on costs, changes in the mechanism of financing, improvement of relations with insurance companies and enhanced profitability. Benefits of ABC method for the distribution of all costs incurred are very understandable and accepted in health care institutions. Hospital systems have agreed that use of ABC method for processing costs allows more accurate calculation of costs, and improved insight into the calculation of costs, their cause and behaviour of employees. Also, usage of the ABC method promotes a more efficient use of hospital resources, fairer prices charged to patients for certain treatments. It is also improving relations between administrative bodies (Ministry of Health) and health insurers on the one hand and the hospital, on the other hand, highlighting areas that do not contribute to the value added, increasing management control over the operation of the hospital employees, analysing the profitability of the treatment of the particular patient, encouraging constant evaluation of planned and realized (because they are associated with activities within the hospital system) (O'Reilly et al., 2012, p.82). 2.1 Experience in the application of the ABC method in European countries - England, Finland, France, Germany and Ireland
American program "Medicare" was introduced in 1983 and it was the first federal program to introduce adjustments to the complexity of health care institutions by using the ABC model for financing health care services. The system is used to control the complexity of the work and resulted in a diagnostic - therapeutic procedure (DTP), classification system that facilitates the grouping of patients based on individual patient treatment and necessary costs (Wiley, 2005). Over the past decade, the ABC method has become the predominant mechanism of payments in European hospitals. The main reason for the move to the ABC system is to establish a transparent link between funding and activities. This relationship was unclear to many European health systems where global budgets were the main mechanism of financing hospitals. Economic theory argues that through the payment of hospital based
on a fixed interest rate per unit, activity system based on activities should provide a financial incentive in order to increase the activity which is absent in the global calculations. There is a difference in the motivation for the introduction and adaptation of the ABC model in those five European countries - England, Finland, France, Germany and Ireland. These countries were chosen in order to show that the implementation of the ABC model in health institutions, with different organizational structures in the financial system, has some similarities and differences between the adaptation and implementation of the ABC system. ABC method in England, France and Germany is following more conventional model then Finland and Ireland, in the sense that prices are fixed in advance. In Finland, the ABC method is used to determine the price mainly for medical billing, although these prices may be subject to subsequent changes to ensure the allocation of adequate funds to hospitals (Vuorenkoski et al., 2008; Hakkinen, 2010). In Ireland, the system is used for adjustment of hospital budgets to the complexity of the activities and achieving success (McDaid et al., 2009, Brick et al., 2010). Table 1 show when and how the system of financing based on the activities has been initiated in selected European countries.
Table 1 Timeline and process of financing the implementation of ABC method
YEAR OF INITIAL
INTRODUCTION
OF ABC METHOD
ENGLAND
2003-2004
FINLAND
1997
FRANCE
2004-2005
GERMANY
2003-2004
IRELAND
1993
Implementation of
ABC method
The process
of
introducing
the ABC
method in
stages
through
4-year
period up to
2007 to 2008
It was
introduced
on a
voluntary
basis in
individual
hospital
districts
Gradual
introduction
to the public
hospitals
2004-2008
Introduced
in
four
phases
Gradual
introduction
to the public
hospitals
Compensation for
work done
Budget and
contracts
Payment
per case
and daily
rates
Public
hospitals
payes on the
basis of
budgets of
private
hospitals:
daily rates
and costs for
provided
services
Payment per
case and
daily rates
Budget
FEATURES OF
THE HEALTH
CARE SYSTEM
Access to
hospital services
universal
universal
universal
universal
universal
Providing
hospital services
Mainly public Public and
private
Public and
private
Public and
private
Mainly
public
Main source of taxes taxes Social Social taxes
funding contributions contributions
Source: In accordance: O’Reilly, J., Busse, R., Ha'kkinen, U., Or, Z., Street, A., Wiley, M. (2012) Paying for
hospital care: the experience with implementing activity-based funding in five European countries, Cambridge
University Press, UK.p.76.
