Project Management

Healthcare Operations Management
2008 Health Administration Press. All rights reserved.

1
Chapter 5
Project Management

3
Project Management - The Need
EHR Project crisis as example
Now a defined science
Origins in DOD procurement
Evidence based management
Widely used product development,
IT and construction
Can be a strong competitive advantage
Project Management Institute PMI
4
Project Management Institute
1. Intellectual and academic home for the
Project Management profession
2. PMBOK
3. 110,000 members
4. Project Management Professional (PMP)
certification

5
Definition of a project
One time
Multiple tasks
Start and end dates
Specific scope of work
Specified outcomes performance level
Budget
Strategic projects
High value to the organization
Uses a team
Reporting and communications critical
Project can consume up to 50% of some organizations resources (e.g.
health plan)
A project is a problem scheduled for a solution J . M. J uran
6
When to use Project Management

Find it Problem-Solving Project
Fix it Process Management
Complex

Level of
detail and
problem
solving

Simple
Source: Slack 2005.
Used with permission.
7
Project Management Elements

Initiation
& Charter
Scope
Requirements
Project Plan
Scope management
and Work Breakdown
Schedule management
Cost Management
Quality Control
Communications
Risk management
Procurement

Stakeholder
s
Close out

8
Project Selection (Niven)
Criteria Weight Project
A Points
Project
A Score
Project
B
Points
Project
B Score
Linkage to
strategy
45% 7 3.15 1 .45
Financial gain 15% 5 .75 10 1.5
Project Cost 10% 5 .5 10 1.0
Key personnel
required
10% 8 .8 10 1.0
Time to complete 10% 8 .8 10 1.0
Impacts other
projects
10% 3 .3 10 1.0
Total 6.30 5. 95
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Selecting Clinical Projects
What is the frequency of occurrence of the
disease, condition?
What is the likelihood of success? (e.g. is
there broad evidence based clinical
research to support a new care process?)
How large is the performance gap to be
closed? (today versus the ideal)
Source: Gordon Mosser M.D - ICSI
10
Time, Cost, Scope
and Performance
Cost = f (Performance, Time, Scope)
Performance
Scope
Time
Cost
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Increased performance,
less time, same scope means more cost
Performance
Scope
Time
Cost
12
Generic Drug Use Project
Health Plan P4P for program for generic drug use
National average use is approximately 50%
Goal 4% use increase over baseline
P4P payments specific to each clinic
Health Plan goals
Reduce cost of healthcare
Save money for patients
Maximize patient compliance
Clinic Goals
Maintain quality of care
Maximize P4P revenue

13
Project Initiation Scope of work
Stakeholder identification and dialogue
Customer identification
Project Sponsor, Champion
Scope creation
List 3 most important outcomes from stakeholders
List 3 most important outcomes from customers
Combine into specific and measurable objectives
QFD can be used
Project mission statement development
Team determined
Change process determined
Charter document and sign off

14
Generic Drug - Initiation
Stakeholders
Clinicians
Patients (customer)
Clinic staff
Health Plan (customer)
Pharmaceutical firms
Outcomes
Maintain or improve clinical quality of care
(measure reversion to non-generics)
Increase percentage of generic drug prescriptions
Increase P4P revenue from the Health Plan

