Case 5-1: Health Maintenance Organization (A)

In January 2012, Joan Taylor, the administrator of the Life-Time Insurance Company HMO in Buffalo, New York, was pleased with the Austin, Texas, location that was selected for a new ambulatory health center. (The process used to select this site is discussed in Chapter 8.) The center not only would serve as a clinic for the acutely ill but also as a center for preventive health services.

An important goal of the HMO was to offer programs that would encourage members to stay healthy. Various programs already had been planned, including those on smoking cessation, proper nutrition, diet, and exercise.

The clinic portion of the health center would be quite large; however, certain constraints in the layout would be necessary. Acutely ill patients would need to be separated from well patients. In addition, federal safety regulations prohibited the radiography department from being adjacent to the main waiting room.

It was very important to Ms. Taylor to minimize the walking distance for both the patients and the HMO personnel. The matrix below provides the expected flow between departments based on 35 patients per day.

Questions

Assuming that the direction of travel between each pair of departments can be ignored, convert the flow matrix into a triangular flow matrix.

Determine the total travel for the current layout given below. Assume a distance of 1 unit between adjacent departments and rectilinear travel (travel in perpendicular directions). For example, the distance between departments A and B is equal to 1 unit. The distance between A and C is 2 units and the distance between A and F is 3 units.

Follow a systematic process to develop an improved layout to minimize the total walking between different areas of the clinic. Show all steps in the process. Note: The departments B and E cannot be adjacent based on the case. There are no other restrictions.

Show that the layout proposed by you is better than the current layout. Note: Compute the total travel for the improved layout and compare it with the total travel for the current layout.

Case 5-2: Health Maintenance Organization (B)

The administrator of the Life-Time Insurance Company HMO, Ms. Taylor, was anxious to solve potential problems before the new clinic opened in Austin, Texas. In Buffalo, New York, where the original clinic is located, the pharmacy had been extremely busy from the beginning, and long waiting times for prescriptions to be filled presented a very real problem.

The Buffalo HMO pharmacy was modern, spacious, and well designed. The peak time for prescriptions was between 10 AM and 3 PM. During this period, prescriptions would back up, and the waiting time would increase. After 5 PM, the staff would be reduced to one pharmacist and one technician, but the two had no trouble providing very timely service throughout the evening.

Ms. Taylor became acutely aware of the long waiting times after several complaints had been lodged. Each stated that the waiting time had exceeded 1 hour. The pharmacy is staffed with five persons on duty until 5 PM.

Ms. Taylor personally studied the tasks of all the pharmacy personnel. She noted the time required to accomplish each task, and her results are listed below. The prescriptions were filled in an assembly-line fashion by two technicians and three pharmacists, and each person performed only one task.

Note: The activities of filling, checking, and dispensing prescriptions must be performed by a registered pharmacist.

Questions

Draw the diagram of the current service line. Identify the bottleneck activity. What is the cycle time and capacity of the current process?

Show how capacity can be increased by using only two pharmacists and two technicians. Draw the diagram of the revised line layout. What are the cycle time and capacity of the revised process?

In addition to savings in personnel costs, what benefits does this arrangement have?