In Ireland since the introduction, the application of the ABC method has increased three times compared to the number of hospitals that use this system. In Finland, the transition from the system payment of price per day to payment per case is the result of the 1993 reforms, according to which state subsidies for health care services to be paid by the municipalities, which are funding hospital services for its residents. After the initial adoption of DTP system in 1997, in Finland 13 of 21 hospital districts is using ABC method (Hakkinen; 2010, Kautianen et al., 2011). In England, France, and Germany, the ABC system was introduced on a national level starting in the 2003 and 2004.
The introduction of the ABC method was viewed as a way to encourage competition between public and private service providers, thereby creating a competitive environment (O'Reilly et al, 2012, p.77). ABC method was introduced in stages over several years, hospitals and allowing investor’s sufficient time for adjustment, thereby reducing the likelihood of eventual rejection system. Initially, the application of the ABC method was limited to individual hospitals (funds for the establishment in England) and the relative low participation of hospitals (England and France), with an initial losses and restrictions (Germany) (O'Reilly et al., 2012, p.79). Over time, hospitals are moving away from the hospital payout rate, which is in line with Shleifer's theory, which argues that the potential improvement of activities is maximized when the payout rate is completely independent from hospital costs (Shleifer, 1985).There are some common goals in the implementation, although they vary from country to country. For example, in England, it is a priority to increase efficiency; while in France (where private hospitals play an important role in the performance of operations and where there is no problem with waiting), emphasis is on increasing transparency and fairness in financing between public and private service providers and in the providing of quality services. Table 2 shows some of the common or individual goals and policies for the introduction of the ABC method.
Table 2 Policy objectives for the introduction of funding based on the ABC method
OBJECTIVES ENGLAND FINLAND FRANCE GERMANY IRELAND
Increase efficiency + + + +
Expanding activities +
Providing easier choice on
services to the patients +
Reducing the waiting list +
Improving quality of service + + +
Assuring fair resource
allocation according to
geographical area and within
health care system
+ + + +
Improving transparency for
hospitals financing, activities + + + +
and management
Covering the costs of
provided services +
Creating equal conditions for
payments to public and
private hospitals
+ +
Improving documentation
about internal processes
which will increase
management influence what
will increase efficiency and
service quality
+
Making causality relation
between activities and
services
+ + +
Source: In accordance to: O'Reilly, J., Busse, R., Ha'kkinen, U., Or, Z., Street, A., Wiley, M. (2012) Paying for
hospital care: the experience with implementing activity-based funding in five European countries, Cambridge
University Press, UK. p. 78.
In a relatively short period of adoption of the ABC method, in five European health care systems, contributes to improving efficiency in complex hospital sectors and helping to achieve sustainability of health care system. The future direction of the ABC method is clear; further adjustments are necessary to fully consider the increasing emphasis on quality of care and creating value. The ABC method also is providing more accurate data for performance measurement of hospitals since it is focused on correlation of business processes and consummation of cost through those processes.
3 Business Processes in Healthcare Institutions
There is no agreed, unified definition of the business process. Instead, there are multiple definitions, which take into consideration specific area with its own point of view, concentrating on its own set of problems and context of use. Rummler and Brache (1995, p.45), state that the business process is "a collection of linked tasks which find their end in the delivery of a service or product to a client". If the product or service is intended for external customer then the process is primary, otherwise it is classified as support process. According to Harrington (1991), Martin (1994) and Davenport (1993) business process is a sequence of logically related activities and companies resources, with the ultimate aim of achieving customer satisfaction with their products or services of appropriate quality and price, within a reasonable time and the pursuit of added value (Bosilj Vukšić, Kovačić, 2004, p.9). Smith and Fingar (2003, p.47) defined business process as complete, dynamic and coordinated set of collaborative and transactional activities that deliver value to customers. Bosilj Vukšić, Hernaus and Kovačić (2008, p.19) define the basic characteristics of business processes are that each process has a purpose; each process has an owner; each process has a beginning and end; inputs are entering the process and outputs are coming out; process is composed of sequential feasible activities based on the inputs and outputs of the process; performance of the process is easily valued; in order to persist, the process should have a well-known domestic and foreign suppliers and consumers and process improvement is inevitable.
