In today's healthcare market, the "good OR" is no longer good enough
The following content is sponsored by Surgical Directions.
"Past performance does not guarantee future results," as every mutual fund investor knows by heart. Unfortunately, in hospitals with traditionally strong surgery departments, executives often forget this warning. Accustomed to solid OR results, they expect strong performance to continue indefinitely. The problem is that in today's rapidly changing environment, successful surgery departments can quickly become struggling ORs.
Recently, leaders of Memorial Hospital in Belleville, Ill., took a careful look at their surgical services division. Memorial's OR is a market-leading organization with great staff and loyal physicians. Still, executives were savvy enough to see that good is no longer good enough. Growing competition, declining payment and increasing quality requirements were slowly eroding Memorial's advantages.
To prepare the OR for the future, Memorial partnered with Surgical Directions, a consulting firm that specializes in OR transformation. Working together, hospital leaders and Surgical Directions team members implemented changes that boosted the OR's strategic and financial performance. To see how they did it, the first step is to understand Memorial's specific challenges.
A history of saying "yes"
Memorial Hospital is a 316-bed community medical center 15 miles southeast of St. Louis. The hospital has long enjoyed many strategic advantages, including a loyal surgeon staff, a good community reputation and, since 2008, Magnet nursing designation. Memorial's 2013 inpatient surgery market share was 40 percent.
But Memorial also faced a list of challenges. Half of all general surgery cases and 55 percent of orthopedic surgery volume in Memorial's primary service area was outmigrating to St. Louis hospitals. Vascular and urology specialties were also seeing cases go "across the river."
Traditionally, OR leaders acquiesced to nearly all surgeon requests for supplies, equipment and other resources. This tradition of saying yes had created strong surgeon satisfaction, but also contributed to some problems:
- Low utilization. Memorial routinely opened 17 or more OR suites. Yet overall utilization was only 46 percent, creating significant gaps in the daily schedule.
- High costs. Low utilization meant Memorial was paying nurses for unproductive time, therefore increasing labor costs. In addition, schedule gaps decreased anesthesiology revenue while increasing the need for support by the hospital through a stipend. The OR also had excessive supply and inventory costs.
- Efficiency gaps. Process bottlenecks and poor communication across perioperative services created numerous inefficiencies. Only 39 percent of cases started on time.
Like all hospitals, Memorial needed to operate within a declining payment system and meet rising quality standards. OR leaders knew that achieving both goals required stronger physician alignment and partnerships.
"When you work in an organization for a long time, you become accustomed to a certain way of looking at processes," said Nancy Weston, chief nursing officer. "We knew we needed fresh thinking and a fresh perspective."
According to Ms. Weston, Memorial's goals included optimizing OR room utilization and staffing models, reducing OR costs, boosting perioperative efficiency and improving overall clinical outcomes. "We also wanted to see financial improvement and development of a strategy for surgical volume growth," she said.
Methodical approach
Hospital leaders vetted several consulting firms before choosing Surgical Directions. The Surgical Directions team evaluated the OR's processes and analyzed operational and financial data. Most importantly, representatives from Surgical Directions spoke extensively with surgeons, anesthesiologists, nurses and hospital executives. The result was a practical plan for transforming the surgery department at Memorial from a good department to a great one.
Physician-led governance. Step one was creating a multidisciplinary Surgical Services Executive Committee to govern the OR. The SSEC is co-chaired by a surgeon and an anesthesiologist; it also includes representatives from all surgical specialties. "The shared governance structure is really different from the old medical staff OR committee," Ms. Weston said. "SSEC leaders work collaboratively with OR nursing leadership and administration to make data-driven decisions and drive operational excellence."
Block schedule reform. The SSEC's first priority was to overhaul the OR's block schedule system. Loose block rules and relaxed enforcement were major causes of low utilization. The SSEC established a utilization threshold of 65 percent and strengthened block time release standards. "Now, the committee is holding their colleagues accountable for not meeting the utilization target," Ms. Weston said. "Going forward, surgeons who are not using their time will lose it."
New scheduling processes. Previously, Memorial did not have a standard process for scheduling surgical cases. "Surgical Directions worked with the SSEC to reengineer that process," Ms. Weston said. "They really refined the movement of information between the surgeon's office and the OR scheduler to make sure we capture complete patient, procedure and financial information." The new scheduling process also incorporates discharge planning and case management.
