Week 5 Assignment “ Forecasting Overview  Using the Northern College Health Services visit volume

Week 5 Assignment – Forecasting

Overview 

Using the Northern College Health Services visit volume in Appendix 6-1 on page 113 of the textbook, for this assignment, you will be providing a forecast of the number of clinic visits for November 2008 using the average change, confidence interval, average percent change, moving averages, and exponential smoothing forecasting methods. Use the Internet or Strayer Library to research at least two examples of the forecasting methods being used in health services organizations. 

Instructions 

Write a 2–3-page paper in which you: NO PLAGIARISM PLEASE!

1. Explain each step in the forecasting process for each method. 

2. Provide a brief summary of your researched health services organizations implementing the forecasting methods. 

3. Provide a forecast of the number of clinic visits for November 2008 using each method of the forecasting process. 

Must show work on how you got answers not just the numbers!

4. Conclude which forecasting method provides the best forecast and provide a rationale for your conclusion.

Include references and don't forget to put the intext citations in the paper.

Essentials of Applied Quantitative Methods for Health Services Managers

James B. Lewis, ScD Associate Professor of Health Management & Policy

Robert J. McGrath, PhD Assistant Professor of Health Management & Policy

Lee F. Seidel, PhD Professor of Health Management & Policy

Department of Health Management and Policy College of Health and Human Services

University of New Hampshire Durham, New Hampshire

Jones and Bartlett’s books and products are available through most bookstores and online booksellers. To contact Jones and Bartlett Publishers directly, call 800-832-0034, fax 978-443-8000, or visit our web site, www.jbpub.com.

World Headquarters Jones and Bartlett Publishers 40 Tall Pine Drive Sudbury, MA 01776 978-443-5000 [email protected] www.jbpub.com

Jones and Bartlett Publishers Canada 6339 Ormindale Way Mississauga, Ontario L5V 1J2 Canada

Jones and Bartlett Publishers International Barb House, Barb Mews London W6 7PA United Kingdom

Substantial discounts on bulk quantities of Jones and Bartlett’s publications are available to corporations, professional associations, and other qualified organizations. For details and specific discount information, contact the special sales department at Jones and Bartlett via the above contact information or send an email to [email protected]

Copyright © 2011 by Jones and Bartlett Publishers, LLC

All rights reserved. No part of the material protected by this copyright may be reproduced or utilized in any form, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the copyright owner.

This publication is designed to provide accurate and authoritative information in regard to the Subject Matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the service of a competent professional person should be sought.

Production Credits Publisher: Michael Brown Editorial Assistant: Catie Heverling Editorial Assistant: Teresa Reilly Senior Production Editor: Tracey Chapman Senior Marketing Manager: Sophie Fleck Manufacturing and Inventory Control Supervisor: Amy Bacus Composition: DSCS/Absolute Service, Inc. Cover Design: Kristin E. Parker Cover Image: © Kheng Guan Toh/Dreamstime.com Printing and Binding: Malloy, Inc. Cover Printing: Malloy, Inc.

Library of Congress Cataloging-in-Publication Data

Lewis, James B. (James Bradley), 1950- Essentials of applied quantitative methods for health services managers / James B. Lewis, Robert J. McGrath,

and Lee F. Seidel. p. ; cm. Includes bibliographical references and index. ISBN-13: 978-0-7637-5871-4 (pbk.) ISBN-10: 0-7637-5871-X (pbk.) 1. Health services administration. 2. Quantitative research. I. McGrath, Robert J., 1967- II. Seidel, Lee F. III. Title. [DNLM: 1. Health Services Administration. 2. Statistics as Topic. 3. Program Evaluation. WA 950 L674e 2009] RA971.L495 2009 362.1068—dc22 2009023884

6048

Printed in the United States of America 13 12 11 10 09 10 9 8 7 6 5 4 3 2 1

iii

Table of Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v

Chapter 1— The Role and Function of Quantitative Methods in Health Services Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Section I: Foundation Competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Chapter 2—Working with Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Chapter 3—Flow Charting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Chapter 4—Time Value of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

