Hospital Process Orientation From An Operations Management Nursing Essay

Hospitals are aligning and integrating their care processes horizontally in order to meet the modern market requirements. An approach to achieve this is to become more process-oriented. Process orientation (PO) means focusing on begin-to-end processes instead of placing emphasis on functional and hierarchical structures. Although research interests in hospital PO are growing, no research has been directed towards a systematic development of a measurement tool to assess PO from an operations management (OM) perspective by addressing the alignment, integration and coordination of activities within patient care processes.

Objectives. -To identify and operationalize constructs to measure PO in hospitals in OM terms and develop and practically test a new measurement tool for Hospital Process Orientation Operationalization (HPOO).

Design. -Multicenter, exploratory case studies.

Setting. -Ophthalmic practices of three different types of Dutch hospitals: one large university hospital, one large eye specialty hospital and one large general hospital.

Participants. -A total of 26 participants from three disciplines: management, team leaders and health care professionals/ophthalmologists.

Results. -39 items distributed over the five dimensions of an existing instrument were formulated to create the new HPOO measurement tool to assess and measure the degree of PO within hospitals. The application of the HPOO measurement tool, the analysis of the scores and interviews with the participants resulted in the possibility to identify differences of PO performance and the areas of improvement – from a PO point of view – within each hospital. The result of the refinement of the measurement tool/items after practical testing is a set of 41 items (2 new items were added after testing) to measure the degree of PO from an OM perspective within hospitals.

Conclusions. -By developing and practically testing a new and more reliable measurement tool, this research improves the understanding and application of PO in hospitals. In addition, this research identifies specific future research directions to objectify the assessment and measurement of PO in hospitals.

Keywords. – Health services, Business Process Management, hospital process orientation, measurement tool, operations management

Introduction

Hospitals face increasing pressure to reduce costs, improve operations and provide evidence of the quality and efficiency of their organizations (Mango & Shapiro 2001, Kujala et al. 2006). This dramatic change has led to an increasingly competitive health care industry (Swayne et al. 2008). As competition intensifies, service quality, patient satisfaction and efficient resource management are turning into important indicators for healthcare delivery performance (McDermott & Stock 2007, Cowing et al. 2009). As a result, healthcare organizations have started to adopt many of the management principles and techniques that originate from the manufacturing and service industries to respond to and meet the modern healthcare market demands (Walston 2004, Langabeer 2009, Hellstrom et al. 2010). An example of the adopted techniques is business process management (BPM), and its associated managerial practices such as business process reengineering (BPR) and business process orientation (BPO). BPM is a best practice management principle that helps companies sustain competitive advantage by improving business processes and ensuring that the critical activities that affect customer satisfaction are executed in the most effective and efficient manner (Hung 2006).

From an operations management (OM) perspective, process management involves the design, control, improvement and redesign of processes (Silver 2004) and it consists of:

BPO efforts: to view, map and manage business processes by creating a management structure for the processes that span across departments and by harnessing mechanisms for continuous improvement (Hellstrom & Eriksson 2008, Armistead & Machin 1997);

BPR efforts: to incrementally or radically change processes by identifying and taking advantage of value creation opportunities to optimize productivity by increasing throughput of a process (volume or throughput time), reducing costs and/or variability (Childe et al. 1994, Langabeer II 2008).

Regardless of whether the organization is applying the BPM concept for the purpose of BPO or BPR, it is concerned with the management of its business processes (Armistead & Machin 1997, Kohlbacher & Gruenwald 2011). As organizations accumulate efforts in process management and process improvements, they gain experience and become more process-oriented. This implicates that the process-oriented approach in some organizations will be more mature than others. But how can a hospital identify whether it is process-oriented or not? And how can a hospital measure the degree of process orientation (PO)?

In this paper, we investigate PO from an OM perspective in order to develop a new measurement tool for Hospital Process Orientation Operationalization (HPOO). First we present a review of the literature on PO in section 2 in order to:

introduce and conceptualize the meaning of PO for organizations and more specifically for hospitals;

identify existing method(s) to study and measure the extent of PO.

