Running the OR Like a Business

Elyas Bakhtiari, for HealthLeaders Magazine , December 8, 2009
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To get a handle on the accuracy of supply charges, she spent a few days comparing the supplies used to the charges. That involved collecting all supply packaging for a period of time and physically sorting through bags of materials to see how many used supplies weren't showing up on charge sheets. The gap was about 30%, which she was able to close by implementing the surgical information system's rules-based changing modules.

Invest strategically
Supply costs and daily expenses can be trimmed. But what about the big purchases that cut into the overall bottom line? Coughing up seven figures for a piece of surgical machinery is a tough decision, particularly in this economy. However, hospitals can find themselves in tough situations where the decision not to purchase is just as costly.

Bassett Healthcare was initially taken by surprise when it learned from analyzing surgical services data that it was slowly losing its urology business. The prostate cancer program in particular was whittling away, and patients had begun traveling to major medical centers for treatment miles away.

The problem was the da Vinci surgical robot—or rather the absence of it. Leaders concluded that Bassett was losing a competitive advantage by not having the state-of-the-art surgical options being offered at other medical centers. Patients wanted the advanced procedures and were willing to travel for it. Bassett's mission included providing the local community with appropriate care, so leaders were faced with a decision about the value of spending seven figures on a da Vinci surgical robot or losing their urology business and leaving patients with no choice but to go elsewhere, according to Steven Heneghan, MD, chief of surgery for Bassett Healthcare.

But the decision takes a strategic, long-term look beyond the initial cost-benefit of the equipment.

"We knew that if we lost the prostate business, then our patients that require urologic care are going to have to go somewhere else. If they go somewhere else for prostate problems, then it's likely they're going to leave for other urologic problems. We were watching a downward spiral that we were not willing to accept," says Brooks.

Hospitals are increasingly facing these types of pressures to invest in costly technologies, and they must consider the value added to strategically important service lines, says Katie Fellin, manager with ECG Management Consultants in Arlington, VA.

"You want to determine whether or not the high-dollar investments can be effectively utilized across multiple service lines," says Fellin.

Elyas Bakhtiari is senior editor for physicians and service lines for HealthLeaders Media. He may be contacted at
Saving with Surgicalists

The University of California San Francisco Medical Center originally implemented a surgical hospitalist program in 2005 to deal with emergency call coverage scheduling difficulties. Faculty surgeons were salaried and had little incentive to take call, and when the academic medical center dedicated some money for call coverage, it opted to pay three surgeons to focus on emergency surgeries.

A welcome and unintended consequence, however, was a wider improvement in the efficiency of surgical services, and even some financial gains, says John Maa, MD, director of the surgical hospitalist program and assistant professor of surgery at UCSF Medical Center.

The primary benefit was in emergency surgeries. The surgical hospitalists—or surgicalists—became efficient at some of the more common and complex emergency surgeries through repetition and familiarity. This helped reduce length of stay and improve quality enough that transfers from other institutions increased. The volume of consults jumped significantly and brought a revenue increase as well.

With better emergency surgical services also came an improvement in the broader surgical suite. The surgical hospitalists did not take elective cases when they were handling emergency coverage, and the freed-up block time was absorbed by other surgeons, whose efficiency also improved because they no longer had to work after covering the ED for a night.

"That reallocation of resources is more efficient because it can get patients waiting in hospital through and discharged quicker, and free up inpatient beds so you can admit more and schedule more," says Maa. "You have fewer cancellations."

Elyas Bakhtiari

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