A more total approach to productivity improvement

Increasing reimbursement pressures now compel hospitals to be more cost effective. But traditional methods for productivity may not be adequate to meet the new demands of a turbulent environment. Typical productivity programs reflect two approaches. First, more efficient production controls result in more output of work per man-hour. Second, a more rational management system seeks efficiency through better goal-setting, coordination, and problem solving. This article focuses on a third approach: hospital adaptation, through which the hospital's total productivity capacity is utilized. Strategic planning, marketing, reorganization, and other strategies represent a new context. They are the latest frontier for using hospital resources in socially effective and economically efficient ways. There is also greater involvement of the hospitals' medical staff in controlling costs and utilization. The combination of these approaches can be a powerful means for realizing productivity improvement.