Healthcare processes can be classified as generic process patterns or medical treatment processes (Becker et al, 2007). Both types of processes may be designed and carry out as cross – departmental or as cross – organizational. Generic process patterns help to coordinate healthcare processes among different people and organizational units or clinics (Becker et al, 2007). Medical treatment processes are those that are representing the actual care and they are the core processes within healthcare institutions. They are depending on medical knowledge and interpretation of patient specific data. They should also be flexibile since they are differing from patient to patient and their general status. Processes are the most effective way to manage a healthcare institution at any level and eventually support its overall goals. By improving processes, a healthcare institution can improve internal efficiencies, effectiveness, adaptability and patient service levels. Process mapping improves our understanding of processes and, in essence, boosts our understanding of business and
operational performance.
Documenting processes involving people, particularly employees, can lead to insights and changes that can help improve an area of activity. One way to understand a process is to start thinking about its major elements - inputs, outputs, activity steps, decision points, enablers and functions. Improving processes include eliminating entire processes or sub-
processes that are unnecessary; automating manual activity steps; combining activities; outsourcing elements of the process; changing the location where steps are done or the
people performing them; altering or modifying how activity steps are done.
3.1 About Event-driven Process modeling The method of Event-driven Process Chains (hereinafter EPC) (Nüttgens, 1997, p.2) has been developed within the framework of ARIS (Architecture of integrated Information Systems) (Scheer, 1992) in order to model business processes. For research modelling
purposes, the authors were using the EPC model. In the EPC model, a process consists of sequences of events that trigger business functions, which are themselves the results of other functions not including initial events that trigger the whole process.
EPC allow us to model business processes from a business perspective. Thus, the explicit view of the occurrence of relevant situations by events and the bipartite structure, in which events and functions alternate, can lead to quite complex process representations (Weske, 2007, p.168-169).
An event-driven process chain is consisting of the following elements (objects) (van der Aalst, 1999, p.642) like functions: The basic building blocks are functions. A function corresponds to an activity (task, process step) which needs to be executed; events: Events describe the situation before and/or after a function is executed. Functions are linked by events. An event may correspond to the post condition of one function and act as a precondition of another function; logical connectors: Connectors can be used to connect
activities and events. This way the flow of control is specified. From the Figure 1 it is visible that there are three types of connectors: AND, XOR (exclusive or) and OR.
Type of the
operator AND XOR OR
Symbol of
the operator
Role in
branching
Process steps that
follow the rule occur
simultaneously.
Only one process step
that follows will occur.
At least one (and
maximum all) process
steps that follow will
occur.
Role in
connecting
branches
All steps in the
incoming branches
must be completed in
order to preform steps
that follow the rule.
Process steps within
just one branch must be
completed in order to
preform steps that
follow the rule.
Process steps within at
least one branch (and
maximum in all of them)
must be completed in
order to preform steps
that follow the rule.
Figure 1 Types and roles of the logical operators in the EPC modeling
Source: authors according to Scheer et al. (2005)
The event-driven process chain with described objects is a so-called basic event-driven process chain. It is possible to extend EPC with entities (things in the real world), business objects (e.g. data), and organizational units. This way it is possible to model the input and output of a function in terms of entities, business objects, and parts of the organization. Motivated by space limitations of book pages and printouts, Keller and Teufel introduce process interfaces to link EPC models on different pages (Keller, Teufel, 1998). The process interface element defines a point in an EPC process where another EPC process is
triggered. In contrast to a hierarchical function, this triggered process does not return control back to the process interface. Therefore, process interfaces can be regarded as a short-hand notation for a hierarchical function that is followed by an end event (Mendling et al. 2005, p.4).
