Hospital Operation Management

Programme Name and Semester: BPT; Semester IV
Course Name (Course Code): Hospital Operations Management (GEHMGM402)

Academic Session: 2024
Study Material: Module 1

HOSPITAL OPERATIONS
MANAGEMENT (GEHMGM402)
Table of Contents
Content Page(s)
Hospital – Meaning and its functions 2-3
Business Operation and Management - Meaning 3
Operations Management in hospitals and main functions of 4 - 11
operations management in hospitals
Scope and functional areas of hospital operations management 12 - 22
Operations flowchart 23
Difference of hospital operations compared to other services 23 - 25
Faculty Name: Mukta Deb

Designation and Department: Associate Professor, Hospital Management
Brainware University, Kolkata 1
Module outcomes:
On completion of this module, you should be able to
i. Know the meaning of Hospital, business operations, hospital operation
management, and its functions
ii. Understand the scope and functional areas of hospital operations management
iii. Understand the core operational areas of the hospital
iv. Describe what is operations flow chart and its benefits
v. Differentiate hospital operations compared to other services.
HOSPITAL:
Hospital, an institution that is built, staffed, and equipped for the diagnosis of
disease; for the treatment, both medical and surgical, of the sick and the injured; and
for their housing during this process. The modern hospital also often serves as a
center for investigation and for teaching.
A hospital is a healthcare institution providing patient treatment with specialized
health science and auxiliary healthcare staff and medical equipment. The best-known
type of hospital is the general hospital, which typically has an emergency department
to treat urgent health problems ranging from fire and accident victims to a sudden
illness. A district hospital typically is the major health care facility in its region, with
many beds for intensive care and additional beds for patients who need long-term
care.
Functions of Hospital:
Below mentioned are some of the functions of hospital/hospital use:
 Medical hospital - medical hospital includes the treatment and management of
patients by a team of doctors.
 Patient Support provides nursing, nutritional diagnostic, counselling,
pharmacy, and medical supplies, all of which are directly related to patient
care.
 Administrative responsibilities include carrying out the hospital's guidelines
and directives regulating the release of support services in the areas of finance,
staff, housekeeping, materials and property, laundry, protection,
transportation, engineering, and board as well as several other maintenances.
 The hospital's financial activities must be planned, guided, and coordinated
for
 Patients in a hospital as well as the employees working there.
 Prepare a job and financial plan for services and initiatives, as well as funding
projections.
 To keep track of cash receipts and disbursements.
 To manage personnel development plans, procedures, and standards; to
provide guidance on policy, implementation, and administration of laws, rules,
and regulations.
 The quality, efficacy, and outcomes of health services for various groups and
populations are shaped by the structure and dynamics of healthcare
organizations; the policy repercussions for future health care reform initiatives
and patients in the hospital.
 Hospital operation is another major benefit of hospitals.

BUSINESS OPERATIONS – GENERAL MEANING:

Business operations refer to activities that businesses engage in on a daily basis to
increase the value of the enterprise and earn a profit. The activities can be
optimized to generate sufficient revenues to cover expenses and earn a profit for the
owners of the business.
Business operations are all the actions and systems that work together for a company
to generate revenue. Business operations vary based on the circumstances of each
organization.
MANAGEMENT – GENERAL MEANING:

Management is how businesses organize and direct workflow, operations, and
employees to meet company goals. The primary goal of management is to create an
environment that lets employees work efficiently and productively. A solid
organizational structure serves as a guide for workers and establishes the tone and
focus of their work.
Management (or managing) is the administration of organizations, whether they are
a business, a nonprofit organization, or a government body through business
administration, nonprofit management, or the political science sub-field of public
administration respectively. It is the process of managing the resources of businesses,
governments, and other organizations.
Management is the process of getting things done through others with the help of
some basic activities like planning, organizing, directing, coordinating, and
controlling to achieve the desired goals and objectives. It is the basis for every
organization. An organization cannot run for a long time if its all devices are not
suitably managed.
OPERATIONS MANAGEMENT IN HOSPITALS:

Operations management in hospitals is the process of managing the administrative,
financial, and legal aspects of a healthcare facility. It involves planning, organizing,
and controlling the operations that affect the quality of care, the patient experience,
and the organizational goals. Some of the tasks that operations management in

hospitals covers are budgeting, staffing, policy making, patient registration,

scheduling, billing, and medical record management.
Operations management in hospitals is one of the most important aspects of
functioning and smooth operations. It encompasses all the different management
areas within a healthcare facility, from human resources to supply chain and
everything in between. By understanding the crucial functions of operations
management, you can help ensure that your hospital runs as efficiently and smoothly
as possible.
Operations management in hospitals is the process of planning, organizing, and
controlling the operations of a healthcare organization. It includes the management of
both clinical and non-clinical operations. The main goal of operations management in
hospitals is to ensure that all operations are carried out efficiently and effectively.
It overlooks various essential aspects of hospital operations, such as staffing, patient
flow, resource allocation, and process improvement. Operations management in
hospitals also helps ensure that the hospital is running smoothly and meeting its
goals.
Importance of Operations Management in Hospitals
Operations management in hospitals is crucial to the success of any healthcare
organization. It helps to ensure that all operations are carried out efficiently and
effectively. Additionally, hospital operations management also helps improve patient
care quality and safety.
Operations management in hospitals is also critical for financial reasons. Proper
operations management can help to reduce costs and improve efficiency. It, in turn,
can lead to increased profits for the hospital.
Operations management in hospitals is a complex and challenging process. However,
it is essential for the success of any healthcare organization. Proper operations
management can help to improve patient care quality and safety, as well as increase
profits.
Without operations management, hospitals would not be able to function correctly.
Operations managers ensure that hospitals run smoothly and meet their goals.
Some other importance of operations management includes the following:
o Optimizing budgets, applying for grants and other funding, establishing
financial goals and implementing strategies to reach them
o Creating policies that support operations and the provision of excellent care

o Ensuring the hospital operates according to all legal standards, such as

ensuring all medical providers regularly update their licensing and participate
in continued education and professional development
o Form partnerships with other local health care facilities to provide care for the
community
o Overseeing the hospital's staffing needs and performing tasks like recruiting,
training and on-boarding for new employees
o Analyzing workflows and updating strategies to improve the efficiency of
services
Main Functions of Operations Management in Hospitals

