SystemsSystemsTheoryTheory

ObjectivesObjectives• Students will be able to:Students will be able to:

• Describe systems theory and its components. Describe systems theory and its components. • Construct a general systems model using inputs, throughputs and a Construct a general systems model using inputs, throughputs and a

feedback loop. feedback loop. • Construct a health care delivery system model. Construct a health care delivery system model. • Predict where and how factors such as cost, managed care, technology, Predict where and how factors such as cost, managed care, technology,

and aging population, access to care, alternative therapies, and and aging population, access to care, alternative therapies, and lifestyle behavior may affect various health delivery system models. lifestyle behavior may affect various health delivery system models.

• Predict outcomes as interconnected components of modified health Predict outcomes as interconnected components of modified health care delivery systems using the same client procedures. care delivery systems using the same client procedures.

• Design a system analysis process that evaluates the following Design a system analysis process that evaluates the following outcomes: client satisfaction, productivity, cost effectiveness, and outcomes: client satisfaction, productivity, cost effectiveness, and efficiency. efficiency.

• Analyze the cause and effect on health care system change based on Analyze the cause and effect on health care system change based on the influence of technology epidemiology, bio-ethics, socioeconomic the influence of technology epidemiology, bio-ethics, socioeconomic and various forms of complimentary medicine. and various forms of complimentary medicine.

System DefinitionSystem Definition

A system is an A system is an orderly and orderly and complex complex arrangement of arrangement of parts.parts.

There are many types of There are many types of systems:systems:

Physiological SystemsPhysiological Systems: The digestive : The digestive system, neurological system, and system, neurological system, and circulatory systemcirculatory system

Economic SystemsEconomic Systems: Capitalism and : Capitalism and SocialismSocialism

Computer SystemsComputer Systems: Network, : Network, mainframe, and PC computer systemsmainframe, and PC computer systems

Systems TheorySystems Theory

• A way of studying a system A way of studying a system as one unit, instead of as one unit, instead of individual parts.individual parts.

• By examining a system as By examining a system as a whole, it is easier to a whole, it is easier to understand how each part understand how each part contributes to the overall contributes to the overall missionmission

Systems, in general, have the Systems, in general, have the following elements:following elements:

InputInput:: Resources entering the system Resources entering the systemThroughputThroughput:: Work done on those Work done on those

resources used to produce a productresources used to produce a productOutputOutput:: The final product The final productFeedbackFeedback:: Information taken from the Information taken from the

output to control or correct errors output to control or correct errors in in throughputthroughput

System ComponentsSystem Components

Example of Payroll SystemExample of Payroll System InputInput:: Information entered on the Information entered on the

number of hours worked and the number of hours worked and the pay rates of each employee.pay rates of each employee.

ThroughputThroughput:: The work done by the The work done by the computer to calculate the amount computer to calculate the amount of pay, and the payroll taxes.of pay, and the payroll taxes.

Example of Payroll SystemExample of Payroll System

OutputOutput:: The paychecks and The paychecks and payroll reports.payroll reports.

FeedbackFeedback:: Check figures provided Check figures provided to show that the calculations were to show that the calculations were correct (number of employee correct (number of employee paychecks processed, total payroll paychecks processed, total payroll paid, etc.)paid, etc.)

Systems ThinkingSystems Thinking

• One approach to problem solving is One approach to problem solving is systems thinkingsystems thinking, or , or systems systems analysisanalysis..

• It expands analysis to include the It expands analysis to include the system as a whole, and the system as a whole, and the relationship of interconnected parts.relationship of interconnected parts.

• It recognizes that the whole is It recognizes that the whole is greater than the sum of the parts.greater than the sum of the parts.

Backwards ThinkingBackwards Thinking

Systems thinking involves Systems thinking involves backwards backwards thinking.thinking.

It begins with the end objective, and It begins with the end objective, and works backward, analyzing the works backward, analyzing the relationship of each component to the relationship of each component to the final objective.final objective.

