September 9, 2011
Prescribing New Health Care Efficiencies for the U.S. Navy
The Department of Defense faces increasing health care costs that squeeze its ability to invest in new systems, technologies, and hardware. Health care expenditures in fiscal year 2011 will reach $52.5 billion, more than 250% greater than expenditures in 2001. The Congressional Budget Office predicts that without action to reduce costs, this rate of growth will continue at least through 2019. APL is working with one branch of the service on initiatives aimed at tackling hospital operating costs, while preserving the availability of high-quality medical care.
Industrial engineers and operations researchers in the National Security Analysis Department (NSAD) are conducting process improvement tasks within the Navy's Bureau of Medicine and Surgery (BUMED) that have already increased efficiency and reduced costs in several areas. "We have developed an analytic model that leverages three disciplines—systems engineering, operations research, and industrial engineering," says NSAD's Steve Richter.
Projects are underway at Naval Medical Centers in Bethesda, San Diego, and Portsmouth, Virginia, as well as at several smaller Navy hospitals. "These tasks involve detailed, data-driven evaluation and improvement of key health care delivery and management processes," Richter says, "and are focused within high-cost/high-demand functional areas and clinics, including obstetrics, orthopedics, and pharmacy services."
APL's work in this area dates back to 2007, when BUMED asked the Laboratory to help it develop manpower requirements. "That task allowed us to gather significant knowledge and insight into the special culture of Navy medicine, as well as the unique set of challenges faced by providers and planners—both in the hospital and the field," Richter says.
BUMED turned to APL to examine single functional areas, such as pharmacy operating models. The Navy operates about 120 pharmacies. The high cost of medications, coupled with extended patient wait and service times, spurred BUMED to examine ways to improve pharmacy performance. "BUMED fills about 12 million prescriptions a year, but their automated pill dispensers were outdated, leading to long waits," Richter says. "If patients have to wait too long, they will take their scripts to a Wal-Mart or CVS, and the Navy pays significantly more for that medicine."
To make it easier for the Navy to upgrade this equipment, an APL team led by Kevin Noonan developed a request for proposal (RFP), a common acquisition tool designed to help an organization to make the best purchasing decisions. The team designed the accompanying processes and procedures, and provided detailed pharmacy-by-pharmacy layout drawings.
"These ‘new' pharmacies will have shorter patient wait times, improved patient safety, and a standard Navy-wide configuration that is expected to reduce the cost of the equipment," Noonan says. "And the design is robust enough to enable the recapture of prescriptions currently being filled in commercial pharmacies, without degradation in performance or patient safety."
In another project, NSAD analysts streamlined the purchasing of orthopedic implants, which ensured successful patient outcomes and reduced costs by over $700,000 in a single year. This single-site effort has since blossomed into an enterprise analysis that is just getting under way.
BUMED also asked APL to examine other areas, such as operating room scheduling, obstetrics staff leveling, and streamlining purchases in support of orthopedic procedures. "In many cases, we reached BUMED's objective, and as a result gained significant support from across Navy Medicine," Richter explains ."This is evidenced by the growing list of projects at naval medical centers, hospitals, and clinics—all scheduled at the request of local commanding officers."
For instance, at the National Naval Medical Center in Bethesda (which is in the throes of a merger with the Walter Reed Army Medical Center), NSAD analysts are developing a team-oriented materials management system designed to deliver the right product to the right patient, at the right time, and at the right cost. "We are looking at the movement of materials, supplies, linen, and consumables throughout the hospital campus," Richter says.
National Security Analysis Business Area Executive Greg Melcher says APL is uniquely positioned to provide world-class systems and industrial engineering support to DoD's medical community.
"Familiarity with naval and military culture, a deep understanding of Navy medicine, and a proven analytic model supported by mathematical and analytic expertise have resulted in the creation of a strategic partnership that can be leveraged to support other entities within the military health system," says Melcher. "This partnership positions APL as a key contributor in helping DoD answer a critical challenge that, if not addressed and solved, will have significant and lasting impact on future national security."