1

Strategies for Cost Control & Collaboration

1

Supplies

Discharge Status

Outcomes

Case Time

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• Co-management

• Collaboration

• Governance Model

• Benchmark Report

• Case Time

• Predictive Analytics

Agenda

3

Strategies for Net Cost Reduction

3

Aligned incentivesEffective

governance and leadership

Reduce unnecessary interventions that

don’t benefit patients

Efficient scheduling of staff and cases

Reduce case cancellations and

delaysReduce OR time

Reduce length of stay

“enhanced recovery”

Reduce complications,

readmissions, post-acute facility care

4

Co-Management Agreements

4

Several health systems have found co-management an effective way to engage surgeons and anesthesiologists in service-line specific or OR wide initiatives: Specific metrics can be crafted to target critical service line goals

Co-management allows for FMV incentives to be earned by physicians for their efforts: - -Fixed duty compensation available for hourly time spent in committees (From 0-50%) - -Performance metric compensation for demonstration of improvement from baseline for defined metrics (0-50%)

Co-management is a flexible alignment structure that can change over time and expand to include other programs:Metrics can be changed annually so physician effort is always maximizedPrograms such as bundles payments can be integrated into co-management programs

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Overview of Co-Management Structure: A Model of Clinical Co-Management

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6

Hospital Quality Efficiency Program

6

Agree on Metrics –FMV by 3rd Party

(Horne LLP vs. Fair-Market Appraisers)

Goals are tiered and weighted – min.,

mod., stretch goals

Align with other service line HQEP’s

– one bucket per service line

Future is Value-Based Payment –

EBP (CJR, CABG), MACRA

*Most Important* -CAN NOT GET

PAID FOR WORK ALREADY DONE

Guideline: FMV is usually 1-3% of

revenue of service line

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Bundled Payment Requires Collaborative Governance

7

StrengthentheperioperativegoverningbodytoalignincentivesforallaspectsofPerioperativeServices

Surgical Services Leadership Committee (SSEC)

Surgical Leadership

OR Nursing Leadership

AnesthesiaLeadership

Sr. HospitalLeadership

• Chaired by Medical Director(s) of Perioperative Services• Administration-sponsored Surgery Board of Directors• Controls access and operations of OR• Sponsors and directs Perioperative team activity

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Steering Committee Responsibilities

8

Define supplies accepted per case

Identify key surgeon to approve

exceptions prior to surgery

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Supply Costs Can Be Controlled

9

Cost Issues

Aquamantys Cautery Device

Implant Not on List

Supplies utilized with

no value

10

Questions to Ask

10

What are the benchmarks?

How do you address physicians who are outside benchmarks?

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Physicians Scorecard

11

This image cannot currently be displayed.

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How to Address Outlying Behavior

12

Gain Sharing Payment

Block Time

Flip Rooms

Dedicated Team

Physician Leadership is KEY

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OR Case Time is Very Expensive

13

ASC

$20 Minute

Community Hospital

$40-$60

Minute Tertiary Hospital

$60-$80

Minute

The Elephant in the OR: Case Time

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Case Time Date: Driving Organizational Change

15

Patient In

Anesthesia Ready

CutClose

Patient Out

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Reduce Case Time

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InformationTurnover Teams

Reduction of items or preference

cards

PA and tech set-up for complex

procedures

Anesthesia preference

cards

Surgeon in room when patient is in

room

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OR Case Time Variance By Procedure

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18

Impact

18

CV Surgery:50 Per case reduction in 6 months

Urology:Robotic

Prostatectomy 45

minutes

Cost Per Minute:

$20

IMPACT:Reduced cost per case and increased revenue

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Case Study – East Coast Community Hospital

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20

Predictive Analytics in Perioperative Services

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Predictive Analytics improves

outcomes while optimizing

costs

Block Time &

Scheduling

Labor & Productivity

Anesthesia Costs

Nursing Costs

Clinical Outcomes

21

Why is Efficient Block Scheduling Important?

21

Establishes “draw down” and optimizes room utilization• 2.5 FTE/Room• Approximately $300,000

Anesthesia cost

Reduces costs from having under-utilized rooms

Reduces the cost per occupied bed

Figure 1. Heatmapping the operating room aids in visualizing peak operating hours and helps to minimize non-productive time.

Client logo placeholderEffective Block Design

The goal is to maximize access for the most productive surgeons

Block forecasting correlates physician practice patterns to precisely match demand for block

Predictive models also allocate appropriate time for urgent, emergent, and electively scheduled cases

- Drastically reduces overtime expense and improves throughput- Minimizes need for additional resources after hours

Hospitals use this schedule to forecast ICU admissions and efficiently manage beds

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Designing a Block Schedule by Forecasting Demand

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Helps to load balance the OR• Reduces variance and improves predictability of the daily

schedule

Improves surgeon access

Incorporates physician practice patterns into the model• Minimizes interference with clinic schedule

Reduces overtime cost• Provides “wiggle room”

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Scheduling Accuracy is a Critical Component of an Efficient Block Schedule

Helps control labor costs- Reduces day-to-day variability in the schedule- Provides sufficient notice of gaps or complex cases

Client logo placeholderScheduling Accuracy, cont.

