5 Steps to Transforming the Post-Reform Hospital OR

The concept of 'accountable care' has been all the rage since healthcare reform passed and tied it to hospital compensation and quality outcomes. As a result, hospitals throughout the country are seeking a roadmap to transform their number one expense — the operating room — by focusing on accountable care, the patient experience and how quality, outcomes and costs are driving hospital performance.  

There are five steps hospitals can take to build a solid perioperative foundation to address the unprecedented challenges facing the OR today. Following this roadmap can deliver improved OR utilization, more on-time starts, expanded services, lower staff and supply costs, reduced subsidies, lower lengths of stay, higher patient and surgeon satisfaction and better outcomes.

Building the accountable care perioperative super structure

Before a hospital can begin to implement the five steps, it needs to forge a foundation that includes an end-to-end perioperative super structure at every patient touch point, from the time the surgeon and patient decide on surgery to the pre-OP visit, to the surgery itself through discharge and everything in between. With so much change in the wake of healthcare reform, hospitals need to be open to a new surgical paradigm that, when properly executed, will lead to a fully aligned accountable care perioperative OR.

A key to success is to view surgery as one continuum of perioperative care, with one physician leader to oversee the process and be accountable for the entire patient experience. Since the hospital-based anesthesia group touches every area involved in surgery, from primary care physicians, surgeons and hospital administration to cardiology, radiology, gastroenterology, hematology and more, it makes sense for an anesthesiologist from the hospital team to lead and monitor the entire perioperative process.

Once this foundation is locked into place, hospitals will be ready to take the following five steps to transform the OR by connecting quality, outcomes, the patient experience and cost as a new way of thinking about OR management.

Step 1: Efficiency and effectiveness

• Step one modernizes OR operations for maximum efficiency and effectiveness, deploying the best expertise, resources and supplies as needed, and customized for each patient.  
• It starts with the perioperative physician leader, who is accountable to the hospital for the full pre-surgical, surgical and post-surgical cycle, cutting across the silos that are endemic in most hospitals.
• The perioperative scope includes pre-surgical testing to ensure clinical and medication reconciliation, protocol-driven testing, patient admission/discharge planning, full compliance across the spectrum, standardizing supplies to reduce costs and implementation of best practices.

Step 2: Quality improvement

• Step two creates a comprehensive system and culture of ongoing quality improvement that drives better outcomes and more reliable reimbursements and financial performance for hospitals.
• Think of it as an evolution from a traditional fee-for-service world view — provider comes to hospital, performs a service, gets paid, goes home — to the constant pursuit of clinical, administrative and financial improvement. It's driven by real-time hospital-wide data collection, robust analytics and benchmarking against industry peers.
• Part of taking the broader perioperative view is understanding what is behind performance metrics — why was there a longer stay in the recovery room, what were the drivers behind an unusual level of nausea, why were all providers ready for an on-time surgery start but the OR was still late?  
• The key is asking tough questions across the perioperative spectrum, and then building best practice answers into the workflow at every touch point.

Step 3: Public reporting

• Step three addresses public reporting and how a multitude of reporting entities have turned patients into empowered consumers, directly impacting hospital compensation.  
• Hospitals can now be docked up to 1 percent of their inpatient reimbursement, funding the pool of nearly $1 billion. By 2017, the projected withhold or losses will reach $2.0 billion in cumulative penalties. These monies will be withheld for failure to achieve benchmarks of Surgical Care Improvement Project scores as well as patient satisfaction. Therefore, it is essential to have a method for increasing hospital rankings and driving patient choice.  
• From scores for the Inpatient Quality Reporting Program and SCIP to NCQA and ratings from insurers, hospitals are grappling with substantial reporting requirements and systemic challenges. When CMS began the IQRP in 2004, there were 10 measures; today there are 72, and hospitals must report these measures to receive their full annual payment increase. So it has never been more critical for hospitals to have the structures and processes in place for constant quality improvement, data capture and analytics.
• Hospitals need to create a comprehensive list of key quality measurements, developing a perioperative map pointing to how those measures touch the surgical workflow and implementing the best ways to manage each touch point. For example, a small change that can pay positive dividends to hospitals is administering the right antibiotic pre-surgery. This is a SCIP measure traditionally tasked to the surgeon. So introducing a safety double-check in the OR and allowing anesthesia to take responsibility according to protocol, helps mitigate issues that could negatively impact a SCIP score.  

Step 4: Value-Based Purchasing and Readmission Reduction Program

• Step four aligns the goals of the hospital around quality metrics, impacting how a hospital is paid.
• Driving that goal is a critical component of healthcare reform, which links hospital payment to quality outcomes — and which led to the creation of Medicare's Value-Based Purchasing and Readmission Reduction programs. Every hospital needs a cogent game plan on both fronts.  
• The VBP program provides payment incentives based on quality score increases above a hospital’s baseline score and the national median score across 12 clinical measures (70 percent of the score) and eight experience-of-care measures (30 percent of the score), all of which are also a sub-component of the overall SCIP scores. The motivation behind the Readmission Reduction Program was the readmission of one-fifth of Medicare patients within 30 days of release, at a cost of $17 billion annually. It is estimated that 17 percent of those readmits were potentially preventable. Consequently, hospitals stand to incur penalties for certain readmissions.  
• In order to have maximum influence over reimbursement levels, hospitals need to track SCIP scores across the perioperative spectrum and compare them to the VBP thresholds and statewide peers using The Joint Commission database. Then, on an ongoing basis, that data needs to be used by the perioperative team to: (a) identify weak links in the perioperative process; (b) develop specific and actionable solutions for each problem; and (c) continue to build an experience-based playbook of best practices that are applicable across the perioperative spectrum.  

Step 5: ACO costs and quality outcomes

• Step five aligns goals to manage costs and outcomes for a defined population in the post-reform world of accountable care organizations.  
• An outgrowth of healthcare reform, ACOs have actually been around for many years in various forms. Today, ACOs seek to redistribute hospital priorities and investment from a traditional fee-for-service mindset into prevention, evidence-based medicine and outcomes.
• To manage to a global budget and reduce the cost of its assigned member population, an ACO needs a robust infrastructure for care management; quality tracking and reporting; provider selection and contracting; evidence-based policies and pathways; data exchange; actuarial, revenue, and margin analytics; cost and utilization analytics; and a beneficiary database.
• When it comes to the perioperative arena, hospitals pursuing an ACO strategy need to integrate the ongoing solutions mentioned throughout the first four steps into an ACO that consistently impacts surgical complications, mortality, readmissions, length of stay, hospital acquired conditions, inpatient quality indicators and patient safety indicators. The key is to consider ACOs a central component of the hospital's perioperative landscape, instead of a pilot program that is built in a non-integrated silo.  

As hospitals throughout the country take a broader view of their mission through the prism of accountable care in the age of healthcare reform, many are seeking creative ways to address major cost centers and quality drivers, particularly since they are increasingly interrelated. Building a broad-based perioperative super structure that addresses the number one expense — the OR — will help hospitals realize better clinical outcomes and ways to capture and report them, increase revenue while decreasing costs and provide clear accountability for care. That's the end-game in the post-reform world of healthcare today.

Michael Simon, MD, is a practicing anesthesiologist and regional director for North American Partners in Anesthesia where he builds and leads perioperative super structures for hospitals throughout the country.