The review of the literature assisted the identification of gaps within current research which in turn was used as input for the development of the new HPOO measurement tool. Section 3 describes the research approach. In section 4, the operationalization of the PO theory for hospitals and the development of the HPOO tool will be discussed. First the measurement tool most commonly used to measure PO will be examined: the BPO instrument developed by McCormack (1999). Afterwards, we incorporate the operationalized components of PO into the five dimensions of the McCormack instrument. At last, we present a holistic view of BPM which integrates the dimensions of PO and present the HPOO measurement tool.

In section 5, the empirical results of the HPOO measurement tool testing by means of the three case studies are presented. In section 6, we discuss the results of the case studies. Based on the results of the case studies and conclusions of this study, recommendations for further development of the measurement tool are provided in section 7.

Review of process orientation literature
Background and rise of the PO movement

In 1990, Michael Hammer (1990) and Thomas Davenport & James Short (1990) published their articles on the two new tools that may boost organizational performance: information technology (IT) and business process reengineering (BPR). Even though the authors had different principles in mind on how organizations should utilize these new tools, both articles pleaded for leaving outdated process designs, work & communication mechanisms and fundamental assumptions behind, which are contravening operations. According to the founding fathers of PO the combination of IT and BPR, two natural partners, will in their own words enable the reengineering and development of modern business processes. Business processes with a broader, cross-functional and customer-driven scope (Hammer 1990, Davenport & Short 1990).

PO in the 21st century

Different factors such as strategy, technology, people, etc. influence organizational performance, but the organizational capability of managing and improving the organization’s business processes combine all the separate organizational factors and represent, thereby one of the most important determinants of organizational performance (Deming 1981, Thorp 2003, Kohlbacher & Gruenwald 2011). McCormack & Johnson (2001) defined PO as ‘An organization that, in all its thinking, emphasizes process as opposed to hierarchies with special emphasis on outcomes and customer satisfaction.’ The horizontal, process-oriented, organization emphasizes the need to reshape the internal boundaries and break down vertical silos of the organization in order to make sub units work together horizontally. The design and arrangement of the organization along horizontal workflow processes aiming at linking organizational capabilities to customers and suppliers will improve internal coordination and communication (Anand & Daft 2007). In this context, PO considers a process as both a business imperative and a means of understanding and explaining business activities – the way customer requirements are being transformed into goods and services (Smart et al. 2009). PO establishes an approach to link organizational strategy to implementation within operational processes and a manner of putting external emphasis on outcome and customer satisfaction rather than internally driven hierarchical structures or functions (Armistead 1999). By focusing on activities that create value for customers, and view the organization as linked chains of activities, PO delivered a promising solution for a variety of perceived organizational problems in the healthcare industry and other functional structured organizations (Hellstrom & Eriksson 2008, Hellstrom et al. 2010).

Process orientation in hospitals

Hospitals and healthcare organizations in general have started to move from relatively functional and hierarchical structures to structures focussing on cross-functional teams and flattened organizational structures (Vos et al. 2009). The central idea is that the transition to become more process-oriented will lead to more patient-centred care, cost reductions, and quality improvements (Vera & Kuntz 2007, Kohlbacher 2010). As illustrated in figure 1, the process to become more process-oriented involves all levels of organizational design: governance, structure design and delivery system (Degeling et al. 2004, Lega 2007, Vos et al. 2010). For years, the organization principles and structural design of hospitals have been labeled as a professional bureaucracy. As a result, the health service delivery processes in hospitals are frequently complex and fragmented across departments because they are being organized according to medical skills/specializations, and not according to the way/process patients are cared for (Lee & Clarke 1992). This leads to a lack of control and coordination of the care activities within a patient care trajectory, which in turn affects the efficiency and the quality of care delivery (Nyssen 2007, Vos et al. 2011). The traditional functional structure of hospitals will have to be replaced by a structure which takes a holistic and systematic view of healthcare delivery as a service business process and enables the optimization of healthcare delivery performance (Parnaby & Towill 2008). This means restructuring the health delivery processes in hospitals into integrated care trajectories for nominated patient groups, which are manageable, measurable, and therefore accountable (Berg et al. 2005, Jain et al. 2006). In order to achieve this, the way clinical work is conceived, performed and organized will have to be altered.