Section II: Forecasting Competencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Chapter 5—The Art and Science of Forecasting . . . . . . . . . . . . . . . . . . . . . . 75 Chapter 6—Trend Forecasting Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Chapter 7—Regression Forecasting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

Section III: Designing and Analyzing Systems . . . . . . . . . . . . . . . . . . . . . . . 135 Chapter 8—Analyzing Capacity and Resources . . . . . . . . . . . . . . . . . . . . . 137 Chapter 9—Managing Waiting Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

Section IV: Project Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 Chapter 10—Decision Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195 Chapter 11—Economic Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Chapter 12—Program Evaluation Review Technique: PERT . . . . . . . . . . . 231 Chapter 13—Financial Evaluation of Projects . . . . . . . . . . . . . . . . . . . . . . . 251 Chapter 14—Quality Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271

Section V: An Application of Quantitative Methods . . . . . . . . . . . . . . . . . . 299 Chapter 15—Quantitative Analysis in Strategic Planning . . . . . . . . . . . . . . 301

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 317

v

Preface

Health services managers require a varied repertoire of skills and expertise, includ- ing both qualitative and quantitative elements. The purpose of this book is to bring numerous quantitative methods from other fields, including industrial engineering, operations research, finance, and general systems analysis into the health services arena, and enhance the quantitative skill set of health administration students. The content and “tone” of the book are the result of working with undergraduate and graduate health management students at the University of New Hampshire, as well as elsewhere. The book builds upon our experience that many students lack confidence in their quantitative abilities, and as a result develop a somewhat incomplete set of skills.

The book assumes a basic understanding of algebra, statistics, and financial and managerial accounting as well as familiarity with economics, healthcare organiza- tions, and health services management. Based upon these foundation competen- cies, quantitative methods are presented within a health services administration context. Every effort has been taken to avoid clouding these methods behind alge- braic or quantitative curtains. When doubts exist, we have simplified our presenta- tion. This book is not meant to take the place of more advanced texts in any of the techniques of quantitative analysis presented here. Although the array of quantita- tive methods presented in the text is somewhat eclectic, the topics selected share the characteristic of being routinely used by health services managers. Intention- ally, the book includes basic concepts and foundations—it is essential that students grasp these basics before moving on to applying more advanced analytical tools. As such, the book is not intended to expand a student’s ability to perform health services research.

Our experience also suggests that learning and being able to use quantitative methods require learning experiences designed as loops, not straight lines. Basic points, terms, and calculations need to be repeated to be effectively incorporated into the student’s repertoire. Assuming that students possess complete recall of an earlier course in statistics, for example, is an instructional blunder that jeopardizes the effectiveness of a professor as well as the ability of students to learn.

vi Preface

Most of the quantitative applications presented can be completed using a general spreadsheet program. However, we have avoided particular software applications and instructions on how to use specific spreadsheet programs. After gaining a firm under- standing of the mathematical concepts underlying the quantitative tools presented, students are encouraged to use suitable computer (or even calculator) programs; we feel it is important to gain this firm conceptual understanding first, however. In addition to introducing (or in some cases reviewing) quantitative concepts, the book provides students with an example of application of these tools within the context of completing an external assessment component of a strategic plan. It is hoped that this application provides students with a view of how the quantitative tools are used in practice.

Essentials in Quantitative Methods for Health Services Managers emerged from the interests of three professors searching for a more effective approach to teaching students how to use quantitative methods as health services managers. Students deserve special recognition for helping us through the years to appreciate the difference between teaching and learning quantitative methods and for assist- ing in determining effective teaching and learning strategies. Throughout this book practice as well as understanding is stressed. It is our conclusion that students are better able to incorporate these methods into their professional repertoires when they have had the opportunity to experience and apply these methods in a context related to their professional interests. Exercises have been incorporated into each chapter for students to use to experience a specific method. When we use this book, students are often required to turn in assigned exercises as their ticket into a specific class. Reading about a quantitative method is not the same as using the methods to solve a realistic health services management problem.

