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Application of "Value Engineering" to Rationalize the Cost of Cataract Surgery in Eye Clinic at Tata Main Hospital

S.P. Jakhanwal, G.B. Singh

Page 5

Topics

2. Effect of Implementation of Recommendation. No. 3:

Savings per Patient operated on 1st day = Rs. 200.00

Saturdays: Total number of operations on Saturdays 150 in the Year

Total Saving due to 200 × 150 = Rs. 30,000.00

Recommendation No. 3:

Total Saving by implementing Recommendations: 2,20,000 + 30,000 = Rs. 2,50,000 in one year.

3. Feed-back from patient/Customer (Beneficiary of Cataract Surgery):

Total No. of Responses Noted: 462; PC expressed in nearest integer.

  Happy Unhappy Indifferent
On stopping of admission one day prior to operation: 370 – (80%) 78 – (17%) 14 – (3%)
On stopping Post operative day stay: 277 – (60%) 153 – (33%) 32  – (7%)

Thus, patients in general appeared satisfied with the changed system.

Discussion

“Value Engineering” has been considered essentially an Industrial tool for several decades, but of late it has been utilized by Industry and Government agencies for diverse applications.

World War II was an acute survival stress period when innovation was required because of shortage of materials. Some critical materials were difficult to obtain and a great many substitution had to be made. These changes often resulted in lower cost and improved product. Harry Erlicker, Vice President of Purchasing at General Electric Co. (GEC) keenly observed this. Encouraged by this observation, in 1947 Lawrence D.Miles of GEC was assigned to Purchasing Division to study a new design concept. He developed a technique, which he named “Value Analysis” to generate cost saving based primarily on analysis of product function and cost. In 1952 he conducted first “Value Analysis Workshop Seminar”.

In 1954 US Navy applied this tool to “cost improvement during design” called “Value Engineering”. Result proved so rewarding that the programme was rapidly expanded in 1958. D.Miles was awarded US Navy highest Civilian Honour. This programme was further adopted by US Army Corp. of Engineering; and US Postal Services. In 1971, Us Dept of Health, Education and Welfare adopted “VE” on selected construction project. Perceiving outstanding result of this technique, growing segments of American industry have adopted these concept to improve product and profit, and enhance competitive position. Iyer (1996) has provided a brief history of “VE”. Presently the concept and technique of “VE” are showing progressive growth and it is making its headway in both industry and government world-wide.

As the “VE” provides an organized systematic approach to the problem of reducing cost and improving product performance the concept could profitably be applied to Medical Service field also. This particularly suitable project was therefore conceived to test the validity of application of this “industrial tool” to bring about “cost reduction” with “improved performance” in the medical field. The field chosen for present application was Cataract Surgery at our Institution for reasons already mentioned. The result, presented and discussed in this paper, have provided encouraging signal: an estimated saving of Rs. 2,50,000.00 in one year with improved service to the patient, and without omitting or abandoning any essential Pre- or Post- Op medical procedure which is likely to affect result of surgery, and without sacrificing quality in the least.

Conclusion

In conclusion it can be said that technique of “VE” as applied to the present study to rationalize the cost of Cataract Surgery in Eye Clinic of T.M.H has yielded fruitful result.

In is further proposed that this useful technique of “VE” (though primarily an industrial tool) could also be tried in the field of Hospital management to cut unnecessary cost and run the service more cost effectively without sacrificing quality of service.

References

  1. Parker, Donald E (1988): Value Engineering theory; Soundaram Publisher, Coimbatore; (pp: 1-2) Iyer, S.S.(1996): Value Engineering; Part I: New Age International (P) Ltd. New Delhi; (pp: 57, 60) Iyer, S.S. (1996): Value Engineering: Part III: New Age International (P) Ltd. New Delhi; (pp: 189-228)
  2. Lomash, S. (1997): Value Management: Sterling Publishers Pvt. Ltd. New Delhi, (pp: 57, 60)
  3. “Value Engineering Guide”: INVEST, East Zonal Council, Jamshedpur.


Dept. of Ophthalmology, Tata Main Hospital, Jamshedpur

For correspondence:
MIG-7, Sangam Vihar Jamshedpur – 931011


Dept. of Ophthalmology, Tata Main Hospital, Jamshedpur For correspondence:
MIG-7, Sangam Vihar Jamshedpur - 931011

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