Example of Backward Example of Backward ThinkingThinking

If the objective of a team is to produce a If the objective of a team is to produce a low cost but high quality medical product, low cost but high quality medical product, then backwards thinking would start with then backwards thinking would start with the final end product, then evaluate each the final end product, then evaluate each input and throughput to see if:input and throughput to see if:

It was necessary to the manufacture It was necessary to the manufacture of the productof the product

It increased qualityIt increased quality It reduced costIt reduced cost

Advantages of Systems Advantages of Systems ThinkingThinking

Is a global approach to problem Is a global approach to problem solvingsolving

Helps employees Helps employees “see the forest “see the forest for the trees.”for the trees.”

Enables team members to Enables team members to understand the big picture. understand the big picture.

Advantages of Systems Advantages of Systems ThinkingThinking

Focus: Focus: Systems thinking allows Systems thinking allows problem solvers to identify cause problem solvers to identify cause and effect relationships. It focuses and effect relationships. It focuses on the activities necessary for on the activities necessary for change.change.

Cause Effect

Advantages of Systems Advantages of Systems ThinkingThinking

Teambuilding: Teambuilding: Systems thinking Systems thinking helps team members helps team members identify the objective identify the objective of the team, and of the team, and understand how their understand how their individual activities individual activities contribute to that contribute to that objective.objective.

The American The American Healthcare Delivery SystemHealthcare Delivery System

The American healthcare delivery The American healthcare delivery system is one of the largest and system is one of the largest and most complex systems in the most complex systems in the world. world.

We model it by adapting the We model it by adapting the generic system shown earlier.generic system shown earlier.

The American The American Healthcare Delivery SystemHealthcare Delivery System

Let’s discuss each of the Let’s discuss each of the elements:elements:

InputsInputs

Human and financial Human and financial resourcesresources

PatientsPatients

Human and Financial Human and Financial ResourcesResources

Human resourcesHuman resources are the professionals are the professionals who diagnose and treat patients, as well who diagnose and treat patients, as well as the personnel who provide as the personnel who provide support support servicesservices. .

Human resources consist of the doctors, Human resources consist of the doctors, nurses, respiratory therapists, certified nurses, respiratory therapists, certified nurse assistants, administrators, nurse assistants, administrators, dieticians, housekeepers, and dieticians, housekeepers, and accountants that work within the accountants that work within the healthcare delivery system.healthcare delivery system.

PatientsPatients

Patients are the Patients are the individuals who individuals who enter the system enter the system for preventive, for preventive, diagnostic, or diagnostic, or treatment treatment healthcare healthcare services.services.

Entry PointEntry Point

• An efficient healthcare delivery system

must have a well defined entry point.

Entry PointEntry Point

How does a 55 year old male with How does a 55 year old male with vertigo know where to enter the vertigo know where to enter the system?system?An ambulance?An ambulance?A general practice doctor?A general practice doctor?A neurologist?A neurologist?The emergency center?The emergency center?

A well-defined entry point A well-defined entry point provides:provides:

Triage (screening to determine Triage (screening to determine priority of treatment)priority of treatment)

Timely entry into the systemTimely entry into the system

Access to cost effective resourcesAccess to cost effective resources

ThroughputThroughput

Throughput is the Throughput is the step where the step where the patient is treatedpatient is treated

Resources Used in Resources Used in ThroughputThroughput

Educational resourcesEducational resourcesTreatment resourcesTreatment resourcesFinancing mechanismFinancing mechanismManagement and control Management and control Information and feedback systemsInformation and feedback systems

Educational ResourcesEducational Resources

Medical schoolsMedical schools Nursing schoolsNursing schools Public health Public health

educationeducation Preventive Preventive

healthcare healthcare educationeducation

Treatment ResourcesTreatment Resources

DoctorsDoctors NursesNurses Hospitals Hospitals Outpatient clinicsOutpatient clinics Well baby clinicsWell baby clinics Etc.Etc.

What kind of What kind of servicesservices are provided in are provided in “throughput”?“throughput”?

