Review article: review of behavioral operations experimental studies of newsvendor problems for operating room management.

Operating room (OR) managers must plan staffing in the face of uncertain demand for OR time. Planning too much staffing results in underutilized OR time. Planning too little staffing causes overutilized time, which is approximately twice as expensive as underutilized time. Deciding how much staffing to plan for an OR is analogous to the classic newsvendor problem in operations research. A newsvendor must decide how much product to order based on its cost c and sales price p, plus estimates of the uncertain future demand for the product. The newsvendor problem has a simple mathematical solution. The correct amount of product to order is the (p - c)/p quantile of the demand for the product. This optimal order quantity is analogous mathematically to the number of hours of OR time for which staffing should be planned. We performed a systematic review of the behavioral operations experimental literature on newsvendor problems relevant to OR management. Student volunteers participating in experimental studies have great difficulty knowing how much product to order, given c, p, and the demand distribution. Decision making is only modestly improved by more frequent feedback. Even scores of rounds of ordering are insufficient for much learning to occur. Suboptimal decisions result from innate psychological biases. Students anchor on mean demand, make insufficient adjustments, and rely disproportionately on the most recent demand values. The behavior of OR managers who plan staffing for the OR is analogous to that of students participating in a newsvendor experiment. Month after month, an OR manager will plan too little staffing for the surgeon who consistently ends the day late and too much staffing for the surgeon who consistently does not fill an OR. Experimental studies of the newsvendor problem provide mechanistic insights into the reasons that OR managers make poor decisions when planning OR staffing. The students face no organizational factors or personality issues that potentially influence OR managers, strongly suggesting that observed psychological biases are innate and play an important role in influencing the decisions of OR managers. Results suggest that only the use of computerized decision-support systems can effectively circumvent these biases.

The Employee Absenteeism Costs of Rheumatoid Arthritis: Evidence From US National Survey Data.

OBJECTIVE: To estimate indirect costs associated with rheumatoid arthritis (RA). METHODS: This was a retrospective study using 1996-2006 US Medical Expenditure Panel Survey data. Employed individuals were aged 18 to 65 years. A two-part model estimated the probability of time lost from work and annual number of workdays missed due to illness. RESULTS: Sixty-seven percent (209/312) of RA individuals missed work versus 58% (52,046/89,734) of those without RA (P = 0.0007). Among individuals who missed work, those with RA missed more workdays annually than those without RA ((Equation is included in full-text article.)= 13.659, 9.879, respectively; P = 0.008). Incremental per capita costs in annual lost workdays between those with and without RA were $596. Estimated national indirect costs of RA-related absenteeism were $252 million annually. CONCLUSIONS: Individuals with RA have higher probabilities of missing work and missing workdays than those without RA.

Pulling the right economic levers.

Efforts throughout your restructuring program should be as focused as your targets. If you are targeting large amounts of savings through infrastructure reduction, push for extensive service redeployment, implement new operational enablers and reexamine burdensome policies. If the savings are expected to come from skill mix reduction, analyze the workload, study licensure laws, get comfortable with competency thresholds and understand training costs. If management hierarchy reduction is the key, then put in place qualified managers, foster employee involvement to optimize SDWTs and modify your environment to reward risk taking and initiative. Lastly, if reduced LOS is the savings opportunity, rethink your patient groups. LOS reduction can also be achieved through improved care team continuity with physicians and patients. Understanding how your savings opportunities are influenced by ++your project decisions, direction and emphasis, will help you pull the "right" economic levers to meet your goals. Ultimately, that economic health will allow you to continue to provide uncompromised care and service quality to your communities.

Reengineering: forty useful hints.

Business Process Reengineering (BPR) principles have been around for a long time, piecemeal and under other labels. In recent years they started coming together as a discipline, incorporating world class business principles and focusing on quantum improvements--not merely continuous gradual improvement. BPR is the complete or partial "reinventing" of how business processes are done to attain major performance improvement. It questions the underlying assumptions and principles, including what, why, by whom, and even if things should be done. This article will contribute by stating and helping to clarify a number of important principles, plus some useful insights, techniques, and hints--40 in all!