Insights from different fields (not only medicine) will have to be combined in an integrated approach (care program) in order to attain the full potency of clinical, organizational and interpersonal processes involved in each patient care trajectory, for example, treatment of glaucoma or replacement of the hip joint (Degeling et al. 2004, Berg et al. 2005).

Figure 1: Governance, structure design and care delivery in a functional hospital or in a process-oriented hospital (based on Degeling et al. 2004, Vos et al. 2010)

Existing tools for measuring process orientation

Different authors have addressed the question of conceptualizing and measuring PO. Some authors have addressed it from a management & organization theory, others from an information systems perspective and Kohlbacher & Gruenwald (2011) were the first to assess PO from a general, multidimensional perspective and have created and validated a model for the manufacturing industry to assess PO on the basis of PO constructs (Table 1). From a management & organization theory perspective, PO is a firm-level construct that supports the streamlining of (core) processes by more closely linking functional units. From an information systems perspective, PO is based on the information flows associated with the process activities considering that any process with distinct tasks and activities requires information to progress and move forward (Andersson et al. 2003, Berente & Vandenbosch 2009). The information flow in hospitals is dependent on their information system to collect and spread large amounts of data among various disciplines within a hospital.

While interdepartmental dynamics (management & organization theory) and information flows (information systems theory) are important factors for cross-functional process management, these levels of assessing PO do not address the design, planning, and control (improvement) of aligned, integrated and coordinated process

activities (OM perspective).

Patient care processes often involve several medical disciplines, each with their own characteristic attitude and work approach (Mans 2011). The design, planning, and control of aligned, integrated and coordinated activities within patient care processes is therefore essential for hospital PO since the sequential/serial modelled process activities compromising several medical specialties require coordination to manage the interdependencies of the process activities (Malone and Crowston 1994, Mans 2011). As a process is defined as a ‘lateral or horizontal organizational form, that encapsulates the interdependence of tasks, roles, people, departments and functions required to provide a customer with a product or service’ (Earl, 1994), and it is known that a process consists of (information) flows and activities (Hammer & Stanton, 1999), we can state that there is an overlap between the management & organization, information systems and OM perspective on processes. By specifying the theoretical implications of PO for hospital operations, we will be able to identify characteristics of PO for hospitals and derive constructs to assess PO on the level of process activities and measure the integration, alignment and coordination between these activities.

Table 1: Existing tools for measuring PO

Deficiencies of the three existing tools to measure hospital process orientation

Kohlbacher & Gruenwald (2011) stated that the PO literature is adopting the concept without questioning its scope. Consequently, PO is usually being measured with proxy variables or unidimensional measures which are insufficient to capture the richness of such a complex concept (Kohlbacher & Gruenwald 2011). As a result, PO constructs/measures are generally broad and ambiguous. For instance, Vera & Kuntz (2007), who were the first to investigate whether the implementation of process-based organizations in hospitals is advisable, used organizational items that were very broad. As a result, measuring their items (e.g. clinical pathways, performance-based payment) leaves much room for measurement error and doesn’t measure the degree of PO justifiably. Gemmel et al. (2008) who developed the first measurement tool for hospital PO came across other shortcomings by not defining the PO scope. Their measure did not include all five dimensions of PO specified by McCormack (1999). The measurement tool developed by Gemmel et al. (2008) was only based on the three dimensions (Process View, Process Jobs and Process Measurement and Management) that were validated by McCormack & Johnson (2001) for the e-businesses. But this particular fact cannot be self-evident to the hospital setting where care processes are delivered by different specialties and a framework to define the process management team (Process Structure) and adequate team effort, interdisciplinary communication and interpersonal skills (Customer-focused Process Values and Beliefs) are crucial factors. In fact, according to Armistead (1996) BPM can only work when attention is given to people, processes and systems in the context of the organization structure and organizational culture. Another deficiency is that the measurement tool of Gemmel et al. (2008) focused on health care professionals only while process management is intended to link operational processes (patient care processes) to direction setting, managerial and support processes (Armistead & Machin 1997).