PreventivePreventive - healthcare services - healthcare services designed to keep the student welldesigned to keep the student well

DiagnosticDiagnostic - healthcare services to - healthcare services to find out what is wrong with the find out what is wrong with the patientpatient

TreatmentTreatment - healthcare services to - healthcare services to cure the patientcure the patient

Financing MechanismFinancing Mechanism Someone has to pay Someone has to pay

the bill!the bill! Who pays?Who pays?

The patients The patients themselves (self-pay)themselves (self-pay)

EmployersEmployers Private insurance Private insurance

companiescompanies MedicareMedicare MedicaidMedicaid The health insurance The health insurance

industry itselfindustry itself

Self-paySelf-pay

Some patients pay for their own Some patients pay for their own healthcare. These are the self-healthcare. These are the self-employed, uninsured employed, employed, uninsured employed, and the unemployed. and the unemployed.

EmployersEmployers Many companies provide employee Many companies provide employee

health insurance. The benefits vary health insurance. The benefits vary widely. Most firms require that the widely. Most firms require that the employee pay a portion of the premium. employee pay a portion of the premium.

Almost all firms require cost sharing Almost all firms require cost sharing through through co-paymentsco-payments at the time of at the time of service. service.

As healthcare costs continue to increase, As healthcare costs continue to increase, it appears that the employee will pay a it appears that the employee will pay a larger and larger percentage of total larger and larger percentage of total health insurance premiums. health insurance premiums.

Private InsurancePrivate Insurance

Some people purchase individual or family Some people purchase individual or family policies from health insurance carriers. policies from health insurance carriers.

These are usually more costly than the These are usually more costly than the group insurance contracts purchased by group insurance contracts purchased by employers.employers.

In addition, coverage is often limited, and In addition, coverage is often limited, and

some individuals are unable to qualify for some individuals are unable to qualify for coverage. coverage.

MedicareMedicare

Medicare is a Medicare is a federally funded federally funded program that pays program that pays for some healthcare for some healthcare products and products and services for those services for those sixty-five years of sixty-five years of age and older. age and older.

MedicaidMedicaid

Medicaid is a state-funded Medicaid is a state-funded program that pays for some program that pays for some healthcare products and services healthcare products and services of the poor. of the poor.

Benefits, and enrollment criteria Benefits, and enrollment criteria vary dramatically from state to vary dramatically from state to state. state.

The Healthcare IndustryThe Healthcare Industry

Many healthcare providers, most Many healthcare providers, most specifically hospitals, are expected to specifically hospitals, are expected to provide charity care in return for non-profit provide charity care in return for non-profit exemption from income and property exemption from income and property taxes.taxes.

Most hospitals also have large amounts of Most hospitals also have large amounts of bad debtbad debt. .

Many hospital emergency centers, for Many hospital emergency centers, for example, collect less than 50% of billings. example, collect less than 50% of billings.

Ultimately, the consumer pays these costs.Ultimately, the consumer pays these costs.

National Health Insurance?National Health Insurance? In future years, it is possible In future years, it is possible

that the government will that the government will replace the many replace the many mechanisms currently used mechanisms currently used to pay for healthcare by to pay for healthcare by some kind of universal some kind of universal financing mechanism. financing mechanism.

What form this mechanism What form this mechanism

will take remains to be seen.will take remains to be seen.

Management and Control Management and Control MechanismsMechanisms

The American healthcare system The American healthcare system has many management and control has many management and control mechanisms. mechanisms.

These include private and public These include private and public planning and regulatory agencies, planning and regulatory agencies, licensure bodies, and legislative licensure bodies, and legislative mandates. mandates.

Information SystemsInformation Systems

Control is ineffective Control is ineffective without feedback.without feedback.

Information systems Information systems include the financial and include the financial and cost accounting systems cost accounting systems used by hospitals and used by hospitals and other healthcare other healthcare organizations. organizations.

Output is the product of the Output is the product of the system.system.

How do you think How do you think we should define we should define the product the product offered by the offered by the healthcare healthcare delivery system?delivery system?