Ultimately, of course, developing the comprehensive repertoire of skills needed to be a competent manager of health services is a student’s responsibility; doing this is a complex, ambiguous, and challenging endeavor that spans a career. No single collection of quantitative methods is sufficient to meet this challenge. Hopefully, however, this collection will assist many in developing their basic repertoire.

James B. Lewis, ScD Associate Professor of Health Management & Policy

Robert J. McGrath, PhD Assistant Professor of Health Management & Policy

Lee F. Seidel, PhD Professor of Health Management & Policy

Department of Health Management and Policy College of Health and Human Services

University of New Hampshire Durham, New Hampshire

�

Chapter 1

The Role and Function of Quantitative Methods in Health

Services Management

Learning Objectives

After studying this chapter, you should be able to:

�. Describe how health services managers analyze, design, and implement in a systems context.

2. Differentiate between efficiency and effectiveness as vital managerial interests.

3. Describe how quantitative methods fit into the repertoire of the health services manager.

4. Describe the general systems model in relation to health services.

Learning Objective 1: e xamine H Ow Hea Lt H s er vices m anagers a na Lyze, Design, an D i mp Lement in a s ystems cO ntext

Health administration, as a profession, deals with the management of human, fiscal, physical, and information resources to meet the goals and objectives of healthcare organizations. Survival of the healthcare organization in a competitive environment, as well as characteristics of this survival, involve multiple factors, including the abilities of managers. The challenge is to provide healthcare orga- nizations, and the communities, patients, and clients they serve, with competent managers able to perform the robust and challenging role of manager.

Being a competent manager in a healthcare organization means fundamentally different things depending upon specific role expectations, perspective, and cir- cumstance. Within a healthcare organization, managers are assigned very different functions, each with potentially different definitions of core competency. Manag- ers in the human resources department of a hospital face different management challenges than the managers in the hospital’s planning and marketing department or the financial services department. Different types of healthcare organizations

may require different types of managers. Nursing homes may require managers with different skills and values than public health clinics. Healthcare organiza- tions also may shift their definition of desired or needed management competency because of a shift in their objectives, in characteristics in their environment, or in both. A hospital in the process of affiliating with a regional healthcare system may require different management talents than the hospital intending to remain a solo institution. Definitions of management competency also may change based upon perceived or real changes in the field of management. The competencies expected of professional health services managers encompass a very wide breadth and depth of potential responsibilities, values, interests, and abilities. Health administrators need a broad repertoire of skills to function in this dynamic situation. More specifi- cally, multiple perspectives also exist concerning the role and function of the health manager in a contemporary healthcare organization. Being able to use quantita- tive methods designed to assist managers make decisions is one essential part of this repertoire, regardless of the role and function of any health services manager. Figure �-� is one framework able to integrate many of these perspectives and is based upon the simple recognition that managers need the ability to analyze, design, and implement.

Analyzing, as a core managerial competency, is the ability to discover what is. It involves, for example, discovering the current market share of an organiza- tion. It involves discovering the actual total cost of a specific service rendered by the organization. It involves discovering who does what with what resources to provide a specific service. It involves using forecasting to discover the logical or reasonable future of the organization. The key and defining aspect of analysis is discovery. Sometimes discoveries shift the organization’s goals and objectives. Other times discovery is used to determine whether the organization is meeting and how it is meeting its goals and objectives. To facilitate discovery, quantitative methods provide the manager an analytical road map. Each quantitative method has a unique analytical ability. For example, a method such as queuing theory can only be used to analyze specific types of waiting lines. When incorporated into the manager’s repertoire, quantitative methods provide the manager with useful and robust tools.

Designing, as a core management competency, is the ability to identify and arrange resources in a manner commensurate with goals and objectives. If the goal is to provide a specific service, managers need to be able to design (or redesign) the mix of resources needed to provide the service. The goal of operating a short- stay surgical unit in a hospital requires that a manager identify and arrange the

Analyze Design or Redesign Implement

Figure 1-1 General Management Competencies

2 Chapter �: The Role and Function of Quantitative Methods

resources needed to realize the goal, such as specialized equipment and staff. If the goal is for the organization to retain specific information, then managers must be able to design work processes to capture, report, and store the desired informa- tion. Design as a managerial competency often involves engineering because it encompasses the ability to break down desired capabilities, such as an organiza- tion’s goals and objectives, into requisite components or parts. If the organization desires a new service, it is a manager’s responsibility to design the service by first determining the different mix of human, fiscal, physical, and information resources needed to provide the service, and then specifying exactly how much of each will be needed to provide the service. Design of new work processes, or the redesign of existing ones, involves developing detailed plans so that when the plans are executed the desired capability has been incorporated into the organization. Design also involves developing these detailed plans as to what is needed as well as how the needed resources should be used. Design is performance oriented; the new or revised design must establish the desired performance capability.

