Wednesday, March 19, 2014

Focus and Leverage Part 324

In this posting I want to shift gears a bit and talk about some real problems facing healthcare today.  This posting is based upon conversations I’ve had with Vicki Harrison of Optimium Health, Inc.  As you will see, Vicki’s company has some great solutions for problems that have plagued hospital perioperative services for some time.  I know of these problems because I have been confronted with them on my own healthcare consulting engagements.  Specifically these problems are centered on work flow into and out of surgical units.  I only wish that I had met Vicki sooner!

The facts are in:

  • FACT 1:   42% of hospital revenue is generated by the operating rooms
  • FACT 2:  Only 68% of OR’s run at capacity
  • FACT 3:  By increasing throughput by 1 additional procedure per day per OR suite, an average size hospital can generate $4-7M in additional revenue [1] 

A Baltimore Health System and Optimium Health, Inc. partnered to optimize workflow and efficiency for the purpose of providing more efficient patient care and improving the financial health of the hospital while increasing patient and nursing satisfaction. The initial implementation is at the systems 467 bed hospital which performs over 20,000 surgical procedures per year.  The health system and OHI realized that to date, no one has approached process improvement in healthcare by combining Lean methodology with specific workflow automation tools for the explicit purpose of more efficient care delivery. With mandates being required by CMS and other government organizations, to reduce costs, while delivering a high quality of care, better care coordination and increased transparency, process improvement has to have a greater impact. As the OR accounts for a large share of an organization’s expenses and resource demands, improving the effectiveness of perioperative services goes a long way to increasing the financial health in healthcare organizations.

Optimium Health has developed amazing new software that more or less synchronizes all of the required activities needed to prepare a patient for surgery.  They call their product OPTIMI$ER and based upon results seen during Phase I it is worth every dollar spent.

Phase I Results Summary: $1,088,000 Net of Increased Revenue and Expense Reduction for Pre Anesthesia Screening Services: Note – Results below reflect only patient clearance process not a full perioperative setting implementation.

  • $408K = OPTIMI$ER’s direct impact on improved RN productivity allowing for increase in patient volume with no increase in staff
  • $780K = Anticipated in reduced DOS cancellation by 1 case per day
  • 78% = Increased staff satisfaction
  • Return on Investment = 2 months

Let me stop for a second and ask you some workflow questions about your own hospital:

  • Does your hospital or practice lose revenue due to surgical delays or cancellations?
  • Do scheduling glitches leave your operating rooms idle too often and too long?
  • Do your clinicians spend more time doing clerical tasks than they would like?
  • Is interoperability between your IT systems limited or non-existent?
  • Do problems arise because manual information exchanges between departments and caregivers are error prone, untimely, and difficult to read?

If you answered yes to any or all of these questions, then Optimium Health’s new software can help. It should be understood that Optimium Health supports operational excellence in provider healthcare organizations and they have proven solutions that: 1) streamline and synchronize clinical workflow, 2) significantly improve financial results, and 3) enhance the patient experience and 4) improve the morale and effectiveness of healthcare employees.  I know I was impressed with the results I have seen, especially in Phase II of their implementation.

In Phase II, the scope was redefined to include

  • DOS (Reduction in delayed first case starts and cancellations)
  • Real-time analytics dashboard reports (cancellations-reason, delays-reason, first case start offenders, huddle, PACU boarder)
  • Follow up calls (readmission prevention)

The financial opportunity in Phase II was an additional $3-7 M in revenue and/or cost avoidance.  But before I get into Phase II, let me give you a bit of background information that most healthcare providers will relate to.

Optimium’s partner hospital is located in Baltimore, Maryland and is a part of a health system.  It provides a broad array of high-quality, cost-effective health and health-related services. The hospital has 467 acute beds, is a level II trauma center, and performs over 20,000 surgeries per year. Central to its role is the provision of undergraduate and graduate medical education; approximately 400 medical students receive clinical training each year. It also provides educational programs to other health professionals, employees and the community at large.  The hospital is a non-profit institution with a mission of providing quality patient care, teaching and research and is a Magnet designated facility.

Project Description:

Goal 1: To increase effectiveness, efficiency and utilization of nursing staff in the Pre Anesthesia Screening Services (PASS) Department with the overall objective to increase patient volumes with existing staff while providing quality care.

Goal 2: To effectively apply workflow automation technology that would optimize staff performance and increase existing technology interoperability, while increasing patient and staff satisfaction.

Department Overview:

PASS is responsible for performing pre-surgical testing on approximately 50% of the 20,400 surgical patients per year and clearing 100% of them for surgery. The department is staffed by 6-8 RN’s and 2-3 NP’s per day.  Four RN’s spend approximately 40% of their time on the clearance process which is time away from seeing patients.  This has been a constant complaint that I have experienced on my healthcare engagements involving surgical units.

The Issues:
  1. Although the hospital had a very robust IT infrastructure and utilized an enterprise IT vendor for surgical scheduling, nursing and clinical documentation, there was no interoperability (i.e. synchronization) between the three modules. RN’s clearing patients for surgery were required to access and input patient information in to three separate locations.  Sound familiar?T
  2. The surgical schedule was not updated in real-time so many times an RN would work on clearing a patient for surgery who had already been moved or cancelled. Sound familiar again?
  3. The staff were in 3 different locations and charts would be carried from one location to another if another staff member needed the chart.  As Yogi Berra said….deja vu all over again.