4 A Prototype of Business Processes in Implementing the ABC method in the
Healthcare Institution - Example of Clinic X
In this part of the paper, the authors will describe the potential implementation in Clinic X of Clinical Hospital Centre Zagreb, Croatia. This model was build based on interviews with employees and empirical research of internal documents Clinical Hospital Centre Zagreb, Croatia. There is 5 basic service or standard operation in adult surgery: operation of coronary blood vessels, operation of the heart valves, operation of the ascending aorta, operation of the lining of the heart and other operations (like neoplasm or clots). Specificity of those surgery is that all patients after surgery have to be placed in the intensive care unit, which is a special department in the hospital and it is not a part of the Clinic X. In addition, the specificity is that the most of the operations are performed with cardiopulmonary bypass, which further increases the price of the process of treatment of patients.
Clinic X is a part of hospital with 72 employees in 2014 from which there is 16 doctors, 44 medical nurses and 12 auxiliary workers and administrative personnel. We have distinguished three types of patients in this clinic. Those patients are emergency patients, urgent patients and elective patients. Emergency patients are those which where operated in the same day when the diagnosis were set and they were not planned. The number of those patients in 2014 was 101. Urgent patients are those which were enabled to leave the hospital after the diagnosis was set and they were operated in elective date after inter clinical or between hospital transposal. The number of those patients was 316 in 2014. Elective patients are those type of patients which are operated on their scheduled time from the waiting list (they were set with the diagnosis and then waiting at home for the operating date). The number of those patients in 2014 was 281. In total, the number of operated
patients was 808 in 2014. However, there is also those patients, which goes through process of Reception, but after examination, it is established that they do not need surgery.
Below is presented a prototype of the model of the main processes of Clinic X which can serve as a starting point for distributing costs per individual activity in the ABC method. The EPC method in the Aris Express tool was used to model the process. EPC was selected due to its comprehensiveness and simplicity. To be more specific, when modelling and determining the costs per activity in the ABC method, it was necessary to communicate often with the participants of the said process. The process of modelling business processes, regardless of their end goal, requires a basic understanding of the goals and used methods to allow the participants, with the help of experts, to revise and confirm the listed activities and models. In order for the models to be representative and fully reflect the process status and later on the cost status of the medical institution. The EPC method thus becomes a tool understandable to accounting and other business consultants, and to the participants of the process, i.e. the medical staff. Its added value is reflected in the potential further use by the clinic management as a basis for analysing the current business activities of the clinic from the position of business orientation, and in providing support for deciding on alterations or on introducing new processes. EPC was shown to be an appropriate method, taking into consideration the large number of participants in an individual process. The EPC notation allows for adding more persons to a single activity, thus allowing it to display team performance on a task.
Due to the administration costs and work hours required by it, it was necessary to note the places where the additional resources are spent for administrative activities. Most of the data is entered in the Hospital Information System (BIS), and determining appointments for operations is carried out with the hospital Kerio system. Entering DRP is conducted via CEZIH system. DRP (Diagnosis related procedures) is a classification of hospital patients in groups with similar clinical characteristics that require a similar consumption of hospital resources. Transfer of funds in Croatian hospital system is carried out through DRP codes. The flows of data, input and output information in the shape of referrals indicated a place of cost calculation. For example, based on an issued referral, the patient can have the examinations carried out at an institution of his choosing, whereas examinations pursuant to an internal referral are carried out exclusively within the hospital. Additional notes or business regulations are indicated in the rectangles next to an event or activity which they refer to.
It should be noted that in certain places, the process interface object was used in order to make the dynamic, sequence and interdependence of the (sub) processes clearer.
Based on an interview with the participants of the process of Clinic X, three main processes of the clinic were determined with their corresponding sub processes, which is visible in Table 3.