Implementing, as a core management competency, is the ability to change the organization. The process of implementation may require the manager to change the behavior of specific employees. It may also involve the ability of the manager to accumulate and operationalize the resources necessary to achieve desired goals and objectives. Whereas design may be the management competency that deter- mines what is needed, implementation is the management competency that installs new or revised elements in the organization. The manager’s repertoire needs to include quantitative methods to assist implementing change within the organiza- tion. These methods include, for example, Program Evaluation Review Technique (PERT). The Program Evaluation Review Technique is a formal method used by managers to plan and control projects. It informs managers of the desired order and schedule of activities needed to be accomplished to realize the overall completion of a project or change within the organization, such as the opening of a new short stay surgical unit in a hospital.

Learning Objective 2: t O Di FFerentia te b etween eFF iciency an D eFF ectiveness as Key m anageria L i nterests

m anaging in the Health s ervices Organization

A healthcare organization is any organization that provides health and medical services to patients, residents, and clients, such as an acute care or specialty hos- pital, a nursing home, an ambulatory care organization, such as a university health services, public health clinic, and a home health agency. The defining characteris- tic in this definition of a healthcare organization is patient care; care provided by

Learning Objective 2 3

4 Chapter �: The Role and Function of Quantitative Methods

physicians, nurses and therapists to prevent and treat disease or infirmity. The mis- sion of these organizations serves to distinguish them as healthcare organizations.

Services provided to patients could include a surgical procedure, diagnostic examination, specialized treatment, or disease prevention or screening program. These services also could be an appropriate meal, a safe and comfortable envi- ronment, or an accurate and timely bill for service. All healthcare organizations provide a range of services and specialize in providing individual patients a par- ticularized array of services based upon a patient’s needs or diagnosis. The central and defining element of all healthcare organizations is the provision of a personal and personalized experience, and high quality health or medical service. As such, a central expectation shared by all health administrators is the expectation that management practice will lead to the efficient provision of effective services to people in need of service.

The interests of managers and the interests of the healthcare organizations that employ health administrators as managers are difficult to distinguish. Both interests emphasize that patients receive needed services and that services are provided in an efficient manner. Healthcare organizations and health administrators rely upon phy- sicians, nurses, and therapists to determine or diagnosis the needs of a patient accu- rately and to plan and execute an intervention or treatment that has some probability of success in maintaining or improving the health status of the patient. Clinical interests stress the needs of individual patients and the identification of appropriate service interventions. Decisions made by clinicians are based upon what they con- sider to be effective approaches, interventions that have some probability of clinical or medical success. The physician, nurse, or therapist has been educated and trained to select and apply current knowledge to assist patients. Clinical interests and per- spectives are focused on the effectiveness of a service—the ability of a service to accomplish its predetermined objective. Although clinicians are not necessarily oblivious or insensitive to efficiency, their unique role and function stem from their commitment to provide effective service to patients. They alone have the expertise to determine a patient’s needs (i.e., diagnosis) and to meet them (i.e., treatment) and are judged by their peers, specific systems, and patients based upon their ability to provide an effective, but not necessarily an efficient, service.

e fficiency as a m anagement i nterest

Efficiency is the ratio measure of output over input. High efficiency is achieved when a service is rendered using the least amount of resources. Inefficient clinical practice, such as requiring more clinical tests than necessary to make an accurate diagnosis can lead to a highly inefficient healthcare organization. Using more medical supplies than needed or even stocking more medical supplies than needed are other examples of operational inefficiency. Using an excess number of people

to prepare a meal or render a bill is inefficient; an excess amount of input resources are being used to produce a specific output. Unlike operational effectiveness which is primarily in the province of the clinician, operational efficiency lies within the dual province of both clinicians and managers. Health administrators are retained to analyze, design, and implement work processes in the healthcare organization that lead to desired levels of operational efficiency.