Pre-op optimization. Before, the OR used only loose guidelines for preoperative preparation. Patients often arrived in pre-op holding with incomplete charts. Surgical Directions helped streamline Admission Testing Center processes and strengthen communication. Team members along with anesthesia developed evidence-based pre-op testing protocols. Anesthesiologists and ATC staff developed protocols for identifying patients with obstructive sleep apnea and managing them postoperatively.
Daily huddle. OR leaders established a short afternoon planning meeting to help ensure next-day efficiency. The "daily huddle" includes representatives from anesthesia, OR management and pre- and post-op nursing. "The huddle team reviews patient risk factors in order to manage care throughout the surgical continuum," Ms. Weston said. "It also determines the optimal sequence of patients, assuring equipment is ready and available for scheduled cases, which minimizes daily cancellations."
Better OR processes. Surgical Directions worked with OR leaders to convert sequential steps to parallel processes through set-up, tear-down and post-op phases. Streamlined workflows helped improve patient throughput and also ensure strong cross-functional communication.
Supply and inventory cost reduction. Several surgeons spearheaded efforts to standardize preference items within their service lines, reducing variation and supply costs. "Surgical Directions also helped us develop a solid Value Analysis committee and negotiate with vendors more effectively to manage the supply expenses," Ms. Weston said.
Safer surgery. Organizational silos preventing the strong communication necessary for optimal safety. A task force guided by Surgical Directions helped OR staff refine their "time-out" process using World Healthcare Organization guidelines. "We also strengthened policies and standards for surgical smoke management, infection control practices and massive transfusion," Ms. Weston said. In addition, the anesthesiology medical director developed a lipid rescue kit, adding an extra layer of anesthesia safety.
Strong outcomes
These and other interventions helped Memorial achieve strong OR improvements in less than 12 months. Block schedule reform and other efficiency gains helped increase overall utilization to 63 percent. The OR is currently on track to reach its goal of 75-percent utilization.
Higher utilization enabled the OR to move from a "horizontal" to a "vertical" schedule. Instead of opening 17 rooms daily, the OR now opens 14 rooms on Monday, 15 rooms Tuesday through Thursday, and 10 rooms on Friday. This has allowed Memorial to right-size the nursing staff, translating directly into lower labor costs.
Nationwide, annual OR nursing costs are $250,000 to $300,000 per room. Memorial reduced staffed rooms by 19 percent overall, representing an annual labor cost savings of approximately $800,000 to $950,000. Higher utilization also enabled the anesthesia department to provide full coverage with a leaner staffing model.
OR supply chain initiatives helped reduce direct costs. Physician-led work on preference items cut variation in preference card costs. In addition, contract renegotiations with Memorial's orthopedic implant vendor led to significant cuts in joint replacement surgery costs.
Strengthening the ATC and adopting a daily huddle helped ensure more patients are prepared for their procedure on the day of surgery. As a result, the on-time start rate increased to 70 percent. Physicians appreciate the OR's more cohesive and standardized approach to preparing patients for surgery. In addition, improvements in OR communication and safety practices are helping Memorial ensure optimal quality and patient outcomes.
Memorial's OR transformation has positioned the hospital to target fresh strategic growth. Several initiatives are in place to increase orthopedic surgery referrals from primary care physicians. In addition, the SSEC is displaying strong commitment to the strategic success of the OR. Physician leadership is proving instrumental in the development of a Joint Replacement Center of Excellence.
Trust and transparency
Surgical Directions is led by active physicians. According to Ms. Weston, that was a key factor in Memorial's successful transformation. "Dr. David Young from Surgical Directions is a practicing anesthesiologist, so he was able to develop a high level of trust and respect with our anesthesiologists and surgeons," she said. "He understands the workflow of the OR, and that spoke very loudly to our physicians."
Ms. Weston appreciates Surgical Directions' collaborative approach. "They worked side by side with us, and they sought our feedback. It wasn't just one-way communication."
Chief nursing officers play a critical role in OR transformation. "As the CNO, I provided coaching and direction to project leaders on how to navigate organizational barriers," Ms. Weston said. "My role was also to monitor the progress of initiatives, make sure they stayed on track and re-direct them as needed."
The key to dramatic OR improvement is full transparency, Ms. Weston said. "Unless your OR's weakness and opportunities are identified, there is no opportunity to truly transform operations."
Patricia May, BSN, RN, CNOR, is senior nurse executive, Barbara McClenathan, RN, BSN, MBA-HCM, CNOR, is senior nurse executive, and Dhir Desai is analyst at Surgical Directions, a perioperative consulting firm that helps hospital ORs improve efficiency, financial performance, clinical outcomes, and patient and staff satisfaction. They can be reached at (312) 870-5600.