The Logics of Healthcare The Professional’s Guide to Health Systems Science

Chapter 1 Introduction

• The healthcare crisis

• Technology as a driver of disruption
• Misalignment of demand and supply: non-communicable lifestyle-related problems meet reactive medicine
• The unstable triangle: patient-provider-payer
• Why Operational effectiveness (Lean) is only a partial solution

• Unsorted complexity

• Segmentation reduces complexity

• End of import dominance: healthcare needs management methods that build on its own logic of production

Chapter 2 Healthcare as a service industry

• Industry or cluster?
• The definition of services

• Service-dominant logic and co-creation of value
• The Resource Integration model

• The logic of production: risks and uncertainties between output and outcome
• The Power Gap between doctors and patients

• Professional organizations and bureaucratic logic
• Markets don’t work – for now

• Integration (service design) and coordination (service production)
• Open and closed systems
• Service machines

Chapter 3 Methodology

• Concepts and constructs
• Clinical medicine as a technology

• The context, intervention, mechanism, outcome – model (CIMO)

• Physical and behavioral technologies

• Ontology, epistemology, dynamics, and technology
• Known unknowns and unknown knowns

• Designing service machines

Chapter 4 Demand-Supply-based Operating Platforms (DSO)

• The defining demand variables: urgency, severity, arrival
• The defining supply variables: technology (what can be done), patient behavior, economic constraints
• The seven DSOs

• Prevention: something that could have happened does not happen
• Emergency: save and stabilize
• One-visit: not urgent, not severe, convenient care
• Elective: scheduled precision procedure
• Cure: iterative process towards a preferable end
• Care: chronic or terminal
• Project: very complex and costly

• Time – perspective as a distinguishing variable
• Operating modes and production systems

• Single-function, integrated multi-function, modular, mode

• DSO as a managerial platform with clinical apps (modules)
• Industry comparisons

• Prevention: finance and insurance
• Emergency: news media, military
• One-visit: fast food
• Elective: auto assembly
• Cure: R&D, marketing
• Care: industrial maintenance, facilities management
• Project: construction, shipbuilding, software development

Chapter 5 The Business Model Canvas (BMC)

• Value proposition

• Output, outcome, benefit, value
• Quality in healthcare

• Customer segments

• Clinical and demographic segments
• The focused hospital

• Customer channels

• Facility- and field-based services
• Regional service networks
• The service distribution trilemma: time/location access, specialization, variety

• Customer relations

• Patient choice
• Patient empowerment

• Key activities

• Tasks, workflows, processes
• Process types: standard, routine, non-routine
• Flow efficiency

• Key resources

• Capacity utilization and resource efficiency
• Economies of scale in healthcare
• The healing environment

• Partners

• Networks and ecosystems
• Supply chains

• Cost structure

• Personnel, facilities, equipment, supplies

• Revenue model

• Global budget, capitation, fee-for-service, bundled payment
• Incentive dilemmas

Chapter 6 The DSOs as distinct business models

• Each DSO has a basic BMC
• DSO – specific general BMCs (table)

Chapter 7 DSO ion practice

• DSO and the patient journey: single- and multi-DSO journeys

• Handovers between DSOs

• Single- and multi-DSO – organizations
• How clinical modules switch mode
• Single-DSO innovations (cases)
• The DSO-model in other industries: telecom, facilities management

Chapter 8 Summary, conclusion and discussion

• A clever model, but so what?
• The healthcare crisis in a DSO-perspective
• DSO and hospital design: the disintegration of the General Hospital
• DSO and health policy
• Known unknowns and future research

Biography

Paul Lillrank has been Professor of Quality and Service Management at Aalto University since 1994. He has served as the Head of the Department of Industrial Engineering and management for eight years and been Academic Dean of the school’s MBA program. Aalto University was formed in 2010 through the merger of Helsinki University of Technology, Helsinki School of Economics, and Helsinki School of Art and Design.

Paul Lillrank received a PhD in Social and Political Sciences at Helsinki University in 1988 after spending six years as a post-graduate student in Japan where he researched quality management in Japanese industry. After graduating he joined The Boston Consulting Group in Tokyo and later in Stockholm, returning to academia in 1992 as Affiliated Professor at the European Institute of Japanese Studies at the Stockholm School of Economics. He has been visiting professor at the University of Toyko, served as program director at College des Ingenieurs in Paris, and teaches regularly at the Indian Institute of Technology, Kharagpur.

Professor Lillrank has conducted research in several service industries, such as software, telecom, airlines and retailing. During the recent past his focus has been in healthcare. He has been a pioneer in introducing industrial management methods to the study of healthcare service production. He has co-founded The Institute of Healthcare Engineering, Management and Architecture (HEMA), and the Nordic Healthcare Group (NHG), a consultancy. He has been a frequent speaker and advisor to several healthcare producers and government agencies. His research interests are in Healthcare Operations Management, particularly operating modes, process coordination, knowledge integration through mobile solutions, and regionally supply systems. A current topic is innovations in healthcare management, particularly frugal innovations in the Indian context.