Inefficient work processes waste scarce resources. Efficient work processes provide services that maximize the opportunities created by the mix of resources used to produce the service. Managers are employed by organizations to ensure that desired levels of efficiency are attained, not by accident, but by design. Being interested in efficiency differentiates the health services manager from the health service clinician. Striving for maximum appropriate efficiency is a management value that requires a specific repertoire of skills—the ability to analyze current levels of efficiency, the ability to design and redesign services to achieve desired levels of efficient, and the ability to implement new or revised services.

e ffectiveness as a m anagement i nterest

Effectiveness means the ability to accomplish a defined task. For example, if a spe- cific drug is able to cure a specific infection, then that drug can be considered effec- tive. If a specific medical procedure or therapy is able to cure or alleviate a specific disease or infirmity, then the procedure is effective. To be effective, the procedure or drug must accomplish its intended purpose. Multiple factors may influence the effectiveness of planned intervention or treatment. For example, some patients may respond differently to the same drug. Sometimes the effectiveness of a procedure or treatment is influenced by the behavior of the patient, something not totally controllable by the clinician. Effective treatments are those treatments that have a probability of success; sometimes these probabilities may be 5%, 50%, or 95% depending upon the state of clinical and scientific knowledge and/or the existing health status of the patient.

Healthcare organizations rely upon clinically trained professionals to select the appropriate clinical services or treatments for specific patients from the array of services offered by the organization. Clinical professionals are expected to select appropriate services and, if not available in the healthcare organization, to refer the patient to another organization. In the healthcare organization, managers are not empowered to override or veto clinical judgments involving a patient’s diag- nosis or treatment. Clinical protocols are established by clinical professionals, not managers. At the operational level, the clinical staff determine how effective the organization will be in accomplishing its mission to provide a high-quality personal and personalized health or medical service to specific patients (to treat disease or infirmity).

Learning Objective 2 5

� Chapter �: The Role and Function of Quantitative Methods

At the strategic or macro level of organizational decision making and action; however, managerial interests involving organizational effectiveness emerge. For example, the costs and benefits of investing in new technology must be identified and examined from both a clinical and organizational perspective before the deci- sion is made by the organization to acquire and implement it. Even though a new technology may enhance the effectiveness of the clinicians affiliated with the orga- nization and thereby increase the organization’s effectiveness, its acquisition and/ or operational cost to the organization may prevent the organization from acquiring it. Managerial involvement in these types of strategic decisions is one example of how managers influence the effectiveness of the healthcare organization. Health administrators also are trained to use epidemiology and are expected to use epide- miology to analyze the health and medical needs of the communities and groups of individuals served or potentially serviced by the healthcare organization.

e fficiency and m anagerial c ompetence

Just as clinical operational effectiveness is the responsibility of the

Who We Are

We are a professional custom writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework.

Do you handle any type of coursework?

Yes. We have posted over our previous orders to display our experience. Since we have done this question before, we can also do it for you. To make sure we do it perfectly, please fill our Order Form. Filling the order form correctly will assist our team in referencing, specifications and future communication.

Is it hard to Place an Order?

1. Click on the “Place order tab at the top menu or “Order Now” icon at the bottom and a new page will appear with an order form to be filled.

2. Fill in your paper’s requirements in the "PAPER INFORMATION" section and click “PRICE CALCULATION” at the bottom to calculate your order price.

3. Fill in your paper’s academic level, deadline and the required number of pages from the drop-down menus.

4. Click “FINAL STEP” to enter your registration details and get an account with us for record keeping and then, click on “PROCEED TO CHECKOUT” at the bottom of the page.

5. From there, the payment sections will show, follow the guided payment process and your order will be available for our writing team to work on it.

Need this assignment?

Order here and claim 25% off
Discount code SAVE25