Current State:

Using Lean methodology, Optimium Health held meetings with the peri-operative management team and subsequently, PASS staff to define current state and map out workflows as well as what would be future “best practice”.

  • The hospital’s current state day of surgery cancellation rate is 9% which is above the national average of 5%.  This is due in large part to preventable “waste” in current state workflow process:
  • An increasing number of 24-hour “Add-Ons”, many of which are missing patient chart information.
  • An information exchange breakdown between physician offices and PASS, leading to missing or incorrect patient chart information being sent to PASS.
  • A lack of existing technology interoperability which creates “waste” in the form of time lost to duplications, omissions, and errors when transcribing information from one system to another.
Additionally, the hospital’s current state process uses valuable clinical resources in clerical functions in a manner that improves success but limits throughput:
  • 42% of an RN’s Time is Spent Doing Clerical Tasks
  • 20% schedule reconciliation
  • 22% chart reconciliation
In terms of scale, the hospital schedules an average of 100 surgeries per day, 260 days per year. With a 9% day of surgery cancellation rate, this means approximately 2,340 surgeries are cancelled each year resulting in up to $7 million in lost or deferred revenue (based on a conservative per surgical case revenue average of $3000). Even if the case is postponed, it negatively impacts operating room utilization for that day and is, therefore, a lost opportunity cost.  In other words, it’s another potential revenue gain.

Key Beneficiaries:

So assuming this effort is successful, there are multiple beneficiaries. 

PASS - PASS provides clinical services prior to a surgical procedure. PASS RNs’ clinical responsibilities include: General patient work-up, Lab draws, EKGs and entering patient data into the enterprise EHR, with additional support functions (phone calls, faxes, etc.). These same services can be provided by outside physician practices instead of PASS. The patient’s surgeon may have referred the surgical patient to an independent office rather than PASS to continue the flow of surgical referrals from that office. This passing off of patients between physician practices (primary care physicians and surgeons) creates a number of problems for the hospital that would be far greater if not for the PASS staff who act as a stop gap measure to prevent OR case cancellations or delays.  Thus, the constituent groups who will benefit from the implementation of this  PASS workflow solution includes:

  • Patients – improved quality of care due to more timely and accurate information exchange between caregivers. Shorter wait times for surgical procedures.
  • PASS Staff – Higher job satisfaction due to 1) more time devoted to clinical vs. clerical tasks and 2) less stress related to defective information exchanges.
  • Surgeons & Surgical Staff – increased on-time surgical case starts due to the reduction of errors, omissions, and duplication that can cause case delays and cancellations and increased PASS staff satisfaction.
  • Hospitals – 1) Reduction of surgical case delays, often resulting in overtime charges, and a reduction of case cancellations, considered lost revenue and 2) better PASS staff resource utilization due to the reduction of preventable “waste” in an inefficient process.

So the question becomes, how is Optimium Health (OH) doing thus far in Phase I?  Take a look at these preliminary results:

Financial Benefits:

Year I = $1,088,000 Net Revenue After Expenses

Increased Day of Surgery Throughput: OH is on-track to add one surgical case per day with a very conservative reimbursement rate of $3K yields additional revenue of $780K/year.

Lower Costs – Better RN Utilization: Overall improvement of full-time employee productivity equates to 1.35 FTE’s. The hospital opted to redirect 1 FTE to a fee for service area within PASS to open a new book of patients. The remaining 0.35 FTE has been redirected to help for 2 hours in pre-op on the day of surgery with the aim to improve on-time starts and to reduce cancellations.

Increased Revenue – New Book of PASS Patients:  An additional book of 14 PASS patients per day was opened, 5 of which are fee paying, which equates to net revenue of $292K/year.

Reduced Supply Costs: $8K saved in paper, FAX ink, toner, and maintenance due to automating faxes sent.

Return on Investment (ROI):
  • 1.5 months Year I
  • 1 month Year II and beyond
Staff Satisfaction: 

+78% Improved PASS RN and Manager Satisfaction

All-in-all, using very conservative estimates, these are very impressive results. Phase II will be underway shortly.  I suspect that when Phase II is fully ingrained in the hospital, the cost for OPTIMI$ER will have been recovered many times over.

If you are a regular follower of my blog, you know that I have very seldom ever endorsed a product.  But having been involved with the same and similar healthcare organizations, I feel I would be remiss if I didn’t report on this product.  If you’re interested in hearing more about this revolutionary product that truly synchronizes work flow, you can contact Vicki Harrison at her contact info below.  I encourage you to visit their website as well at the following link:
1  HFMA-“Achieving Operating Room Efficiency Through Process Integration”

Vicki Harrison: 
439 Ferry Point Road;  Annapolis, MD;  21403

Office:    410.295.1298
Mobile:   443.994.0189

I want to thank Vicki for her excellent work in helping healthcare organizations improve their throughput of surgical patients.
Bob Sproull

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