Case 5-2: Health Maintenance Organization (B)
Case 5-2: Health Maintenance Organization (B)
Case 5-2: Health Maintenance Organization (B)
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Product Description<br />
<strong>Case</strong> 5-2: <strong>Health</strong> <strong>Maintenance</strong> <strong>Organization</strong> (B)<br />
The administrator of the Life-Time Insurance Company HMO, Ms. Taylor, was anxious to<br />
solve potential problems before the new clinic opened in Austin, Texas. In Buffalo, New<br />
York, where the original clinic is located, the pharmacy had been extremely busy from the<br />
beginning, and long waiting times for prescriptions to be filled presented a very real problem.<br />
The Buffalo HMO pharmacy was modern, spacious, and well designed. The peak time for<br />
prescriptions was between 10 AM and 3 PM. During this period, prescriptions would back<br />
up, and the waiting time would increase. After 5 PM, the staff would be reduced to one<br />
pharmacist and one technician, but the two had no trouble providing very timely service<br />
throughout the evening.<br />
Ms. Taylor became acutely aware of the long waiting times after several complaints had<br />
been lodged. Each stated that the waiting time had exceeded 1 hour. The pharmacy is<br />
staffed with five persons on duty until 5 PM.<br />
Ms. Taylor personally studied the tasks of all the pharmacy personnel. She noted the time<br />
required to accomplish each task, and her results are listed below. The prescriptions were<br />
filled in an assembly-line fashion by two technicians and three pharmacists, and each person<br />
performed only one task.<br />
Activity<br />
Time in Seconds<br />
Receive prescriptions 24
Type labels 120<br />
Fill prescriptions 60<br />
Check prescriptions 40<br />
Dispense prescriptions 30<br />
Note: The activities of filling, checking, and dispensing prescriptions must be performed by a<br />
registered pharmacist.<br />
Questions<br />
a) Draw the diagram of the current service line. Identify the bottleneck activity. What is the<br />
cycle time and capacity of the current process?<br />
b) Show how capacity can be increased by using only two pharmacists and two<br />
technicians. Draw the diagram of the revised line layout. What are the cycle time and<br />
capacity of the revised process?<br />
c) In addition to savings in personnel costs, what benefits does this arrangement have?
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