In any organization, operations management (OM) is the process that coordinates and
oversees the production of goods or services. It includes developing, implementing,
and supervising systems that create and deliver a company’s products or services. In
healthcare, operations management is crucial in ensuring patients receive high-
quality care safely and efficiently.
There are four main functions of operations management in hospitals:
i. Quality management
ii. Resource management
iii. Process improvement
iv. Patient safety.
Detailed information about each function are furnished below:
i. Quality Management
Quality management is essential to providing safe, high-quality care. Quality
management is the process of ensuring that healthcare services meet and exceed
patient expectations. It includes setting quality standards, measuring and monitoring
performance, and taking corrective action when necessary. Only quality can meet the
challenges of an ever-changing healthcare landscape and ensure that patients receive
the best possible care.
It is the responsibility of operations managers to ensure that quality standards are
met. To do this, they must develop and implement quality management systems.
These systems help operations managers to identify and correct problems before they
result in poor patient outcomes.
Tasks Included in Quality Management:
a) Establishing quality standards: This involves developing criteria against which

the quality of healthcare services can be measured. There are many different quality
standards that operations managers can choose to adopt, such as those set by the
government.
b) Measuring and monitoring performance: This involves collecting data on the
quality of healthcare services and identifying areas where improvement is needed.
Operations managers can use various methods to collect data, such as surveys and
patient satisfaction scores.
c) Investigating complaints and taking corrective action: It is all about operations
managers taking complaints from patients or their families seriously and using them
to improve the quality of healthcare services. Operations managers must investigate
every complaint, identify the root cause, and take corrective action to prevent it from
happening again.
d) Educating staff on quality improvement: It is essential to ensure that all staff
members are committed to providing high-quality care. Operations managers must
provide training on quality improvement methods and ensure that staff members use
them correctly.
e) Participating in quality improvement initiatives: It involves operations
managers working with other departments in the hospital to identify and implement
quality improvement initiatives. These initiatives could include changes to how
healthcare services are delivered or modifications to how the hospital is run.
ii. Resource Management
Resource management ensures that all resources (e.g., personnel, equipment,
supplies) are used efficiently and effectively. In healthcare, resource management is
crucial to ensuring that patients receive the care they need promptly. Healthcare
operations have different resources, and each needs to be managed effectively.
The first step in resource management is planning. Planning entails goals and
objectives set for the use of resources. Once goals and objectives are set, a plan can
be developed to achieve them. The second step is implementation. This step is about
putting the plan into action and ensuring that all resources are used according to the
plan. The final step is evaluation. This step involves assessing whether or not the
goals and objectives were met. If they were not, then adjustments can be made to the
plan.
Tasks Included in Resource Management:
a) Scheduling: This task involves creating a schedule for the use of resources. The
schedule should be designed to meet the organization’s and the patient’s needs. It is
essential to consider the availability of resources when creating the schedule.
b) Forecasting: This task involves predicting future resource needs. It is done by
analyzing past trends and current conditions. Forecasting can help organizations
prepare for future demands and make necessary adjustments to the resource plan.
c) Inventory control: Accurate inventory is essential for resource management. This
task involves tracking the levels of resources and ensuring that they are adequate to
meet the organization’s needs.
d) Budgeting: Without an adequate budget, resource management is complex. This
task involves developing a budget for the use of resources. The budget should be
designed to meet the goals and objectives of the organization.
e) Supply Chain Management: Supply chain management manages the flow of
resources (e.g., materials, information, money) from suppliers to customers. In
healthcare, supply chain management is crucial to ensuring that patients receive the
care they need on time.
f) Staffing: One of the essential tasks in healthcare operations is staffing. This task
involves ensuring that there are enough personnel to meet the demands of the
organization. It is crucial to consider the skills and experience of the staff when
making staffing decisions.
g) Training: Another critical function of operations management in hospitals is
training. This task involves providing employees with the knowledge and skills they
need to perform their jobs effectively. Training is given to both new and existing
employees who need to learn new skills. Ensuring that all employees receive the
training, they need to perform their jobs effectively is essential.
iii. Process Improvement
Process improvement is the systematic identification and implementation of changes
that will improve the quality and efficiency of healthcare services. Operations
managers often lead process improvement efforts in collaboration with other
healthcare team members.
Six Sigma is named among the most important tools in the process improvement
toolbox. Six Sigma is a data-driven approach to identifying and eliminating errors
and waste in healthcare processes. It has successfully improved various healthcare
operations, from patient registration to discharge.
Process improvement is dependent on the effective use of data. Operations managers
must be skilled in data collection and analysis to identify improvement opportunities.
They must be efficient in communicating their findings to the rest of the healthcare
team.

Tasks Included in Process Improvement:
a) Data collection: Before any improvements can be made, operations managers

