How to use KEP

The main aim of this text is to provide a manual for better understanding of KEP and to describe how to use it. Since it is the context that gives the meaning to the words, we shall first explain, in what context we understand the terms "hospital" and "KEP".

Context of the word "hospital"

  • The main role of a hospital is to provide diagnostic and medical services as required by the physicians during clinical care. In order to fulfil this role, hospital provides as well certain hotel and social services.
  • Unlike other producers who aim at effective and low-cost production, in the service sector this perception is not as obvious
  • Moreover, production of goods has the advantage of already existing standards and criteria for the usage of material, work and equipment. In such production, the quality and effectiveness are under constant control and measurement, including checkouts, their feedback and the production process is thereafter adjusted accordingly. Whereas in the medical process (i.e. service sector), it is more difficult to set adequate and universal criteria.
  • Furthermore, we need to take into consideration that a hospital constists of various management levels that administer particular service units. Therefore, when we concentrate on the control of these service units, we still do not control the essential function of a hospital.

Context of the word "KEP"

  • KEP is a production/process benchmarking tool. Process benchmarking is a traditional method of increasing the effectiveness in industry by overtaking the correct production practice. Since the end of the last century it has spread to service sector and now even to the sector of health care services.
  • KEP describes economic effectiveness of medical processes. KEP do not aspire to evaluate who is a good or a bad doctor, it only enables to measure and evaluate medical processes - it makes the spheres visible, where the processes in medical care organisation are ineffectively set up. This is the main role of the DIVERSITY set - i.e. a tool of cost stability analysis, which is a standard part of the KEP set.
  • Once KEP defines such ineffective areas, it is usefull to objectivise them and prove whether or not it is a solvable ineffectiveness (or whether it is worth solving it according to its importance).
  • KEP is a tool for anyone who is interested in productivity in the health sector and who searches for optimal process set up.

How to use KEP

  • Within the framework of KEP you will get a html KEP file (8 costs segments and 8 complementary characteristics) and a html DIVERSITY file (cubes describing production cost homogenity at particular areas of your productivity.
  • Firstly, start with the DIVERSITY file: it will show you which areas of your production have non-homogeneous costs (darker tinge of the middle cube); then, have a look whether such a non-homogeneous area is significant with regard to costs (this you will detect according to the tinge of the same area on the cube of costs on the left side). As a result of this first analysis, you will see which areas of your production (on the level of bDRG) are potentially threatened by ineffectiveness and how significant such an ineffectiveness can be, financially speaking. Next, you should revise the clinic process organisation within the ineffective area (e.g. clinic process organisation in the operating room, ICU hospitalisations, length of standard bed hospitalisation etc.).
  • then, we recommend to compare the KEP results with the results of some other hospital or with a set of standard values. The annual comparison of data from the same provider might be as well very usefull. As already mentioned in the introduction, you will use KEP foremost as a benchmarking tool for a transmission of good production practice, so once there is a chance to be compared, use it! As a result you might find out, that even the processes you thought to be well managed, which is to say, relatively homogeneous with regard to costs (for instance within the bDRG group), are actually costly in comparison with another relevant provider. Benchmarking shows, where you should gather your strength and which results you should try to achieve (i.e. what is your realistic goal).
  • In case your medical processes are stable (with low-cost variability) and they will succeed in comparison with others (on the level of time and organisation effectiveness), it is still possible that you produce for higher costs than others. This is connected with the double production function of a hospital (see below). In such case, an audit of unit costs should follow for all sources used in the medical processes (such as the price of deliveries, equipment, medication, workforce etc.).

The aforementioned manual tests the stability of production processes using benchmarking and it shows their comptetitiveness and it reflects the double production function of a hospital:

  • conversion of sources into medical activity
  • decision on medical activities in order to cure (solve health problems of patients)

It is foremost the second function, which is the main role of a hospital as an institution, and it is as well this function, which is to the highest degree responsible for the differences in effectiveness of particular hospitals. Success in the first function depends on the quality of the service unit control, whereas succes in the second one (the most significant) depends on the quality of medical process control.