How does the “value chain” relate to health care organizations? What is the role of the value chain in the strategic planning process?
In healthcare, a distinct type of the value chain method has proven valuable for identifying the way numerous activities involved in the delivery of healthcare care are combined. The healthcare industry utilizes value chain for figuring out ways of enhancing quality through the delivery, or the connection with patients to, suitable services in order to benefit from the whole set of processes needed for suitable care (Pananond, 2012). The value chain of healthcare is comparable to other industries. It entails distributors, manufacturers, providers, wholesalers, payers (patients), and professionals (nurses).
However, in healthcare, the value chain has numerous complexities and includes numerous diverse Government levels, their strategies, interests and the additional industries like insurance firms and private providers. As such, the intricate, interdependent value chain leads to the synchronicity between all associations to be obstructed, leading to difficulties in identifying the actual value of the delivered care and their actual costs.
The value chain is utilized for working out ways of creating the ultimate possible value for the consumers. The role of value chain is to assist the organization in identifying the areas that could be enhanced for maximum effectiveness and productivity (Pananond, 2012). It signifies every internal activity that the organization participates in for producing services and goods. In addition, it is formed by the primary processes that tend to add value to final products directly and back the processes that are adding value indirectly.
Explain the concept of competitive relevance for an organization’s strengths and weaknesses, and relate this concept specifically to health care organizations
The resources of an organization should be utilized or processed in ways that generate value out of them. The capability of a firm is an intricate and harmonized network of organizational procedures and practices that establish ways of successfully transforming the inputs of the organization into the outputs (Šarić, 2012). Presently, the capability that results in competitive advantage might not continue to thrive as there is a transformation in the market conditions and competitors. Strengths denote the resources that institutions and firms possesses and the abilities developed by organizations, both that could be utilized and established as competitive advantages. However, not every strength possesses the possibility of competitive advantage. On the other hand, the weaknesses are the deficient and lacking capabilities and resources that prevent organizations from establishing sustainable competitive advantages. The weaknesses require being corrected in the event that they are in crucial areas that prevent the organizations from establishing competitive advantages.
The possible weaknesses and strengths in the healthcare industry is crucial to initiating strategic thinking and emphasize thinking on regions where healthcare organizations could add or lose value. The process necessitates the survey of technology development, human resources, pro-curement, infrastructure, inbound and outbound logistics. Attaining the preliminary survey is based on looking at the organization charts, financial statement, information resources, staffing standards, and employee and customer interviews and surveys (Šarić, 2012). Furthermore, in the health care industry, the competition affects numerous relational viewpoints, with several studies establishing the effects of increased competition. The competition increases value for the health care consumers over time. The improvement of quality and process result in reduced expenses that lead to maximized customer satisfaction.
Discuss LEAN Six Sigma, and explain why more and more health care organizations are utilizing this approach to improving health care processes and reducing waste
Lean Six Sigma denotes the managerial method integrating Six Sigma techniques and tools, determined to remove the waste of talent, physical resources, talent, effort and time, while guaranteeing quality in the process of production and organization (Waurick, 2014). Lean Six Sigma emphasizes on removing defects. In the healthcare industry, the defects could be the gap between life and death. The healthcare industry utilizes the approach to enhance patient safety through the removal of the life-threatening errors. Lean Six Sigma is useful as it enhances the patient experiences through ensuring the procedures constantly deliver the actual outcomes. Through the implementation of Lean Six Sigma, the healthcare industry minimizes the number of errors on prescription instruction within the discharge documents
Through the identification of the expectations and needs of the patients for quality, the healthcare industry assists in delivering optimal patient care. The approach significantly impacts the direct patient care, healthcare management, and operations leading to quality improvement and cost savings (Waurick, 2014). Whether the requirements are moving the patients rapidly to the hospital room from the emergency room, or enhance the turnaround time for the laboratory processes, Lean Six Sigma assists the healthcare field in finding ways of maximizing the resources, eliminating the waste and attain the outcomes required in reducing costs and increasing the satisfaction of the patients.
In the healthcare industry, cost reduction is associated with the notions of process speed and lead time and involve internal quality while clients are just interested in end products. In addition, the patient (customer) participates in the whole process. Therefore, the lead time became the most crucial quality indicator from the patients’ perspectives. The waiting times and the waste impact the healthcare service’s quality perception (Furterer, 2013). The defects in the healthcare industry are often regarded as infections or complications. As a result, the Lean Sigma principles offer great possibilities of attaining process development in healthcare. Actually, as the Lean Sigma is increasingly implemented in the broad scope of the non-manufacturing processes, it is not the original healthcare concept.
The reuse and re-sterilization concept could be initiated to minimize expenses and the medical waste. Studies have established that the hospitals have the capacity of eliminating waste through recycling the medical equipment, which could save millions of dollars yearly and control the trashes at the medical center. The surgical towel, gown, laparoscopic port, and costly ultrasonic cutting equipment are tossed after a single use. Retesting and re-sterilizing the gadgets could reduce the level of needless waste from the hospitals.
References
Furterer, S. L. (2013). The Future and Challenge of Lean Six Sigma in Healthcare. Lean Six Sigma Case Studies in the Healthcare Enterprise, 379-384. doi:10.1007/978-1-4471-5583-6_14
Pananond, P. (2012). Moving along the value chain: Emerging multinationals in globally integrated industries. Asian Business & Management, 12(1), 85-114. doi:10.1057/abm.2012.30
Waurick, T. (2014). Lean Six Sigma. Prozessreorganisation mit Lean Six Sigma, 5-105. doi:10.1007/978-3-658-07754-9_2
Šarić, S. (2012). Theoretical Model of Internal Characteristics to Create Competitive Advantages through Clusters. Competitive Advantages through Clusters, 63-95. doi:10.1007/978-3-8349-3554-0_3