must first collect data on the current state of the healthcare process. This data can be
managed through various methods, such as observations, interviews, and surveys.
b) Data analysis: Once data has been collected, it must be analysed to identify areas
of opportunity. This process often involves creating flowcharts and other visual aids
to help illustrate the current process. For instance, a flowchart might show how many
steps are involved in a patient’s journey from registration to discharge.
c) Identifying opportunities: After the data has been analysed, operations managers
can begin to identify opportunities for improvement. These opportunities might
involve eliminating steps in the process, streamlining communication between
departments, or increasing the use of technology.
d) Implementation: Once opportunities for improvement have been identified,
operations managers must work with the rest of the healthcare team to implement
changes. This process can be challenging, as it often requires changing long-standing
processes and procedures.
e) Communication: Throughout the improvement process, operations managers
0
must keep the rest of the healthcare team informed of their progress. This
communication can take many forms, from regular updates at team meetings to more
formal presentations.
f) Implementation of changes: After the improvements have been made, operations
managers will need to monitor the process to ensure that the changes have the desired
effect. This monitoring can involve collecting data on the process and comparing it to
the data collected before the changes were made.
iv. Patient Safety
Operations management in healthcare is responsible for ensuring patient safety. It
includes ensuring the hospital environment is safe, clean, and free of hazards.
Operations managers also develop policies and procedures to prevent errors and
accidents. They coordinate with staff to ensure they are properly trained in safety
procedures.
With patient safety being a top priority in healthcare, operations managers play a
vital role in ensuring that a hospital is a safe place for patients and staff. It sets the
foundation for quality care and a positive patient experience. All the staff must be
appropriately trained and follow the set safety procedures to avoid accidents. The
operations manager must constantly monitor the hospital environment and make
necessary changes to keep it safe.
Tasks Included in Patient Safety:

Developing policies and procedures to prevent errors and accidents includes
creating policies on handling hazardous materials, what should be done during a fire,
and how to evacuate the building safely.
Working with hospital staff to ensure they are adequately trained in safety
procedures: This includes training on how to use safety equipment, handle
hazardous materials, and what to do in an emergency.
Inspecting the hospital environment includes checking for trip hazards,
ensuring adequate lighting, and ensuring the building is up to code. It also
includes ensuring that the hospital has an emergency plan in place.
Investigating accidents and incidents to determine root causes and prevent future
occurrences. It includes interviewing witnesses, reviewing security footage, and
conducting analysis to identify trends.
Operations Management in Hospital: Bedrock of A Successful Healthcare
1
Industry
The operations management in hospitals is responsible for the smooth running of the
hospital. Operations managers ensure that all the hospital departments are working
efficiently and that the patients get excellent care.
They are also responsible for the hospital’s financial management, including
budgeting and forecasting. In addition, they also have to deal with the human
resources in the hospital, including recruitment, training, and development.
Healthcare operations management is a vital part of the hospital, and they play a
crucial role in the success of the healthcare industry. Without it, the hospital would
not be able to function correctly, and the patients would not receive the best care.
SCOPE AND FUNCTIONAL AREAS OF HOSPITAL

OPERATIONS MANAGEMENT
The scope of operations management includes:
 Understanding the business process and how it works
 Identifying inefficiencies and areas of improvement
 Planning and designing new strategies or improvements to current processes
 Implementation of new or improved processes
 Monitoring of process performance
 Process optimization
 Resource management
Operations managers need to have a broad skill set to be successful. They must be
not only able to understand the business process but also be able to identify
inefficiencies and areas of improvement. In addition, they must be able to plan and
design new or improve current processes. Finally, they must be able to monitor
process performance and optimise resources.
Becoming a successful operations manager requires a dedication to continuous
learning. Operations managers must stay up-to-date on the latest industry trends and
best practices. They must also be able to communicate effectively with other
members of the organisation and external stakeholders.
The following are the functional areas of Management:
i. Human Resources Department
2
ii. Finance Department

iii. Materials Department
iv. Marketing Department
The following are the core operational areas of the hospital
i. In-patient Department
ii. Outpatient Department
iii. Emergency Department
iv. Operation Theatre
Below is given detailed information about each functional areas of management.
i. HUMAN RESOURCES DEPARTMENT
HR managers are the unsung protagonists in healthcare, mostly because their jobs
directly affect the lives of patients whom they seldom meet. They work directly with
healthcare professionals to devise programs and key solutions that cater to the
requirements of both employees and patients. It is significant work that is worthwhile
in a number of ways.
A hospital is a miniature community that operates like a small city, displaying the
same issues with a stronger viewpoint due to the human relations factor. With
responsibilities that envelop everything from performance management to safety,
Human Resources Management plays a fundamental role in the health care
workplace to ensure optimum delivery of health care services and providing the best
patient outcomes. In any health care background, the Human Resource department is
responsible for an assortment of personnel wants that both employers and employees
come across. The function of this department is to handle all aspects of operations
that are personnel-related.
Specific Human Resources Management Functions Include:
 Hiring
 Physician and Nurse Recruitment
 Employee Orientation
 Personnel Management
 Benefits & Compensation Management
 Counselling
 Claims Handling
3
 Training and Performance Monitoring

 Professional Development Programs
 State and Federal Regulations Education
 Work place Safety and Sanitation
 Labour Mediation
 Administration – Employee Meetings
 Staff Morale & Retention
Each departmental role is complex which often leaves the employee or employer to
wonder where and how to address certain queries. A guidebook is an easy, well-
organized way to provide an instrument that will answer many questions. Frequent
issues outlined in a question and answer format offers a straightforward to read guide
that can be circulated to everyone. Human Resource personnel typically assemble the
data to compile such a guide book and hand out copies to all employees under their
organization.
Human Resources have evolved considerably in the last few decades into an all
comprehensive management department. At one time, this part of a business was
exclusively clerical. It was assigned to the personnel department which managed
hiring, firing, book keeping and payroll. Upgrades in work place management have
opened the entrance for more dedicated needs and roles of employees. In turn,
personnel departments grew into a greatly specific field with either an internal or
external human resources department.
Human Resource Management establishes the lines of communication at all levels to
better supervise business personnel. Regular meetings are a competent way to
examine issues and needs. Personal interaction opens conversation for suggestions
and grievances between management, staff and employees. Meetings build trust and
assurance in a company and guarantee that quality control is in place successfully.
Communication is a core principle in group dynamic philosophy. This part of the
workplace relations is guided by human resource professionals.
Since all health care is ultimately delivered by and to people, a strong perception of
the human resources management problems is required to ensure the success of any
health care program. Further human resources initiatives are necessary in many
health care systems, and more widespread research must be undertaken to bring
about new human resources policies and practices that will promote the welfare of
individuals around the world.
Efficient human resources management plays a critical role in the development of
4
health care systems. Proper management of human resources is imperative in the

