By Ali Philander and Jacob Kupietzky
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.
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:
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.
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:
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.
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.
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:
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.
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:
Ali Philander is a senior analyst, HealthCare Transformation, LLC, Chicago (firstname.lastname@example.org).
Jacob Kupietzky is president, HealthCare Transformation, LLC (email@example.com).
American Express: Streamlining Supplier Payments and Boosting Revenue
Deloitte: Realizing the Potential of Your CDI Program
Suzanne Whitworth, director at Deloitte & Touche LLP, and LaVerne Romberger, MSN, CCM, CCDS, clinical operations manager-Seton Healthcare, share leading practices for maximizing the potential of clinical documentation programs under value-based care.
RevSpring: Customizing a Technology Platform to Drive Patient Payment
Martin Callahan, Senior Vice President, Healthcare Solutions, RevSpring, describes key industry trends affecting how patients engage with the revenue cycle and ways payment processes are changing as a result.
KPMG: Readying for Healthcare Today and Tomorrow
Dion Sheidy, a partner in KPMG's Healthcare Advisory practice, discusses healthcare's changing landscape and how having the right advisor can help organizations navigate challenges and opportunities.
Huron Healthcare: Readying Your Organization for Transformation
Gordon Mountford, executive vice president, Huron Healthcare, discusses business imperatives for undertaking transformative change.
Xtend Healthcare: A Custom Approach to Optimizing Revenue Cycle Performance
Tom O'Neill, CEO of Xtend Healthcare Advanced Revenue Solutions, discusses key areas where organizations risk revenue leakage and ways they can use outsourcing to better protect cash flow and support accurate payment.
KeyBank: Helping You to Realize Your Strategic Vision in Changing Times
Victoria Terekhova, senior strategist for Enterprise Healthcare at KeyBank, discusses key challenges when developing long-term strategy in a rapidly changing industry, and the role the right banking partner can play in helping healthcare providers navigate the opportunities before them.
SSI: Preparing the Revenue Cycle for Changing Payer Roles
Availity: Connect to the Future of Healthcare Information
Deloitte: Leveraging IT for Value-Based Care Transformation