Table 3 Processes of Clinic X
Main processes 1. Reception of patients 2. Treatment of patients
3. Discharge of patients
Subprocesses
1.1. Registration 2.1. Protocol for the immediate preoperative treatment
3.1. Writing discharge letter
1.2. Examination 2.2. Operations
1.3. Diagnostically procedures
2.3. Intensive care
1.4. Setting up the diagnosis
2.4. Postoperative recovery and monitoring of the patient
Source: authors
Since there is three types of patient, not all of them are going through all processes. For instance, only elective patients are going through whole reception process like registration, examination, diagnostically procedures and setting up the diagnosis. Emergency and urgent patients are directly going in 1.4. Setting up the diagnosis. In sub process 1.1, medical nurse is signing the patient and she is helping to the physician with the examination of the patients. If the patients need the operation then he is taking diagnostically procedures like laboratory examination and after that, the physician is setting up the diagnosis. If the patients is elective then they are agreeing about the date of the surgery and the patient is going home to wait for the surgery date. He is coming back 1 or 2 days prior the surgery date and he is taking the 2.1 sub process and taking the protocol for immediate preoperative treatment which usually means catheterization of patient, ordering blood, conversation and preparation with anaesthesiologist. After that, he is going on surgery regarding his condition and diagnosis. As previously explained there is five typical surgeries and the longing of surgeries will depend on the condition of the patient. After the surgery, the patient is going in intensive care unit (which is another clinic in the hospital) and after 2 or 3 days, the patient is coming back to the Clinic X for postoperative recovery and monitoring of the patient. After 5 to 7 days the patient is discharged from the hospital. There are two more possible scenarios for the sub process number 2.4, the patient could die or he could be moved to some other clinic within the hospital or to another hospital. If the patients are emergency and urgent then they are skipping first 3 sub processes and immediately going into the forth sub process for setting the diagnosis. If the patient is coming through emergency room then they are immediately going on surgery. If they are urgent then they are taking the protocol for immediate preoperative treatment and next day they are going on surgery. The patients that do not need surgery are going through 1.1, 1.2 and 3.1 sub processes. Therefore, the patients are consuming processes and the processes are consuming resources.
Based on the process the authors have recognized costs that are necessary for performing activities. All costs are identified as direct or indirect costs for the Clinic X, as a place of costs. Direct costs could be directly attributed to the patient and they are directly attributable costs. They could be directly allocated to specific processes and sub processes and then to the patient. Indirect costs are general or common expenses which are allocated ultimately to patients but before that they must be assigned to all related sub processes. An example of such costs is electricity or maintenance. Therefore, that kind of cost is distributed first to all the sub processes and then to the patients regarding which sub processes the patient is taking.
For the purpose of the project, 9 basic models with the following titles were made : 1. Reception of patients 1.1. Registration 1. Reception of patients 1.2. Examination, 1. Reception of patients 1.3. Diagnostically procedures, 1. Reception of patients 1.4. Setting up the diagnosis, 2. Treatment of patients 2.1. Protocol for the immediate preoperative treatment, 2. Treatment of patients 2.2. Operations, 2. Treatment of patients 2.3. Intensive care, 2. Treatment of patients 2.4. Postoperative recovery and monitoring of the patient, 3. Discharge of patients 3.1. Writing discharge letter, in accordance with needs for modelling processes from Table 3. We will show a model of the process of performing an operation, 2. Treatment of Patients 2.2. Operations, while other models, listed above, will not be presented in this article.
4.1 The Model of sub process for Operations
Figure 2 shows process 2.2. Operations, which includes the highest number of participants in this model prototype and it uses a high number of other resources, i.e. costs. In addition to surgeons, specialists and interns who form the operating team, the staff employed at the workplace in an operating room, such as instrument nurses, and auxiliary and other professional medical staff is included in the activities related to the operation. The operating team must consist of three persons: the main operator, the first assistant and the second assistant. In addition to the operating team, one instrument nurse (called "instrument nurse at the table") is also very close to the operating table during an operation, whereas the other staff is nearby, present in the operating room, and it consists of the following: anaesthetist, anaesthesiological technician, perfusionist, perfusionist technician and another, assistant instrument nurse ("rotating instrument nurse", assigned to three operating rooms in shift).
Process 2.2. includes a wider range of services and activities than just the operations by the operating team. Activities directly related to the surgical intervention begin one to two hours before the operating team enters the operating room, and continue after the patient is relocated to intensive care. Activities carried out prior to an operation are explained below.