recruitment and maintenance of clinical and non-clinical staff, promoting staff
morale, providing opportunities for specialized development, and in the capability of
a health care organization to provide quality health care services and progress patient
health outcomes.
ii. FINANCE DEPARTMENT
Healthcare finance is defined as finances that include both financial management
specialty and accounting specialty within the healthcare industry.
The size and structure of the healthcare finance department vary by the nature and
size of the organization. However, the general model is that the chief financial officer
is responsible for managing treasury and other accounting tasks under his direction.
The Objective of Financial Management in the Healthcare Sector:

o Profit maximization.
o Wealth maximization.
o Proper mobilization.
o Proper estimation of financial requirements.
o Proper utilization of finance.
o Survival of company.
o Maintaining proper cash flow.
o Creating reserves.
The Role of Financial Management in Healthcare:
Not only the finance team fulfills general bookkeeping duties, fulfilling purchase
orders, finalizing sales, maintaining receipts, and managing payments, running
payroll, but does a lot more. They negotiate contracts with contractors and service
providers and maintaining cash reserves for future expenses. They retain these
records electronically as well as manually.
In short, the primary role is to manage money and financial risk in a way that
coincides with the financial goals of the organization. After all, if a healthcare
organization has strong financial management plans, only then they’re able to
5
provide the best healthcare treatments to all their patients.

Financial Management Functions:
a. Evaluation and Planning
Evaluation of the financial effectiveness and planning overall operations accordingly
allows the healthcare organization to work better in the future. For example, a
hospital evaluates the budget of an emergency room and discovers that they’re losing
patients because of smaller space. In response to this evaluation, the management
then decides to plan for an expansion of ER.
b. Treasury
Treasurers work alongside other teams. They keep the check and balance of an
organization’s cash. Moreover, they are responsible for evaluating that there are
always enough funds available to meet the organization’s immediate needs. The
treasury team can forecast the future needs of the organizations and also advise in
making long-term investment decisions to ensure a constant stream of revenue.
c. Long-Term Investment Decisions
Investment decisions involve analyzing current strategies and determining how
investments will affect the financial future of the organization. The financial team
comprises both top and middle-level managers who share their ideas when it comes
to big investments. Taking the example mentioned above, the financial team at the
hospital must consider the cost of an emergency room expansion–––to decide if it is a
good investment or not.
d. Financing
Raising funds for expenditures is not an easy task. It involves things like using
internal funds, fundraising, grants, or loans. The financial team will look at the cost
vs. benefits approach of the investment and the amount of debt that they will incur. In
the case of the ER expansion example, the senior manager will make the final
decision and would ask the financial management team to initiate actions. The team
will bring someone in to estimate the renovation cost and how long it would take to
complete. At first, they may decide to use organization’s internal funds and then
would apply for a small loan to cover the expenses.
e. Working Capital Management
Working capital=current assets minus current liabilities. Current Assets might
include cash, receivables, inventories, and marketable securities. The financial
management team is responsible for managing the working capital of healthcare, for
lowering the cost of an organization.
6
For example, in the renovation of the hospital’s emergency room, the team will
determine which assets are reusable and in which there’s a need to invest. Here the
financial team will use the working capital of the hospital to make these purchases.
f. Investor Relations
Financial management in healthcare also takes care of investor relations. They deal
with shareholders and other stakeholders of the organization who have an interest in
finances and stability. Moreover, they provide investors with financial reports on
current business performance or expected future changes.
Communication among finance team
Oftentimes, lower and middle-level managers in the finance department meet with
the CEO of a healthcare organization to discuss the books. In this meeting, they talk
about the current financial statement, earnings to date, and balance sheets.
The CEO will use this information for future strategic planning that involves
budgeting, evaluating various sector’s performances, making long-term investment
decisions, and determining if working capital is enough for the upcoming year.
Challenges Financial department in Healthcare May Face
o Managing finances in a capital-constrained environment––Handling the
pressure to cut costs.
o Accessing technological transformation––Replacing an outdated IT
structure with new medical technology.
o Adapting to market forces––Acquisitions and Mergers are a significant part
of the healthcare sector.
o Meeting rules and regulations––Healthcare and hospitals have to comply
with several regulations and compliance.
iii. MATERIALS DEPARTMENT
Materials Management is a vital part of any organization. Particularly in a Hospital,
Materials Management Department plays a significant role in the unhindered and
proficient function of it. It means the supervision of materials likes Planning,
Purchasing, Store & Inventory Control, Care and Preservation, Issue of materials,
Accounting and Disposal of scrap.
It is in direct contact with the operator department in its daily activities. The most
significant objective served by stores is to offer a constant service to the numerous
user departments. In the case of a Hospital, the Operation Theatre, Wards, Specialty