At last, the model developed by Andersson et al. (2003) is not suitable to measure the alignment, integration and coordination between process activities because their model is intended to support the development of health information systems (HIS) embedded in process-oriented healthcare work.

Hospital Operations Management Theory

Assessing PO from an OM perspective deals with different deficiencies of existing measurement tools brought forward in the previous sections. The OM perspective adds a conclusive scope (systems thinking and systems engineering) which links strategic choices to operational, managerial and support processes (Armistead & Machin 1997). Operations in hospitals can be grouped into operations types which utilize the same resources (input). From a logistic point of view the homogeneity of operations types lies in the underlying sequence, timing and execution of patient care activities by the hospital staff (MA?ruster et al. 2002). According to Vissers (1994) the identification of key operations corresponds to the first stage in ‘the analysis, design, planning and control of all the steps necessary to provide a service for a client’. The second stage is to understand the ways in which operations use and consume resources (Vissers 1994). These two stages are the two essential elements of operations. When the elements of operations along with their corresponding duration and workload are added together, it generates the overall set of transforming processes required to deliver a product/ service for a client. Consequently, a particular health service can be produced by simultaneously linking the individual diagnostic & therapeutic activities and the resources (inputs) that they use (MA?ruster et al. 2002, Vissers & Beech 2005). Vissers & Beech (2005) named this a chain or overall process and defined it as ‘the chain of operations that need to be performed to produce a particular health service.’ The awareness of the ‘links’ in the chain of operations enables reflection on key characteristics of patient care processes (e.g. elective/appointment, semi-urgent, urgent, complexity, variability, length of a process, volume, decoupling points, shared resources and predictability) and helps to establish appropriate control systems which enlightens decisions about the allocation of resources in order to achieve operational effectiveness. Operational effectiveness is dependent on the efficiency of resource inputs and usage, and the effectiveness of overall management (Langabeer II 2008). A hospital that is operationally effective is creating value by converting inputs (resources) into efficient and effective outputs (healthcare services), see Figure 2.

Figure 2: The Operations Management Process (Langabeer II 2008)

By designing and delivering healthcare services to meet the needs of patients in the most effective and efficient manner OM can contribute to the evolving ‘climate’ in which healthcare services are delivered (Vissers & Beech 2005). Hence, this research offers an approach to address the shortcomings of current research discussed in the review of the PO literature by examining the development towards a process oriented organization of hospital care from an OM perspective in order to develop a new measurement tool to assess hospital process orientation in more operational terms.

Methods

The conventional research approach is to develop a measurement tool first and subsequently provide evidence for the statistical validation. But given the exploratory nature of this study where the conceptualization and measurement of a rich concept (PO) will be executed from a new angle (OM perspective) in highly complex institutions with complex environments (hospitals), it was more appropriate to practically test the measurement tool than to statistically validate a possible deficient measurement tool.

During the development phase, a new measurement tool based on existing theories, concepts and measures was developed. The five dimensions of the most frequently used instrument for measuring PO, the McCormack’s BPO instrument, were conceptualized and operationalized to fit the hospital setting. The conceptually developed measurement tool was pilot tested in a non-participating general hospital by an internal management consultant, an ophthalmology department manager and an ophthalmologist. Since we had indications that the importance of each dimension/item of PO varies (McCormack & Johnson 2001, Reijers 2006), we held an OM expert meeting (focus group) to develop a scoring system for the items in our HPOO measurement tool.

