Innovations: Surgical Smoothing
The biggest impediments to safety, efficiency, profitability, and patient satisfaction within US hospitals are near constant “peaks” and “valleys” in inpatient census, according to Eugene Litvak, PhD, president and CEO of The Institute for Healthcare Optimization (IHO) in Newton, Massachusetts. These vacillations so commonplace they’ve brought the average bed occupancy rate among U.S. hospitals to 65% — the lowest among industrialized nations.
During peaks (or maximum occupancy), nurses and physicians are stressed and prone to error, patients receive less individual attention, hospital expenditures increase because of overtime pay, emergency departments back up, and ambulances are consequently diverted to other facilities. During valleys (periods of low occupancy), hospital resources are being wasted, and each empty bed represents lost revenue.
The good news says Litvak, is that these pendulumatic swings in occupancy rates can be avoided using smoothing; an approach to controlling admissions developed by Litvak and his colleagues nearly a decade ago after their research led them to “an interesting and absolutely unanticipated discovery.”
“In 2000, we started studying a couple of hospitals, and we found that elective surgeries are more variable — less predictable — than emergency department admissions,” Litvak recalls. “If you go to the ED at any medical center and ask the manager how many patients will be in the ED four weeks from Friday, he or she would be able to give you an approximate number, [barring] a disaster. If you go to the same hospital’s operating room and ask how many surgeries there will be four weeks from Friday, you will not get a reliable answer. That shows that Mother Nature is more predictable than the scheduling systems of most hospitals.”
How Smoothing Works
More than 50% of hospital admissions come through the ED, and ED traffic on any given day of the week can be predicted statistically. Litvak and his colleagues realized the key to eliminating occupancy peaks and valleys lies in controlling admissions from the other patients competing for those beds: those scheduled for elective surgeries.
The process consists of three phases: (1) separating the streams of scheduled and unscheduled surgeries into separate, dedicated operating rooms; (2) smoothing elective inpatient surgeries to roughly the same number for every preferred placement unit each day; and (3) calculating the number of needed in-patient beds.
“Smoothing means that the hospital would perform, say, 52 elective surgeries on Monday, 53 on Tuesday, 49 on Wednesday, etcetera,” says Litvak. “It would vary slightly, but it would not be 20 one day and 70 another, which is how things currently work.”
During peaks, patients are turned away and the hospital cannot reclaim the patients it has sent away. On-call nurses are brought in, but when a valley inevitably follows, the patient load is too small for the abundance of nurses. Keeping the daily number of scheduled elective inpatient surgeries relatively constant ensures there will be available beds for ED admissions and greater predictability in staffing requirements, two things that will help hospitals save money, generate more revenue, keep nurse-to-patient ratios at optimal levels, and increase caregiver satisfaction.
Case study: Cincinnati Children’s Hospital Medical Center
Cincinnati Children’s Hospital Medical Center is the only US hospital that has fully implemented smoothing (other hospitals, including Boston Medical Center, have implemented certain elements). Jim Anderson, who retired as Cincinnati Children’s president and CEO in late 2009, said that with IHO’s help, the Cincinnati Children’s Hospital adopted smoothing after struggling to serve a growing number of patients from an increasingly broad geographic area. Anderson discusses this experience in an interview with Madge Kaplan, host of the Institute for Healthcare Improvement’s free audio talk show WIHI (audio file).
Without the money to add additional beds — each of which costs roughly $1 million in capitol costs and over a quarter of a million dollars in annual operating costs — Cincinnati Children’s needed to make better use of the ones it already had. “We needed better utilization out of our resources — physical, intellectual, technological — to produce a more consistent, reliable, safer, efficient and effective experience for the patient, delivering a better outcome at a better value,” Anderson told WIHI.
The results have been remarkable. According to Anderson, between 2004 and 2009 there was a 28% reduction in weekday wait times for unscheduled surgeries despite a 24% increase in case volume. Meanwhile, weekend wait times dropped 34% despite a 37% increase in case volume. Overtime hours decreased by 57% between fall of 2006 and the first part of 2007, saving the hospital $550,000 annually, and the growth of its operating room caseload has remained at 7% over the past two years without adding operating rooms. Finally, inpatient occupancy has increased from 76% to 91%, resulting in a $100M capital cost avoidance and an opportunity to increase annual patient revenue by over $100M.
Scott Hamlin, Cincinnati Children’s chief financial officer, told WIHI that the hospital competes with many others that are “geographically more convenient” for patients and as such “must distinguish our product, not just on safety and outcomes, but by patient experience. Part of our draw has to be that we take you when you’re ready for us, not vice versa.”
Hamlin noted that in 2004, before the adoption of smoothing, Cincinnati Children’s routinely experienced “operational failures” that caused it to decline referrals or cancel surgeries despite vacancies among its beds.
“You grow up with the idea that you can focus on the patients’ needs or you can focus on the physicians that bring the patients to you and their needs, and you fall into the trap of believing those are mutually exclusive things,” Hamlin said, adding that he worried forcing surgeons to spread out their cases would diminish their job satisfaction. “It didn’t take very long to figure out that flow is one of those magical things where doing the right thing operationally is the right thing for the families, the surgeons, and the profitability of the operation.”
Eugene Litvak PhD, President and CEO, Institute for Healthcare Optimization, Adjunct Professor of Operations Management, Department of Health Policy and Management, Harvard University
The Institute for Healthcare Optimization