7
Clinics, Units, Refraction Departments, Registration, Admission Departments etc. are

examples of the operator departments.
The efficacious and resourceful functioning of a department depends mostly upon
how best the materials are provided by stores department to the operators. Further,
stores are mostly linked directly with money, as materials have money worth.
The following are the functions of the material department:
a. Purchasing: Purchasing means to buy different materials by paying money or its
equal from suppliers / salespersons. In this procedure, the resources are bought and
assimilated using some uniform design. The action of purchasing is an essential task
in the supply cycle. Purchasing is a store duty for the required materials of the right
quality, at the right valuation, for the right source, at the right time and at the right
place in the most cost-effective method. This also take account of choice of sources
of supply, settlement of terms of purchase, assignment of purchase order, follow up,
conservation of smooth relation with suppliers, authorisation of payments of
suppliers, appraising and assessment of suppliers.
b. Storage and Preservation: These are an imperative part of the storekeeping role.
When materials remain idle in the store, the materials need to be taken care of and
looked after appropriately. Else, these materials may get damaged due to natural
chemical reaction like rusting by moisture, melting by heat etc. and also may get
affected by bugs, pests, rats etc.
In order to guard the materials from numerous adverse effects the store manager
should take relevant measures.
The chief role of the Stores of a hospital is to maintain an uninterrupted supply of
materials to the different departments so that smooth and efficient operation of the
hospital is not impacted. In order to guarantee an unhindered issue of materials, an
efficient procedure needs to be followed. Good stores systems can significantly help
the Stores Manager in resolving issues, precise stock status reports, appropriate
detection of discrepancies, and rapid clearance of goods inward notes to expedite bill
payment, decline in losses etc.
c. Inventory Control: Inventory control is employed in curtailing the total cost of
inventory. This includes physical control of materials, maintenance of materials,
minimization of desuetude and damage through timely clearance and efficient
handling, preservation of stores records, suitable location, and stocking. Store is also
accountable for the physical verification of stocks and reconciliation them with book
figures. The inventory ordering quantities, defining stock level, lead time analysis
and reporting.
8
Inventory is a model in finance, which specifies goods including raw materials, work
in progression, finished goods and so on in industrial initiatives. In order to confirm
that producing and operating procedures will be carried out efficiently, enterprises
must hold sensible inventory. Inventory is a prospective factor of producing because
it needs to occupy certain capital. Meanwhile, it is also a kind of essential goods
reservation for normal manufacturing. Therefore, the main undertaking of decision
on inventory is how to evaluate the two facets so as to make the inventory neither
extreme to form overstocked funds nor inadequate to result in deficiency of raw
materials to produce or shortage of goods to sell. Under the condition of producing
and selling smoothly, the best scheme that makes the cost lowest and the efficiency
highest needs to be incorporated.
The inter-related tasks of the materials management are usually looked after by
individuals. As the activities multiply, the functions of each entity become more and
more dedicated. The integrated materials management theory necessitates central co-
ordination of all these interconnected activities. Therefore, the internal structuring of
the various tasks as well as the association of the materials management divisions
with the other divisions, technical, financial and marketing in the overall business
becomes vital. Material management function ought to be supervised by a proficient
professional who must be a member of the top management team as managing
materials is a most important job.
Hospital materials management has faced many of the same problems as materials
management worldwide. Many of the best practices in hospital materials
management relate back to the same strategic sourcing policy in production materials
management.
There are many practices for efficient material management. Some of these are:
a. Manage Money, not just Resources. While in a hospital setting, critical stocks
must be accessible in the right place at the right time, many healthcare organizations
currently fail to study what is the right place and how much is required where.
b. Co-operate with Physicians and Nursing Staff. In hospital materials
management environments that do not use strategic cost management, administration
personal manoeuvre the materials management program with little to no input from
the real working staff.
c. Contemplate total cost, not just price. From ordering costs to the transport costs
of materials, it is imperative for health care setting materials managers to evaluate
true cost of inventory instead of looking sternly at money spent.

9
d. Create integrated Policies and Procedures. Using centralized ordering systems,

such as those offered in an e procurement environment, help improve adherence to
ordering policies and procedures. This reduces unconventional expenditure and helps
ensure regular stock quality.
e. Develop a process, not departmental focus. Using reliable processes makes it
easier to calculate the efficacy of the materials management method used. Pharmacy
inventory management system should perform mostly akin to operating room
inventory management methods.
f. Develop team focused, not individual focused processes. One single entity
cannot affect a process. While it is important to have experts in material management
rather than making several team members implement the process, the processes
should back team goals, not the predilections of one staff member.
By evolving a materials management system that echoes these six best practices in
hospital materials management, any medical system can reduce costs and improve
patient results.
iv. MARKETING DEPARTMENT
Marketing plays an important role in helping healthcare professionals to create,
communicate, and provide value to their target market. Modern marketers start from
customers rather than from products or services. They are more interested in building
a sustainable relationship, than in ensuring a single transaction.
They aim to create a high level of consumer satisfaction so that they return to the
same supplier. Marketers have used many traditional methods that include marketing
research, product design, distribution, pricing, advertising, promotional sales, and
sales management.
These methods need to be joined by new ones, related to new technology and new
concepts, to attract customers through messages and offers. The marketing strategy is
the way an organization acts under the influence of environmental factors. In
practical terms, marketing strategies outline a path following the analysis of
environmental factors. The marketing policy defines its general framework of action
to carry out its entire activity, including several strategies.
Healthcare marketing:
Health marketing is an approach to public health advancement that appeals to
traditional marketing principles and theories alongside science-based strategies to
protect and promote the health of diverse populations. It means creating,
communicating, and delivering messages for the public on prevention, health
0
promotion, and health protection. It is one of the ways advancements in medicine and
health-protecting services, such as insurance, are made widely known.
The marketing strategy contains the traditional "4Ps" of marketing, namely:
 The "product" is what the company is trying to sell to consumers.
 The "place" which refers to the access to this procedure.
 "Promotion" describes to creating awareness and hence demand.
 "Price" refers to the rate of the procedure e.g. money, time, reputation, etc.
The benefit of Healthcare marketing:
a. Increasing the Patient Base of the Practice
By healthcare marketing, you can gain the advantage of your competitors by
targeting and attracting potential patients. The objective of healthcare marketing is to
inform and educate your target patient base. A good healthcare marketing strategy
will use digital marketing to capture leads and patient information to develop drip
campaigns to stay in front of existing patients.
b. Increasing Local Physician Referrals to the Practice
A standard form of healthcare marketing is developing a physician outreach program.
For many years, hospitals have been using this form of healthcare marketing, often
referred to as physician liaison or physician relations marketing. With the help of
Physician liaisons, physicians can create highly engaged physician referral networks
that result in the growth of patient referrals and an increase in revenue.
c. Promote Important Medical Services
Healthcare marketing systems like social media marketing, website, content
marketing, and digital advertising are fantastic tools to let physicians feature and
promote their medical services and capabilities.
d. Enhancing the Patient Experience at the Practice: -
With the help of healthcare marketing systems patients receive the top-quality
medical care as well as have an overall amazing experience; with the availability of
continuing education resources, patient portals, reviews, and much more! Patients are
also able to quickly and efficiently communicate with the medical practice and send
and receive valuable information to their care.
Importance of Healthcare Marketing:
Marketing for the medical profession is an idea that is now common for doctors.
Healthcare marketing is a fundamental component of sustainable growth. With
1
healthcare marketing, there would be an influx of new patients. In an area, there are
likely multiple healthcare practices as follows:
a. Wellness Challenge
The organization should start a wellness challenge among their patients and
encourage them to share their progress on social media, tagging your organization,
and using a branded hashtag.
b. Waiting Room Experience
Patients waiting to be seen by a physician are a captive audience, perfectly positioned
to pay attention to any news or brand messaging you want to get in front of them.
c. Blogger Relations Campaign
Over the years the blogger community has been steadily growing. Bloggers have
developed an excellent amount of clout with their reader's research has shown that
81% of the online population trusts advice they get from bloggers. By joining up with
strategic bloggers, one can work with them to share your messaging in unique ways
with their trusting audience.
d. New Patient Forms
Every patient who walks through the door most likely has to fill out new patient
forms before receiving care. These forms are an easy way to reach people who may
air out many of the other schemes one will use to try to reach them down the road.
Thus, the marketing has a very important role in the health care sector. When
initiating healthcare marketing journey find a partner that understands the space and
only focuses on healthcare marketing. A healthcare marketing agency acknowledges
the patient experience and industry and can use tested and proven procedures to get
the organization where it wants to be!
CORE OPERATIONAL AREAS OF THE HOSPITAL