Case Time 𝑇" is non-Gaussian- Log-normally distributed

Several effective approaches- How to best handle outliers?

• Use the expectation value: 𝐸 𝑇" (with some guidelines)

N(ln 𝑇"; 𝜇, 𝜎) =1

𝜎 2𝜋� 𝑒456 7849 :

;<:

Case Study - What is the Daily Huddle?

H HealthcareU UnitedD Daily (to make)D DecisionsL Leading toE Excellence

Recap of previous dayTotal case review for next days out –

PAT and scheduling completionReview of scheduleTotal number of anesthesia providers

to start the dayPAT problem reviewAntibiotics reviewReview pending action items

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Unused Time = 4 hours

Unused Time = 3 hours

4th Case = 1.5 hours

Turnover = 1 hour

Turnover = 1 hour

2nd Case = 1.5 hours

Turnover = 1 hour

1st Case = 1.5 hours

3rd Case = 1.5 hours

FlipRoom• Avg.Duration

1.5hours• Avg.Turnover

-15minutes

CalculatingUtilization

Withanegativeturnover:

=1.25x4=5/8‘unadjusted’ forflip=62%

Adding30minadjustedturnoverbetweeneachcase:

=1.5x4+.5x3=7.5/8.0IstheAdj.Util.=94%

Room 1 Room 2

1.25 1.25 1.25 1.25

1.50 .5 1.50 .5 1.50 .5 1.50

Utilized

Utilized

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Case Study - Solution for Room Flipping & Calculation for Adjusted Utilization

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Case Study - Impact

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Surgeons Engaged• Increased OR Volume• Increased Satisfaction

Anesthesia Engaged• Improved Efficiency

Strong Leadership• Nursing Director and Co-medical directors own daily

operations

Profitability• Hospital well-positioned and functioning efficiently• $20M Improvement

Client logo placeholderCase Study – Volume Snapshot 2015 & 2016

898 928 919 9101142 1012 1065 1038

27%

9%

16%14%

0%

5%

10%

15%

20%

25%

30%

0

200

400

600

800

1000

1200

June July August September

YT

D V

olum

e C

hang

e

Volu

me

2015 2016 Delta

Client logo placeholderCase Study – OR Utilization Snapshot 2015 & 2016

60% 61%65% 63%

75%70% 69%

73%

0%

10%

20%

30%

40%

50%

60%

70%

80%

June July August September

Adj

. Util

izat

ion

(Pri

me

Tim

e)

2015 2016

Implementation Checklist

32

Work Plan

32

Steering Committee

• Physician Leadership

• Surgeons• Anesthesia• Quality• Business

Manager• Nursing• Administration

Payment for Physician Time

• Determine best model for your hospital

Gain Sharing

• Determine what works best for your hospital

Meeting Frequency

• What is necessary?

• What fits everyone’s schedule?

Work Group

• Clinical Redesign

• Information

33

Information Collection

33

Quality(SSI, DVT,

Retain Objects)

HCAP

Cost

Surgical Time

Readmission

Mortality

Discharge Status

34

Physician Scorecards

34

What to Include?

How to Display?

Assign Responsibility

35

Clinical Redesign

35

Value Stream

Mapping

Patient Scheduling

Presurgical Optimization

AnesthesiaPain Management

Equipment / Room Set-Up

36

Protocol / Clinical Pathway

36

Exclusion Criteria• BMI• Smoker• Comorbidity

ERAS Surgery• Time• Vitals

P.A.C.U.• Mobility• Ambulation• Discharge

Criteria• Pain

Management• PONV

Post Surgery Recovery• Dietary

Expectation• Hourly Clinical

Expectation• Pain

Management• Ambulation• Discharge

Expectation• Post Discharge

Daily Monitoring

37

Patient Education

37

Patient

Introduce Technology

Prepare for Surgery

(NPO,Sage Wipes)

Rehabilitation / Recovery

ExpectationsPost Surgery

Follow-Up

Who to Contact with Problems?

38

Office Staff Education

38

Bundled Goals

Clinical Checklist

39

Risk Reduction Tools

39

Home Support Comorbidity

Smoking Cessation

Home Evaluation

40

Cost

40

Incomplete Surgical Tray Preference Cards

Surgeon Deviates From Approved Set

Implants Not On Registry

41

Implementation Checklist

41

Steering Committee Information Physician

Score Cards

Clinical Redesign

Patient Education

Surgeon Office Staff

Patient Education

42

Institution Support Is Key

42

Project Champion

Anesthesia / Surgeon

Information

FinancialNavigation

Nursing Leadership

Time / Resources

Hospital Support

Surgical Directions541 N. Fairbanks Court

Suite 2740Chicago, IL 60611

T 312.870.5600 F 312.870.5601

www.SurgicalDirections.com