At the Margins

Need to improve margins? Try looking at your OR.

By Michele Molden, MBA and Michele Mayes

Last year, the leader of an academic medical center approached us at an event. With steep, state-wide budget cuts on the way, they needed to quickly improve profitability. After a few discussions, one area emerged as an untapped opportunity for the hospital to quickly realize returns: surgical services.

A snapshot of current operations

This particular center had both an OR and a large outpatient center where many of its elective procedures were sent. The arrangement was perfect for ensuring less invasive procedures didn’t congest the OR, but a lack of coordination between the two entities caused more harm than good.

For example, the surgery outpatient center was responsible for coordinating the OR’s pre-admissions testing (PAT), including preparing charts, calling patients, and conducting pre-screens. Instead of completing these tasks 72 hours before a given procedure, they were done less than 24 hours in advance, leading to inevitable delays in processing. And because charts were rarely completed by the time the courier would arrive to pick them up and transfer them to the hospital, final preparations often fell on the OR staff, causing even more delays.

But poor PAT processes weren’t the only roadblock to efficiency in surgical services. Room turnover time in both the hospital and outpatient center also posed a significant challenge to on-time starts. While the national benchmark falls right around 55 minutes, it was taking the hospital an average of 88 minutes to clean up the room and get it ready for the next patient. Inevitably, this meant fewer patients were getting the procedures they needed each day.

Implementing best practices in the OR

We shared these findings with the OR’s executive director—and she wasn’t surprised at all. The leadership knew they had efficiency problems, they just didn’t know how to address them, let alone have the capacity at hand to fix them. And truthfully, we find that many of the organizations we work with have little time left over in their day to tackle these kinds of time-consuming operational changes.

By focusing on several of these key problem areas, the center was able to inject best practices into everyday processes and optimize the surgical sector.

  • As mentioned, a lack of coordination in PAT was causing regular delays that would force either full cancellations, or delays of 30 minutes or more—consequently pushing back all other appointments for the remainder of the day. To improve the rate of on-time starts, we helped leadership leverage best practice research to map out a framework for PAT responsibilities—with measures for accountability to ensure tasks were completed 72 hours before procedures.

  • Next, we worked with them to implement parallel processing to improve room turnover time. This allowed different teams to complete tasks in tandem, so long as their processes did not interfere with one another. For instance, under the new plans, housekeeping would be able to clean the room while anesthesiologists prepped their area for the next patient.

With a plan in place to improve efficiency and room turnover, surgical services now has capacity to increase patient volume by 30%. Seeing such positive results in the OR has prompted the organization to begin looking at how they can apply the lessons they learned from this experience towards their other most profitable service lines—cardiology, neurology, urology, and orthopedics.

While this is the tale of just one institution, the OR tends to be a major profit driver for most organizations, but yet significant returns are often left on the table. So when health systems kick off upcoming margin improvement initiatives, we encourage folks to take a closer look at the OR.


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