Dynamic Capacity Management for Healthcare: Advanced Methods and Tools for Optimization, 1st Edition (Hardback) book cover

Dynamic Capacity Management for Healthcare

Advanced Methods and Tools for Optimization, 1st Edition

By Pierce Story

Productivity Press

226 pages | 33 B/W Illus.

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pub: 2010-12-08
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While hospitals can learn from other industries, they cannot be improved or run like factories. With work that is more individualized than standardized, and limited control over volume and arrivals, even the leanest-minded hospital must recognize that healthcare systems are more dynamic than nearly any work environment.

Written with the creativity needed to navigate the rapidly changing landscape of healthcare, Dynamic Capacity Management for Healthcare: Advanced Methods and Tools for Optimization presents the unique new tools, methodologies, and thinking required of healthcare systems that want to survive and thrive in a reduced reimbursement, higher-cost world. Demonstrating his approaches and recommendations through case studies specific to the complex issues of healthcare delivery, Pierce Story, a long-time and passionate healthcare operations expert, shows how hospitals and health systems can make leaps in performance in an environment in which both financial and human resources are shrinking as expectations for clinical perfection continue to rise.

Through its unique approach to the dynamic management of complex care systems, this volume raises the bar for what is possible. This text presents an excellent opportunity for healthcare’s change agents to meet the challenges and responsibilities of our day.


Pierce Story has added an important chapter to the growing body of literature on healthcare performance improvement. His theme of managing effectively to actual demand is compelling, and the contention that healthcare leaders should not be dogmatic about the methods or tools of continuous improvement is right on target.

—Pat Hagan, President and COO, Seattle Children’s Hospital

Why does every healthcare improvement project we undertake fall short of our intended goals? We have tried all the techniques and tools of other industries and still cannot achieve the desired outcomes. Despite heroic efforts, patients wait – that is the end result. They wait everywhere – and costs, counted on a variety of scales, continue to mount. What element is missing? The answer is dynamic demand capacity matching and management. Within this book, you begin the journey of understanding how the protean interdependent relationships unique to healthcare delivery, each with their own variability, combine to form an intricate ballet that is actually predictable and manageable. This book is a must-read for anyone engaged in healthcare improvement, whether you work in a clinic, hospital, or healthcare system.

—Keith Messner, MD, MBA, BSN , Emergency Physician, Healthcare Transformation Medical Director, Cape Fear Valley Health System. Fayetteville, North Carolina

Healthcare is facing a huge challenge in reforming delivery predicted on changes and incentives in payment. Without revamping dynamic delivery systems to reduce and to reallocate current costs, chaos and disruption will likely occur. We need the analytical tools and creative mindset outlined in this book to help guide us on the path to reform. Thanks for the knowledge and for the encouragement to get it done.

—Mike Sack, CEO, Hallmark Health

Table of Contents

Prologue: Kenji’s Story

Preface: Blasphemy


1. Introduction

A Child of Our Own

Dynamic Capacity Analysis, Matching, and Management (DCAMM): Concept Overview

A Caveat to the Text


2. Variability: Killer of Capacity

The Look and Feel of Variance

The Deception of the Average

System Demand, Patterns, and Variability

Patterns in Demand Variability

The Importance of Ranges

Probability of Outcomes

Variability, Ranges and Patterns, and Predictive Analytics

Outliers and Break Points

Patterns, Demand, and HODDOW WOMSOY

Attribute Variation

Variability and Evolution

Summary: Variability and Demand


3. Interdependencies


Interdependencies in the Current PI Methodologies

The Missing Elements

The Biggest Missing Element: Variability

Interdependencies and Variability: The Origins of Dynamism

Dynamism and Systems Analysis

Dynamism and Evolution

Why Not a "Live" Test, PDCA, or Kaizen Event?