The following are the core operational areas of the hospital.
IN-PATIENT DEPARTMENT
The inpatient department, commonly known as the inpatient unit or ward, is a section
of a hospital dedicated to providing care for patients who require overnight stay or
extended medical treatment.
OUTPATIENT DEPARTMENT
2
The Outpatient Department (OPD) serves as the gateway for patients seeking non-
emergency medical care, diagnostics, consultations, and treatments in a hospital or
clinic setting.
EMERGENCY DEPARTMENT
The Emergency Department (ED), also known as the Emergency Room (ER) or
Accident & Emergency (A&E), is a specialized unit in hospitals dedicated to
providing immediate medical care to patients with acute illnesses, injuries, or urgent
medical conditions
OPERATION THEATRE
The Operating Theatre, also known as the Operating Room (OR) or Surgical Suite, is
a specialized facility within a hospital where surgical procedures are performed
OPERATIONAL FLOWCHART
A flowchart is a diagram that illustrates the steps, sequences, and decisions of a
process or workflow.
Workflow is the series of activities that are necessary to complete a task. Each step in
a workflow has a specific step before it and a specific step after it, except for the first
and last steps.
Tools such as flow charts and process maps are used to visualize the steps involved
in a workflow process and the order they should go in.
A business workflow is a repeatable process that consists of a series of tasks that
generally need to be completed in a specific sequence. Workflows are useful
for ensuring that important processes are done the right way every time.
Some benefits of having a workflow diagram include:
i. Increased efficiency by ensuring that everyone knows their role in the process.
ii. Improved communication by identifying problem areas and potential
roadblocks.
iii. Greater clarity surrounding who is responsible for what tasks
A sample workflow chart representing one of the hospital functions is given below:

3
DIFFERENCE OF HOSPITAL OPERATIONS COMPARED

TO OTHER SERVICES
Hospital operations differ significantly from other service industries due to the
complexity and critical nature of the services provided. Here are some key
differences:
a. Life and Death Situations: Hospitals deal with life-threatening situations on a
daily basis. The decisions made and actions taken by hospital staff can directly
impact patient outcomes. This level of responsibility and urgency is not typically
present in other service industries.
b. Regulatory Environment: Healthcare is heavily regulated to ensure patient safety
and quality of care. Hospitals must adhere to numerous regulations and standards set
by government agencies, accrediting bodies, and professional organizations.
Compliance with these regulations adds a layer of complexity to hospital operations.
c. Specialized Knowledge and Skills: Healthcare professionals require extensive
education, training, and experience to provide specialized medical care. Hospitals
must ensure that their staff members are highly skilled and competent in their
respective roles to deliver quality care to patients.
d. Patient-Centered Care: Hospitals prioritize patient care and safety above all else.
This often involves personalized treatment plans, multidisciplinary care teams, and a
focus on patient satisfaction. Unlike many other service industries, the well-being
and health outcomes of patients are the primary objectives in hospital operations.
f. High Capital Intensity: Hospitals require significant capital investment in
infrastructure, medical equipment, and technology to operate effectively. The costs
4
associated with maintaining and upgrading medical facilities and equipment are
substantial compared to other service industries.
g. Emergency Preparedness: Hospitals must be prepared to handle emergencies and
disasters, such as natural disasters, mass casualty incidents, and infectious disease
outbreaks. Emergency preparedness planning and response are integral parts of
hospital operations to ensure continuity of care and the safety of patients and staff.
h. Interdisciplinary Collaboration: Hospital operations involve collaboration
among various healthcare professionals, including physicians, nurses, therapists,
technicians, and administrative staff. Effective communication and coordination
among these interdisciplinary teams are essential for delivering comprehensive care
to patients.
i. Ethical Considerations: Hospitals face complex ethical dilemmas related to
patient care, such as end-of-life decisions, organ transplantation, and resource
allocation. Ethical principles and guidelines play a crucial role in guiding decision-
making processes within healthcare organizations.
j. Insurance and Billing: Healthcare financing and reimbursement mechanisms are
unique to the healthcare industry. Hospitals must navigate complex insurance
systems, billing processes, and reimbursement models to ensure financial
sustainability while also providing affordable care to patients.
k. Continuous Quality Improvement: Hospitals are constantly striving to improve
patient outcomes, enhance patient safety, and optimize operational efficiency.
Quality improvement initiatives, clinical guidelines, and performance metrics are
utilized to monitor and enhance the quality of care delivered within hospital settings.