15
Project Charter Elements
Project mission statement;
Project purpose or justification and linkage to strategic
goals;
High-level requirements that satisfy customers, sponsors,
and other stakeholders;
Assigned project manager and authority level;
Summary milestones;
Stakeholder influences;
Functional organizations and their participation;
Organizational, environmental, and external assumptions
and constraints;
Financial business case, budget, and return on investment
(ROI)
Project sponsor with approval signature.
16
Generic Drug Charter - 1
Mission
This project will implement a system to increase the percentage
of generic drugs prescribed in order to reduce costs to patients,
increase P4P revenue to the clinic while maintaining or
improving the quality of patient care.
Project Purpose and Justification
Health plans have begun to provide additional funding to clinics
that meet pay-for-performance guidelines. It is felt that generic
drug use should be the first P4P project executed because it
likely to be accomplished in a reasonable time frame with the
maximum financial benefit to patients and the clinic.
High Level Requirements
Once completed, a new prescribing process will:
Continue to meet patients clinical needs and provide high-quality
care.
increase generic drug use by 4% percent from baseline within
six months.
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Team
Tom Simpson, Clinic administrator,
Dr. Betsey Thompson Family physician
Sally Humphries, Nursing supervisor
Cindy Tang, Billing manager
Bill Onku, IT vendor support representative
Sally Humphries will be leader with the authority to make
changes in budget time, scope and performance if it is less than
10%
Milestones
Commences January 1
Testing in six weeks
Go live at eight weeks
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Stakeholder Influences
Clinicians will strive to provide the best care for their patients
Patients will need to understand the benefits of this new system
Clinic staff will need training and support tools
Health plans should be a partner in this project as part of the
supply chain
Pharmaceutical firms should provide clinical information on the
efficacy of certain generic drugs
Functional Organizations participation
Clinic management staff will lead.
EHR vendor will perform software modifications.
VVH IT department will support.
VVH main pharmacy department will support.

19
Constraints
Success depends on appropriate substitution of generic for
brand-name drugs.
Patients need to understand the benefits of this change.
Health plans need to continue to fund this project over a number
of years.
IT modifications need to be approved rapidly by the VVH central
IT department.
Finance ROI
Cost =$61,000 for personnel
If 4% increase in generic drug use is achieved revenue should
increase by approximately $37,500 per year
Approximately 1.67 years payback

20
Planning Work breakdown
Identify tasks that are needed to be done
Use experts where possible
Large projects have sub tasks and work packages
Estimate resources required
Peoples time
Other costs
Rule of thumb: Tasks should be 1 3 weeks
Estimate cost of task
Estimate time required
Point estimate
PERT = (Pessimistic + (4*most likely) + Optimistic)/6
Develop responsibility grid RASIC diagram
Develop Linear Responsibility Chart for each staff member
21
Generic Drug
Tasks
Develop clinical strategy
Develop system to inform clinicians of approved
generics
Update systems to assure updated medication
list for patients
Develop Staff education plan
Develop System to monitor performance
Generate Patient education materials

22
Work Breakdown Structure
Generic Drug
Project
Training
Provide patient
education
(9 days)
Train staff
(17 days)
Identify approved
generic drugs
(22 days)
Supply current patient
medication list (33
days)
Develop Clinical
Strategy (10 days)
Develop
Monitoring
System (27 days)
Systems
Management &
Administration
23
RASIC Chart
R= Responsible A=Approval S=Support I=Inform C=Consult

WBS - Tasks
Clinic
Board
Lead MD
Betsy
Thompson
Administrator
Tom Simpson
Proj. Manager
Sally
Humphries
Billing
Cindy
Tang
I.T.
Bill Onku
Develop
Clinical
Strategy
A R C C I I
System to ID
Approved
Generics
A S S R S
Updated
Medication
Lists
R I S I S
Patient
Education
A S S R I I
Staff Education A R C S I
Monitoring
System
A C R C S C
24
Scheduling
Develop network diagram of tasks
Which task must done before another
Maximize tasks to be done simultaneously (in parallel)
Identify constraints
Date start, finish
Cost
Resource constraints (e.g. availability of staff)
Find Critical Path and modify network or times if necessary
Graph with Gantt Chart or diagram
Project can be crashed by shortening the Critical Path
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Generic Drugs 4: Scheduling
Develop
Clinical
Strategy
Patient
Education
Staff
Education
System to ID
approved
generics
Updated
Medication
lists
Monitoring
System
Start
Implement
26
Generic Drugs 4: Critical Path
Develop
Clinical
Strategy
10 days
Patient
Education
9
Staff
Education
17
System to ID
approved
generics
22
Updated
Medication
lists
33
Monitoring
System
27
Start
Implement
58 total
27
Crashing a project
Shortening the duration of work on a task on the critical
path.
Changing a task constraint to allow for more scheduling
flexibility.
Breaking a critical task into smaller tasks that can be
worked on simultaneously by different resources.
Revising task dependencies to allow more scheduling
flexibility.
Setting lead time between dependent tasks where
applicable.
Scheduling overtime.
Assigning additional resources to work on critical-path
tasks.
Lowering performance goals (not recommended without
strong stakeholder consultation)
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Tools MS Project
Tutorial available on companion website