Possible OutputsPossible Outputs

A patient?A patient?A hospital admission?A hospital admission?A patient day?A patient day?An individual service like an An individual service like an

appendectomy?appendectomy?A healthy community?A healthy community?Some other definition?Some other definition?

The healthcare The healthcare delivery system is like a delivery system is like a mobilemobile

Movement or Movement or pressure on one pressure on one component exerts component exerts pressure on pressure on others.others.

ExampleExample

Successful pressure to reduce Successful pressure to reduce costs (one barrier to entry) will costs (one barrier to entry) will affect the volume of patients affect the volume of patients entering the system (input) and entering the system (input) and the number seen by the system the number seen by the system (throughput).(throughput).

ExampleExample

Greater volumes of patients Greater volumes of patients entering the system (input) and entering the system (input) and being seen by the system being seen by the system (throughput) could cause the (throughput) could cause the finance mechanism (another finance mechanism (another component of throughput) to component of throughput) to flounder or fail.flounder or fail.

ExampleExample

More resources spent for More resources spent for prevention will decrease resources prevention will decrease resources needed for diagnosis and needed for diagnosis and treatment, both components of treatment, both components of throughput.throughput.

SummarySummary

The healthcare industry is a complex system with many interrelated components. It is impossible to change one component of the system without influencing others. Some people have attempted to fix the American healthcare delivery system by focusing on one or more “broken components.” By failing to consider the “big picture,” they have often been met with unintended consequences. Those wishing to address problems of quality, cost, and accessibility must take a systems approach.

Discussion Question 1Discussion Question 1

Define the word “system” and give Define the word “system” and give several examples of systems. several examples of systems.

DefinitioDefinitionn

A system is an orderly and A system is an orderly and complex arrangement of parts.complex arrangement of parts.

Examples of systems:Examples of systems:

Physiological SystemsPhysiological Systems: The : The digestive digestive system, neurological system, neurological system, and system, and circulatory systemcirculatory system

Economic SystemsEconomic Systems: Capitalism : Capitalism and and SocialismSocialism

Computer SystemsComputer Systems: Network, : Network, mainframe, and PC computer mainframe, and PC computer systemssystems

Discussion Question 2Discussion Question 2

What are the four What are the four components of a system? components of a system?

System ComponentsSystem Components

Discussion Question 3Discussion Question 3

Explain what Explain what “backwards “backwards thinking” is as it thinking” is as it relates to relates to systems: systems:

Backwards ThinkingBackwards Thinking

Systems thinking involves Systems thinking involves backwards backwards thinking.thinking.

It begins with the end objective, and It begins with the end objective, and works backward, analyzing the works backward, analyzing the relationship of each component to the relationship of each component to the final objective.final objective.

Discussion Question 4Discussion Question 4

The healthcare delivery The healthcare delivery system is like a mobile. system is like a mobile. Pressure or movement Pressure or movement exerted on one exerted on one component exerts component exerts pressure others. pressure others.

Give an example: Give an example:

ExampleExample

Successful pressure to reduce Successful pressure to reduce costs (one barrier to entry) will costs (one barrier to entry) will affect the volume of patients affect the volume of patients entering the system (input) and entering the system (input) and the number seen by the system the number seen by the system (throughput).(throughput).

ExampleExample

More resources spent for More resources spent for prevention will decrease resources prevention will decrease resources needed for diagnosis and needed for diagnosis and treatment, both components of treatment, both components of throughput.throughput.

ExampleExample

More resources spent for More resources spent for prevention will decrease resources prevention will decrease resources needed for diagnosis and needed for diagnosis and treatment, both components of treatment, both components of throughput.throughput.

Changes in Changes in Today’s Health Care Today’s Health Care

SystemsSystems

Advances in technologyAdvances in technologyEpidemiologyEpidemiologyBio-ethicsBio-ethicsSocioeconomicsSocioeconomicsComplementary (nontraditional) Complementary (nontraditional)

medicinemedicine

The End!The End!