5
MULTIPLE CHOICE QUESTIONS:
1. Identify the functions of the hospital from the following

a) Diagnosis of the disease
B) Medical and Surgical treatment
C) Research
D) All of the above
Answer: D
2. Which of the following statements is TRUE concerning the modern hospital?

A) It serves as a center for investigation and teaching
B) It serves as a safe haven for patients during the treatment process
C) It plays a pivotal role in diagnosing diseases and providing both medical
and surgical treatments for the sick and injured.
D) All of the above
Answer: D
3. What distinguishes a district hospital from other types of healthcare facilities?

A) It primarily focuses on teaching medical students
B) It has a large number of beds for intensive care
C) It specializes in conducting research investigations
D) It offers only long-term care for patients
Answer: B
4. What is a crucial skill for operations managers involved in process improvement?

A) Proficiency in patient care techniques
B) Mastery of administrative tasks
6
C) Skill in data collection and analysis

D) Expertise in medical billing procedures
Answer: C
5. Which of the following statements is TRUE about ‘Operations management”?

A) It refers to the activities that business organizations engage in on a daily basis
B) It is concerned with increasing the value of the enterprise and earn profit
C) It is concerned with all the actions and systems that work together for an
organization
D) All of the above
Answer: D
6. Identify the tasks that operations management at the hospitals cover

A) Staffing
B) Budgeting
C) Policymaking
D) All of the above
Answer: D
7. ‘Management’ is the administration of the --------- organizations

A) Business
B) A profit organization
C) Government body
D) All of the above
Answer: D
8. Goals of the ‘Management’ include the following EXCEPT

A) To optimize resources
B) To increase efficiency
7
C) To increase the elements of risk

D) To create a dynamic organization
Answer: C
9. Which statement is not TRUE about Hospital Operations Management?

A) It is the management activity
B) It includes only medical and paramedical areas
C) It does not include non-medical area
D) Both B and C
Answer: D
10. Which of the following tasks will you use to manage the resources?
A) Scheduling
B) Forecasting
C) Inventory control
D) All of the above
Answer: D
11. Which of the following statements is NOT TRUE concerning patient safety in
hospital operations management?
A) Policies and procedures should be framed to prevent errors and accidents
B) Employees should be adequately trained in safety procedures
C) Responsibilities should be allocated only to the lower-level employees to
ensure a safe environment, not middle and top-level personnel
D) Investigating accidents and incidents to determine root causes and prevent
future occurrences
Answer: C
12. The HR functions include the following EXCEPT

8
A) Recruitment of Doctors and Nurses

B) Giving orientation to the newly joined employees
C) Purchasing the equipment necessary for the surgery
D) Looking after the welfare facilities of the employees
Answer: C
13. To ensure which of the following functions, effective Human Resource

Management function is necessary in health care industries?
A) To enhance the morale of the employees
B) To ensure the safety of the patients
C) To maximize the commitment of the employees towards the organization
D) All of the above
Answer: D
14. Choose the function of finance management from the following

A) Working capital management
B) Investor relations
C) Long-term investment decisions
D) All of the above
Answer: D
15. Which of the following is called coordination?

A) Organizing the activities and resources in an orderly according to the
sequence
B) Enhancing the public relations strength of the organization
C) Attempting to strengthen the reputation of the organization
D) None of the above
Answer: A

9
16. Which of the following departments is concerned with creating, communicating,

and providing value to their target population?
A) Human resources
B) Marketing
C) Material
D) Finance
B. Marketing
17. From the followings, select the factor included in the workflow chart.
A) Steps
B) Sequences
C) Decision of a process
D) All of the above
Answer: D
18. Show the function that will not be considered in staffing function
A) Recruitment
B) Training
C) Salary management
D) Sales promotion
Answer: D
19. Which of the following is NOT the goal of Continuous Quality Improvement
(CQI) in hospitals?
A) Maximizing profits
B) Enhancing patient outcomes
C) Reducing staff salaries
D) Enriching hospital facilities
Answer: C

0
20. What is the purpose of utilizing guidelines in hospitals?

A) To increase the patient’s satisfaction
B) To standardize and improve patient care
C) To reduce the errors and accidents
D) All of the above
Answer: D
21. Which of the following is a key role of ethical principles in guiding decision-
making processes within hospitals?
A) Prioritizing healthcare for wealthy patients
B) Ensuring fairness and justice in resource allocation
C) Minimizing patient access to critical care
Answer: B
22. What is the purpose of ethical guidelines in healthcare organizations?

A) To promote discrimination based on patient demographics
B) To prioritize healthcare for certain religious groups
C) To provide a framework for morally sound decision-making
D) To restrict patient access to essential medical services
Answer: C
23. Choose the primary function of the Materials Management Department from the
following.
A) Patient diagnosis and treatment
B) Human resources management
C) Planning, purchasing, and inventory control of materials
D) Marketing and advertising strategies
Answer: C

1
24. Which of the following is a responsibility of the Materials Management

Department in a hospital?
A) Receiving feedback from the patients about the services provided
B) Preparing discharge summary for the discharged patients
C) Accounting and disposal of scrap materials
D) Public relations and community outreach
Answer: C
25. What should be the consideration when creating a schedule for resource
utilization in a healthcare organization?
A) Assessing the organization's needs
B) Forecasting the patient's needs
C) Considering the availability of resources
D) All of the above
Answer: D
26. By which of the following ways does ‘forecasting’ assist healthcare organizations
in resource planning?
A) By focusing on past trends
B) By regarding current conditions
C) By predicting future resource needs based on past trends and current
conditions
D) All of the above
Answer: D
27. ------- is NOT the goal of resource management in healthcare.

A) Maximizing profits
B) Minimizing patient care
C) Ensuring efficient and effective use of resources
2

Answer: B
28. Why is effective resource management crucial?