After the development phase, we empirically tested the measurement tool by means of a small number of multiple (in-depth) case studies. Case selection should be based on replication logic rather than sampling logic, when building or testing a theory from case studies (Voss et al., 2002). For this reason, the criteria for case selection were: 1. predicts similar results and 2. produces contrary results but for predictable reasons. To correspond to this criterion, this research studied the same branch of medicine, i.e. ophthalmology, in a variety of contexts.

Ophthalmology is an ideal healthcare practice for the development and testing of the HPOO measurement tool due to the fact that it is a comprehensive area of medicine with well-defined processes (de Korne et al. 2010).

The case studies will be performed in the ophthalmic practices of three Dutch hospitals: one large university hospital, one large eye specialty hospital and one large general hospital.

The choice to include three different types of hospitals into our research is for the purpose of comparing how three different types of hospitals perform on the PO assessment. In addition, applying the HPOO measurement tool to different hospital environments will improve its generalizability (Wacker, 1998).

Since the objective of this study was to identify design requirements for a new measurement tool, to develop it and to give recommendations for further development of the tool, we used a limited number of participants to empirically test the new HPOO measurement tool. For this reason, we only included hospital staff able to state and illustrate the organizational and operational system. The participants to this study are from three disciplines: management, team leaders and health care professionals/ ophthalmologists. To test whether the participants’ perception of the extent of PO in their hospital corresponds to quantitative data on hospital operations, we collected data on thirteen indicators for hospital production, service and available resources/capacity (Appendix 1).

Hence, the case studies allowed a full understanding of the nature and complexity of the complete phenomenon (PO) from which recommendations to improve the developed measurement tool for the hospital setting could be given.

Measurement of process orientation

According to Hellstrom et al. (2010) processes can be studied from an organization, division or department perspective. This research will study processes from the ophthalmology department perspective of the four participating hospitals and try to identify how these processes fit in the organization (hospital) perspective. Multi-site case studies aiming to identify, describe and link critical variables should be performed by applying structured interviews or survey questionnaires as techniques to collect data (Handfield & Melnyk 1998, Stuart et al. 2002). Due to the fact that PO is a difficult and complex concept to measure, we chose not to apply the large sample survey methodology (e-mail or online surveys). The disadvantages and limitations of applying this method did not fit the objective of our study and we did not want to follow the footsteps of our predecessors, i.e. Gemmel et al. (2008). Gemmel et al. (2008) developed and provided extensive statistical evidence for the validation of a measurement tool for hospital PO. However, their research and tool did not provide more clarity to the assessment of PO in hospitals. Therefore, we opted for a combined method of collecting data. First, the participants filled in the questionnaire which consisted of 39 measures/items. For each measure, participants were asked to provide the extent to which they agree or disagree with the subject using a four-point Likert scale. Afterwards, the filled-in document was discussed with every participant according to a semi-structured interview. The combined approach allowed comprehensibility testing of the items (statements) of the HPOO measurement tool and the verification of the respondents “perceptual” estimate/response. Thus, the combined method is more likely to yield highly productive research output with lowered risk of biased findings (Boyer & Swink 2008). In analyzing the descriptive results, the nominal Likert scale was converted into values of 0-3, retaining, respectively, the ranking of responses with 0 for “completely disagree” and 3 for “completely agree”.

Hospital Process Orientation Operationalization: development of the measurement tool
McCormack’s BPO instrument

McCormack (1999) presented PO as a concept which consists of five dimensions: Process View (PV), Process Structure (PS), Process Jobs (PJ), Process Measurement and Management (PMM), and Customer-focused Process Values & Beliefs (PVB). The five dimensions have been used, tested and validated throughout the years (McCormack & Johnson 2001, Lockamy III & McCormack 2004, McCormack et al. 2009). Based on their definitions, we operationalized the five dimensions as follow:

Process View (PV) – Personnel on all levels of the organization has knowledge and understanding of process steps, activities and tasks of cross-functional processes as a result of a thorough documentation (visual and written) of strategic to operational and begin to end processes and a widespread vocabulary which allows different job functions to communicate.

Process Structure (PS) – Supporting framework for the structure in which the other domains operate; functional “compartments” are altered and the process management is defined.