29
Gantt Chart in Excel
Tasks Week 1 2 3 4 5 6 7 8
Task A
Task A1
Task A2
Task B
Task B1
Task B2
Task C
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Earned Value
Combines tracking of both schedule and cost
Budgeted cost of work scheduled (BCWS)
Actual cost of work performed (ACWP)
Budget cost of work Performed (BCWP) also know as
Earned Value
Related metrics
Estimate at completion
Cost Performance Index
Schedule performance index
Critical Index
Best calculated with scheduling software
31
Project Control & Communications
No project is ever executed exactly as was initially planned
Formal process to monitor periodically (weekly, monthly)
What is the actual status
Time
Money
People Resources
Outcomes
If there is a deviation why does it exist?
What should be done
Ignore
Take corrective action to get back on target
Revise the plan (use change control procedure)
Large changes need formal sign off by project sponsor
VVH Generic Drug Project: All changes requiring greater than 10%
in resource use must be approved by Clinic Board of Directors
For large projects use Earned value analysis
Communicate continuously to stakeholders on progress, issues etc.
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Risk management
Identify risks at the beginning of the project
Solutions
Risk avoidance
Mitigation (e.g. contingency plans, funds)
Risk transfer (e.g. insurance)
For complex project use FMEA (Failure modes
and effects analysis)

Generic Drug project - Risks
Generic use decreases quality
Computer systems do not work
Software modifications are more expensive than budget
33
Quality Management
Uses principles in other chapters
Statistical tools
Six Sigma and Quality
Lean
34
Procurement
Contracting
Fixed price
Cost reimbursement
Time and materials
Selecting vendors
RFIs
RFPs
Payment based on Earned Value

35
PMO and Closure
Project Management Office (PMO)
Structure to manage all projects in an
organization
Centralized scheduling, resource allocations,
and monitoring
Project Closure
Close out staff redeployment
Documents stored and indexed
Lessons learned should be communicated
36
Team skills
Maintaining operations and moving projects forward
The weekly staff meeting
Operations BSC and other Metrics
Projects - Progress and problem solving
Getting things done
Clear accountability
Adequate resources
Documentation
37
Team skills - 2
Staff contributions at Meetings
Take responsibility for the success of the
team
Follow through on commitments
Contribute to discussions
Actively listen
Get your message across clearly and
succinctly
Give useful feedback
Accept feedback easily
38
Team skills - 3
Meeting Ground rules
Agendas
Decision making (who, process)
Use of data
base decisions on data
Confidentiality
Assignments
need to be done on time or notify leader
Participation
Everyone has a voice
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Team skills - 4
Meeting Closure
Did we accomplish our purpose?
Did we take steps to maintain our gains?
Did we document - actions, results, ideas?
Did we work together successfully?
Did we share our results with others?
Did we recognize everyones contribution
and celebrate our achievements?

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Dialogue Connectivity
0
5
10
15
20
25
30
35
Low Medium High
Connectivity
Number
of Nexi
per 50
minute
meeting
Performance: Profitability, customer satisfaction, 360
degree assessments
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Dialogue Low Performance

Performance
Connectivity
Inquiry
Advocacy
External
Internal
Positivity
Negativity
Source: Marcial Losada, The Role of Positivity and Connectivity in the
Performance of Business Teams, American Behavioral Scientist, February
2004
42
Dialogue High Performance

Performance
Connectivity
Inquiry
Advocacy
External
Internal
Positivity
Negativity
6 to 1
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Class Exercise
1. Form Groups
2. Identify one future project
3. List stakeholders and project sponsor
4. Develop brief estimate of Charter elements (Timeline,
Budget, Performance level)
1. Use Post-its to develop WBS with estimated durations
2. Do Gantt Chart or network diagram
3. Identify three highest risks and develop mitigation plan
4. Develop project control process
5. Report back
End of Chapter 5

Project Management

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Project Management

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Healthcare Operations Management

2008 Health Administration Press. All rights reserved.

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