A) To maximize the profits over operations
B) To ensure resources are utilised to a maximum extent
C) To ensure patients receive timely care
D) All of the above
Answer: D
29. Why is interdisciplinary collaboration crucial in hospital operations?

A) To create conflicts among healthcare professionals
B) To ensure that healthcare professionals work in isolation
C) To deliver comprehensive care to patients
D) To limit patient safety
Answer: C
30. Which of the following is the operational areas of the hospital?

A. Inpatient Department
B. Outpatient Department
C. Emergency Department
D. All of the above
Answer: D
SHORT ANSWER QUESTIONS

1. Label the meaning of ‘Hospital’
2. Tell your understanding about the concept, ‘Quality’

3
3. Define Management.
4. Indicate any three importance of Operations Management in Hospitals
5. Infer the meaning of ‘Business Operation’.
6. List any three qualities you would assess to decide whether a ‘receptionist’ at a
hospital needs training or not.
7. State three reasons why training is imperative to fully utilize the resources.
8. Identify any three ways to improve the process to enable the business to perform
efficiently.
9. Name the functional areas of Management.
10. Identify any three reasons why Training and Development is necessary for
Paramedical employees.
11. Outline any three qualities a marketing manager needs to have.
12. Cite any three objectives of financial management in healthcare.
13. Indicate any three means you will use to enhance the cooperation among the
employees to nurture the operation activities at the hospital.
14. Discover any three benefits of the workflow diagram.
15. Enumerate any three advantages of planning in hospital operations management.
LONG ANSWER QUESTIONS

1. Explain what role the Hospital Operations manager plays in dealing with
emergencies at a hospital (Take any emergency of your choice to give an example).
2. List any two activities, as a Hospital Operations Manager, you would initiate to
ensure the safety of the patients and briefly describe what outcome they would bring.
3. Differentiate hospital operations functions from other services. Take any service
of your choice to give an example.
4. Explain why the Marketing Department is crucial at a hospital.
5. Explain what qualities the material manager, at a hospital, needs to have to run the
department efficiently.
6. Name various tasks included in process improvement to simplify the task (of your
choice) at a hospital.
7. Describe why process improvement is essential to make effective utilization of the
4
resources.
8. Justify how the Materials Department assists the operations management at the
hospital.
9. List any two information, in a training program, you would provide as a HR
manager to the paramedical employees at a hospital, and briefly discuss what
outcome they would bring to the hospital.
10. Prepare a flowchart for a department of your choice and briefly mention how it
works.
REFERENCES:
DC Joshi and Mamta Joshi. ‘Hospital Administration’. 2 nd Edition, Jaypee Brothers
Medical Publishers, New Delhi
BM Sakharkar. ‘Principles of Hospital Administration and Planning’. 2 nd Edition,
Jaypee Brothers Medical Publishers, New Delhi
James L Burrow, Brad Kleindl, and Kenneth E Everard. ‘Business Principles and
Management’, Thomson South Western Publication, 12th Edition.
www. Hospital operations Management.com

5

Hospital Operation Management

Uploaded by

Copyright:

Available Formats

You might also like

Hospital Operation Management

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Hospital Operation Management

Uploaded by

Copyright:

Available Formats

Programme Name and Semester: BPT; Semester IV

Course Name (Course Code): Hospital Operations Management (GEHMGM402)

Study Material: Module 1

Faculty Name: Mukta Deb

Faculty Name: Mukta Deb

BUSINESS OPERATIONS – GENERAL MEANING:

MANAGEMENT – GENERAL MEANING:

OPERATIONS MANAGEMENT IN HOSPITALS:

Faculty Name: Mukta Deb

hospitals covers are budgeting, staffing, policy making, patient registration,

Faculty Name: Mukta Deb

o Ensuring the hospital operates according to all legal standards, such as

Main Functions of Operations Management in Hospitals

Tasks Included in Quality Management:

a) Establishing quality standards: This involves developing criteria against which

Faculty Name: Mukta Deb

Tasks Included in Process Improvement:

a) Data collection: Before any improvements can be made, operations managers

Tasks Included in Patient Safety:

SCOPE AND FUNCTIONAL AREAS OF HOSPITAL

ii. Finance Department

 Training and Performance Monitoring

health care systems. Proper management of human resources is imperative in the

The Objective of Financial Management in the Healthcare Sector:

provide the best healthcare treatments to all their patients.

Faculty Name: Mukta Deb

Clinics, Units, Refraction Departments, Registration, Admission Departments etc. are

Faculty Name: Mukta Deb

d. Create integrated Policies and Procedures. Using centralized ordering systems,

CORE OPERATIONAL AREAS OF THE HOSPITAL

Faculty Name: Mukta Deb

DIFFERENCE OF HOSPITAL OPERATIONS COMPARED

Faculty Name: Mukta Deb

MULTIPLE CHOICE QUESTIONS:

1. Identify the functions of the hospital from the following

2. Which of the following statements is TRUE concerning the modern hospital?

3. What distinguishes a district hospital from other types of healthcare facilities?

4. What is a crucial skill for operations managers involved in process improvement?

C) Skill in data collection and analysis

5. Which of the following statements is TRUE about ‘Operations management”?

6. Identify the tasks that operations management at the hospitals cover

7. ‘Management’ is the administration of the --------- organizations

8. Goals of the ‘Management’ include the following EXCEPT

C) To increase the elements of risk

9. Which statement is not TRUE about Hospital Operations Management?

12. The HR functions include the following EXCEPT

Faculty Name: Mukta Deb

A) Recruitment of Doctors and Nurses

13. To ensure which of the following functions, effective Human Resource

14. Choose the function of finance management from the following

15. Which of the following is called coordination?

Faculty Name: Mukta Deb

16. Which of the following departments is concerned with creating, communicating,

Faculty Name: Mukta Deb

20. What is the purpose of utilizing guidelines in hospitals?

22. What is the purpose of ethical guidelines in healthcare organizations?

Faculty Name: Mukta Deb