BOOKS OF RtfiDIfGS - PAHO/WHO

plex stochastic distribution of arrivals
and census data 132, Chap. 7].
These models should be quite useful
for determining target bed sizes of
hospitals. When applied to institutional
planning, the need for cooperation
between health facilities is apparent.
The technology has not been developed
to the same degree for sizing
ancillary departments. (Useful studies
include those by Thomas and Stokes
[331], and Conrad et al. 1341.)
Support Services. All organizations
incur systems' costs for "overhead programs."
The mix, scope, and level of
such programs must be addressed in
the programming phase. Neumann (351
discusses why such programs often go
unevaluated and how organizations
have a natural tendency to foster their
growth. Overhead value analysis [351
and functional value analysis [361 are
pragmatic methods for evaluating the
worth of such overhead programs tosthe
organization.
For almost every overhead service,
there is an implicit "make versus buy"
decision. Increasingly, hospitals are
buying many services (e.g., management
contracts, food services, data processing,
etc.) and increasingly, hospitals
are looking to shared service arrangements
with other hospitals for fiscal
services, purchasing, laundry, etc.
Programs to Improve Production Efficiency
and Effectiveness. Significant
cost savings can be achieved by implementing
contemporary' admissions
scheduling systems, preadmission testing,
concurrent review, and outpatient
surgery [371. Successful implementation
of these methodologies requires
considerable advanced planning/programming
to develop the requisite data
systems [38] and to develop the necessary
support from critical actors in the
system [39]. The involvement in this
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Health Services Research
planning process of all affected parties
and the "top-down" support is essential
to the successful implementation of
these efficiency methodologies.
The importance of these methodologies
in the efficient management of
patient services should be noted. A
hospital which for example does not
have a preadmission testing program
and outpatient surgery will experience
a higher inpatient census than if the
hospital had the programs. Using the
approaches described above, this
higher demand will be translated into
more hospital beds. Thus, for the same
medical services, a larger inpatient facility
would be justified. In addition, if
'admission and operating room scheduling
systems were not used, the variance
of admissions would likely be higher,
thus justifying more beds for the same
target occupancy. In both cases, implementation
of these efficiency technologies
will tend to reduce the number
of necessary beds for the service
population. If the facility resizes accordingly,
it will probably increase
outpatient expenses, but there should
be net savings.
It is through the programming decisions
identified above and in Figure 2
that hospitals can plan in advance how
to allocate resources and provide facilities
and services which meet the needs
of the population served, while minimizing
capital and operating costs.
These decisions provide the context
within which budgeting and control
decisions are made and, to a large
extent, set the stage for a hospital's
level of production efficiency and effectiveness.
The major cost-related decisions
are program decisions; budgeting
and control can be viewed as fine
tuning.
Budgeting Phase
The programming decisions provide
the fiscal officer alid budget committee