By Ali Philander and Jacob Kupietzky

Hospitals can improve operating room (OR) efficiency-and contribution margins-in just 12 to 18 weeks using a rapid cycle change approach.

Operating room (OR) efficiency is a measure of how well time and resources are deployed on a daily basis. When operating efficiently, the OR can bring in large profit margins. Some hospitals have seen contribution margins as high as $6,000 per surgeon, per OR hour (Dexter, F., and Ledolter, J., "Managing Risk and Expected Financial Return from Selective Expansion of Operating Room Capacity: Mean-Variance Analysis of a Hospital's Portfolio of Surgeons," Anesthesia & Analgesia, July 2003, pp. 190-195). On the other hand, a poorly run OR can be a huge financial weight on a hospital's bottom line.

Also, both physicians and patients find satisfaction in an OR environment where their cases are predictable and start on time, which ensures that the appropriate amount of time and resources match the expected schedule.

While there are many different ways senior hospital leaders can implement change to improve OR efficiency, we recommend using the "rapid cycle change" approach.

Rapid cycle change requires minimal time investment with a maximum impact and sustainable results. This approach almost always requires a dedicated team or task force to dig deep into problems within an organization and identify solutions to improve efficiency.

Case Example

A 479-bed, for-profit hospital in the Southwest was experiencing poor efficiency and utilization, but did not understand the root causes, financial impact, and how to improve performance. After a thorough assessment was conducted, it was determined that there were significant opportunities to improve the following six areas:

  • First case start times
  • Case cancellation rates
  • Collaboration between preadmission testing (PAT), anesthesia, OR, and postanesthesia care unit staff
  • PAT processes
  • Turnover times
  • Preference card usage

The OR team, along with its external support, used the rapid cycle change approach for more than eight weeks to redesign and improve the six areas by using flow charts, data, posters, and data transparency. There were also intensive workshops for OR and surgical staff members on such topics as leadership training, Lean management, teamwork, service training, and facilitation. Each area initiative had a leader and a physician co-sponsor who were responsible for tracking progress.

In eight weeks, first case delays in the OR went from 23 minutes to nine, case cancellations dropped 16 percent, and utilization increased 33 percent. The hospital achieved $800,000 in cost savings and annualized new revenue of $550,000.

Three Stages for Change

There are three stages in a rapid cycle change engagement: assessment, redesign, and implementation. Each of these stages lasts up to four to six weeks and requires buy-in from senior hospital leadership and OR staff.

Assessment. The first step is assembling a task force that will diagnose problems in OR operations, figure out why these problems exist, and communicate the problems to leadership and the OR staff. It is the responsibility of senior leadership, in collaboration with their physician partners, to structure a task force with mutual representation and responsibility for outcomes. This task force comprises physicians, nurses, and management who have OR experience and can objectively identify problems in OR operations. Secondly, these individuals should inspire the OR staff to change their current operating behaviors.

Once the OR task force is assembled, it should meet with OR staff, physicians, and members of senior leadership to communicate the following:

  • Why change is needed (for example, cost savings, patient and physician satisfaction)
  • Why staff should support the change initiative
  • How staff will have a critical role in shaping the changes
  • Whether rewards will be given for improvements
  • How the changes are in line with the hospital's mission

This first meeting is meant to rally the physicians and staff behind the project and excite them about the pending changes. After this initial meeting, the task force should begin observing OR operations to identify where the inefficiencies are.

See sidebar:Focal Points for OR Assessment 

Redesign. After the task force's assessment findings have been presented, hospital leaders must determine
which improvement opportunities the hospital should pursue. Typically, opportunities should yield a certain amount of financial and quality improvement in a defined period of time to justify the time and resource investment.

The task force then works with hospital staff to redesign processes, eliminate bottlenecks, and improve efficiency of operations. Process redesign should be very organized and detailed. Project management documents should outline what responsibilities belong to each employee, the order of importance of process changes, and a timeline for when the changes will occur.

See sidebar:Key Elements of OR Redesign 

Task force members and clinical directors work together to agree on short- and long-term goals that measure improvements, as well as efficiency metrics that allow performance tracking. For example, a hospital OR may set the goal of improving OR turnaround time to less than 25 minutes by March 2012. The turnaround time metric might be defined as the "mean time from the previous patient out of the OR to the next patient in the OR, including set up and clean up."

Implementation. The implementation portion of the initiative is crucial. The OR task force must educate and retrain staff, as well as help sustain results. Educational sessions should explain how processes and clinical protocols will change and give staff an opportunity to ask questions and voice concerns. New protocols and processes should be made available in written form for staff to keep and review.

It is important to monitor the effectiveness of educational initiatives and compliance with protocols. Some hospitals have the capability to monitor compliance electronically. Hospitals that don't have that capability should monitor compliance through shadowing and audits.

Monitoring changes on a dashboard is imperative. This dashboard would help staff track whether they have met poor, medium, or high performance targets for each goal. For example, here are possible targets for the OR turnover time goal.

Measurements Poor Performance Medium Performance High Performance 
Turnover time (for all cases; mean time from previous patient out of the OR to next patient in the OR, including set up and clean up)>40 minutes25-40 minutes<25 minutes


This information should be shared on a weekly or monthly basis. For turnaround times and delays, it can be very effective to post this information by shift, department, and surgeon on a daily basis. Creating healthy competition can motivate your staff to perform.

When goals are met, reward your team with a pizza lunch or something to acknowledge the team's efforts and success. Daily encouragement and positive reinforcement is a must.

An OR Committee

Once the initiative is underway, it is important to have adequate resources to monitor and sustain the success of the changes made in the OR. The best way to do this is through the creation of an OR committee, under the sponsorship of the hospital's senior leadership team. An OR committee typically comprises administrative and physician staff and is charged with overseeing OR operations. Physicians on the committee should be well respected and well liked, and they should have the ability to steer their peers.

An OR committee has several main functions:

  • Coordinate and streamline preoperative, perioperative, and postoperative care
  • Monitor quality outcomes, patient satisfaction, and efficiency of care on a daily, weekly, and monthly basis
  • Understand current legal and regulatory standards
  • Use evidence-based medicine to make recommendations about clinical practices in the OR

The committee would also monitor OR efficiency on a long-term basis, assuming the day-to-day oversight of the task force is no longer needed.

Key Takeaways

The benefit of rapid cycle is that it accomplishes a lot in a short period of time. Hospitals should implement the essential pieces of this approach-assessment, redesign, and implementation-when attempting to significantly change operations in a department.

We believe that any hospital can engage in a change initiative; the most difficult part is sustaining those changes. Without sustainability, all efforts are for naught.

The following are essential key takeaways to reform OR operations and sustain those changes:

  • Assemble the right team-a team with experience and influence over OR staff.
  • Involve OR staff: Engage and involve staff, physicians, and senior leadership throughout the process, and incorporate their feedback to ensure they feel listened to.
  • Measure success with a dashboard and be transparent about performance-by specialty and staff member.
  • Reward success: Remember and recognize your staff for doing a good job.
  • Invigorate staff by reminding them what their efforts do for the hospital, for patient safety, and for satisfaction.

Ali Philander is a senior analyst, HealthCare Transformation, LLC, Chicago (ali.philander@hctconsulting.net).

Jacob Kupietzky is president, HealthCare Transformation, LLC (jacob.kupietzky@hctconsulting.net).

 


 

Publication Date: Thursday, April 14, 2011