Process Jobs (PJ) – Jobs focus on entire processes and have horizontal (instead of vertical) responsibilities; cooperation to achieve common targets.

Process Measurement and Management (PMM) – Measures to continuously evaluate the performance of processes and the application of process improvement techniques to manage processes and reward improvements.

Customer-focused Process Values & Beliefs (PVB) – Commitment to a collective endeavour to focus on customers and continuously improve the business processes within the organization.

OM operationalization of the PO theory for hospitals

Process View (PV)

The PV dimension is to encourage the personnel to view individual actions as links in a chain of events crossing traditional functional barriers – viewing the organization as an integrated set of processes (Armistead 1996). To accomplish PV, organizations must develop a system architecture in which understanding of the organization and improvement opportunities are established by identifying and mapping the (high-level) business processes (Hellstrom & Eriksson 2008, Cinquini et al. 2009). PV is the first step towards PO; to begin to look at the organization in a new way by linking business strategy and customer needs to all aspects of process design and management by providing a clear view of the interrelationships inside and outside the organization and by establishing a common language for change management (McCormack & Rauseo 2005). Linking business strategy and patient needs to process design, means designing processes to deliver health services to target patient groups. From an OM perspective, this dimension was conceptualized for the HPOO measurement tool as ‘the progress towards organizational focus on integrated business processes by designing, documenting and managing begin-to-end patient care processes to deliver care to defined target patient groups.’ The PV dimension was operationalized and measured with 11 items.

Process Structure (PS)

Following the principle ‘structure follows process’ a process-oriented organization must adapt its structure to the PV (Vera & Kuntz 2007, Kohlbacher & Gruenwald 2011). The key in process-oriented organizations is to identify how different work activities are holistically accomplished in the organization, map and manage these cross-functional processes and use multidisciplinary process teams to carry them out (Anand & Daft 2007). The use of team structure empowers staff, decentralizes decision-making, and allows greater learning across the organization. Interdisciplinary communication and collaboration between different hospital units and medical disciplines are prerequisites for PO. The interdisciplinary cooperation along the patient treatment processes requires the support of information technology (IT) for the collection, management and spreading of information and knowledge about medical treatment processes and organizational processes (Lenz & Reichert 2007). The correlation between medicine, organization and information is high. Therefore, organizational structures and IT systems need to offer optimal support to both medical treatment processes and organizational processes. Some organizations are not able to align all activities along processes. For that reason, Vanhaverbeke & Torremans (1999) suggested a multidimensional structure (combination of functional and process-based structure) with process ownership as a solution for organizations (such as hospitals) that cannot adopt a purely process-based structure. The existence of process owners is the most visible difference between a process-oriented and a traditional organization (Hammer & Stanton 1999). A process owner must have leadership experience and the authority to act in the interest of the process and take all measures necessary to coordinate and improve the business process (Hinterhuber 1995). The way a process-oriented organization is structured needs to be supported and promoted by top and middle management also (management commitment to PO); otherwise the process oriented initiatives are less likely to secure benefits (Edwards et al., 2000). This dimension was conceptualized from an OM perspective as ‘a organizational structure and IT system fit to coordinate, manage and improve patient care processes’ and was operationalized and measured with 7 items.

Process Jobs (PJ)

Process performers must have appropriate knowledge of how to execute the process; otherwise they won’t be able to implement the process design (Hammer 2007a). Emphasis on cross-skill training and the importance of gaining wider experience by working with different people within different processes are both vital factors to align employees’ expectations and aspirations with the process-oriented organization (Armistead 1996). The knowledge management processes which a process-oriented organization must focus on are those for the creation of knowledge, transfer & sharing of knowledge and the embedding & use of knowledge (Armistead 1999). According to Hammer (2007a) employees must be skilled in team work, problem solving, process improvement, and decision techniques. Employees must also embrace the collaboration and the continuous improvement mentality, and feel responsible for these activities. Furthermore, the organization must have a cadre of experts in change m