Dynamism in Systems Thinking: An IOM/NAE Perspective

Tools for Interdependency Analysis



4. DCAMM Introduction

Capellini: The Better Spaghetti

Capellini and Hospital-Wide Flow

Dynamic Capacity Analysis, Matching, and Management (DCAMM): Introduction and Refresher

Capacity Entitlements and Acceptance Patterns

Optimized versus Excess Capacity

Summary: Why DCAMM Is Necessary


5. Predictive Analytics

"Managing To"

Simulation Models: The Tools of DCAMM and DPA

A Word about Modeling Assumptions


So What?

What-If’s and Model Outputs

Effective Model Use and Learning from DPA

Time Frames

Simulation and the Creation of Creativity

Strategic Analysis Using DCAMM

Model Scale

The Community Demand

A Word on Real-Time Data and Patient Tracking Systems



6. Demand Components: The Emergency Department

Communal Demand Recipients: ED as a Source of Downstream Demand

Diving into the Patterns

Arrivals and the Debates on Predictability

The ED and DCAMM: Using Patterns to Manage the System

Other Demand Patterns

Case Studies and Sample Outputs: Possible Solutions for ED Flow Issues

Eyeball Disposition

Impact on DCAMM Analytics

Physician on the Front End

Result Waiting Area

Use of Cardiac Markers



7. Surgical Services and DCAMM Analytics

Surgical Services and Downstream Demand Analysis

OR TAT’s and First-Case Starts

Chasing the Rabbit in the OR

Surgical Smoothing and Systems Thinking

Case Length Variation and Analysis

Schedule Analytics, the DCAMM Way

Case-Fit Scoring

So What? We Get by Just Fine Doing What We Are Doing

Downstream Demand and Scheduling

Capacity Entitlement and Surgical Services

Surgical Services Demand and Workload Analytics



8. Up–Down–Up: Creating a Systems View from a Component Perspective

UDU, Processes, and Design Parameters

Design and Component Optimization

Facilities, Communities of Care, ACOs, and Capellinis


9. Capacity Patterns and Analytics for DCAMM

How Much Is Enough?

Capacity as a Single Number

Tips on Making Capacity Available

Acceptance Patterns and Capacity Entitlement

The Highly Constrained Environment

Discharge by X

Outliers within Outliers

Bed Huddles, Acceptance, and Entitlement

Bed Huddles and the Occasional Outlier (Demand) Day



10. Dynamic Resource Allocations, Dynamic Standardization, and Workload Analytics

The Old Way of Creating Unit Capacity

The New Way

Workload Analysis: Two Activity Boluses

From Admit and Discharge to Census

Workload and Workflow

A Word on Variability

Task Allocation

Dynamic Standardization

Dynamic Resource Allocation

Break Points and Task Allocations



11. A Word on Mandated Nurse–Patient Ratios

Dynamic Staffing

Current Legislative Efforts


12. Outlier Management and System Balance

Outlier Management

Outlier Management

Dynamic Systems Balancing





Epilogue: Kenji’s Story (Continued)

About the Author

During his 20+ year healthcare career, Pierce Story has dealt with complex systems redesign, operations improvement, and performance analysis throughout hospitals and health systems. Pierce brings years of experience, unique perspectives, and new concepts to chronic disease management, capacity management, patient care, and health system redesign. Having developed several new applications and toolsets for the analysis and redesign of key clinical operations and patient care capacity strategies, Pierce understands the needs of the industry and the failings of traditional solutions. His vision is a new way of managing the provision of healthcare in the United States.

Pierce has a Masters Degree in Health Policy and Management from the Muskie School of Public Policy in Portland, Maine, and is trained in both Six Sigma and Lean methodologies. Pierce is also a Diplomate, Past President, and active member of the Society for Health Systems, a volunteer organization of over 900 healthcare performance improvement specialists and engineers. He is a member of the Leadership Council of the American Society for Quality’s Healthcare Division.

Subject Categories

BISAC Subject Codes/Headings:
BUSINESS & ECONOMICS / Industries / Service Industries
MEDICAL / Administration