The transfer of a patient to an operating room initiates the process activities in two branches carried out simultaneously. At the same time when blood doses are brought to the operating room, activities are carried out for preparing the surgical level, for preparing the patient at the table and for preparing instruments and materials which will be used during the operation. Single use materials are registered in the "operating room notebook". After this, anaesthesiological activities are carried out which precede the operation. Part of the staff assists during the operation or is present and ready in the operating room. The time for carrying out the activities strictly related to the operation itself is not stated in the model, because it depends on the type of operation carried out. However, the duration of an operation is very important for cost calculation purposes, because those surgeries that last longer are more costly and consuming more resources. Based on those 808 patients that were operated in 2014 and their types of surgeries and the information from the “operating room notebook”, we were able to determine total number of hours spent in the surgery room. That total number of hours was the cost driver for cost allocation in that process on the patients.
A follow-up of an operation can require activities that generate additional costs, and include the need for perfusionist procedures, adding blood products or introducing medication. The operation is over when the wound is closed. The anaesthetist estimates whether it is necessary to introduce support or supplements, and the patient is transferred to the shock room. Additional care of the patient, is assumed by the intensive care unit (ICU).
The rest of the activities related to the surgical intervention is carried out after the patient is transferred to intensive care, and it includes the collection and sorting of waste, the administrative activity of entering the DRP in the CEZIH system by the doctor, and a sterilization of the finer instruments. The sterilization of the other instruments used for the operation is carried out centrally on the hospital level.
Figure 2 Process 2. Treatment of patients 2.2. Operations
In our project, the process mapping was done in order to connect cost with all processes and sub processes, regarding calculation of cost per patient. The idea was to determine how much each patient is consuming costs from entering the Clinic X, consuming different services and then exiting the Clinic X. Based on interviews with the personnel we were able to establish which personnel is involved in which process with the consummation of time and with the consummation of resources, which incur costs. That is needed for attribution of costs to the sub processes. Further, we were able to connect costs with sub processes and then through cost driver those costs were allocated on patients. For different sub processes different cost drivers were established. For this specific sub process the cost driver were hours of duration of surgery. Since mapping of processes was done and based on that we were able to make some suggestions in order to improve the value added to the patients and to improve performance measurement of the Clinic X mostly based on reduction of costs. So, the suggestions were to improve management of space and medical resources; to improve management in time and engagement of personnel; in reducing the waiting list and improving the quality of services in Clinic X. The cost in Clinic X could be reduced specially with urgent patients since they are usually coming from different clinics within the hospitals and with different diagnosis and medical condition. According to Kaplan and Porter (2011,p.48) a medical condition is an interrelated set of patient circumstances that are best addressed in a coordinated way and should be broadly defined to include common complications and comorbidities. The cost of treating a patient with diabetes, for example, must include not only the costs associated with endocrinological care but also the costs of managing and treating associated conditions such as vascular disease, retinal disease, and renal disease. So, when opening the patient, cost could be reduced by performing several surgeries in accordance with medical condition of the patient. In this way, the duration of the surgery will be reduced and the time of spend time by the patient in the hospital. Also, it would reduce administrative costs and costs of medication and medical supplies for a certain patient.
5 Conclusion
In this paper, the authors presented business processes modelling as a part of implementation of ABC method in healthcare institutions. We have shown one sub process mapping for operations, which is very resource and time consuming. The model of sub process is expressing the path of the patient once the patient is ready for operations and everyone that are involved in his operation. Based on those information’s we were able to determine costs involved in that sub process. Also in all other sub processes mentioned, that were not shown in this paper. Mapping of all the processes in Clinic X allowed us to connect all costs appearing in all sub processes and processes. At the end, we will be able to calculate costs per patient in Clinic X based on their path through sub processes. This information will be helpful for management in decision-making process and for different stakeholders since this is a public hospital. It would also allow the performance measurement based on actual data gathered from cost accounting system of the hospital. In theoretical and in practical perspective, presented business process modelling in this paper seems to enables cost measurement, increase in management efficiency of space, medical resources, personnel engagement and improving service quality. In our further research, we will develop an actual ABC method model for calculating costs at Clinic X and then for the entire hospital. This approach will enable us to see overlapping in processes and sub processes for the entire hospital.
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