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10 Executive Briefing: OR Optimization Sponsored by: "P ast performance does not guarantee future results," as every mutual fund investor knows by heart. Unfortunate- ly, in hospitals with traditionally strong surgery depart- ments, executives often forget this warning. Accustomed to solid OR results, they expect strong performance to continue indefinitely. The problem is that in today's rapidly changing environment, successful surgery departments can quickly become struggling ORs. Recently, leaders of Memorial Hospital in Belleville, Ill., took a care- ful look at their surgical services division. Memorial's OR is a mar- ket-leading organization with great staff and loyal physicians. Still, executives were savvy enough to see that good is no longer good enough. Growing competition, declining payment and increasing quality requirements were slowly eroding Memorial's advantages. To prepare the OR for the future, Memorial partnered with Surgi- cal Directions, a consulting firm that specializes in OR transforma- tion. Working together, hospital leaders and Surgical Directions team members implemented changes that boosted the OR's stra- tegic and financial performance. To see how they did it, the first step is to understand Memorial's specific challenges. A history of saying "yes" Memorial Hospital is a 316-bed community medical center 15 miles southeast of St. Louis. The hospital has long enjoyed many strategic advantages, including a loyal surgeon staff, a good com- munity reputation and, since 2008, Magnet nursing designation. Memorial's 2013 inpatient surgery market share was 40 percent. But Memorial also faced a list of challenges. Half of all general surgery cases and 55 percent of orthopedic surgery volume in Memorial's primary service area was outmigrating to St. Louis hospitals. Vascular and urology specialties were also seeing cas- es go "across the river." Traditionally, OR leaders acquiesced to nearly all surgeon re- quests for supplies, equipment and other resources. This tradition of saying yes had created strong surgeon satisfaction, but also contributed to some problems: • Low utilization. Memorial routinely opened 17 or more OR suites. Yet overall utilization was only 46 percent, creating significant gaps in the daily schedule. • High costs. Low utilization meant Memorial was paying nurses for unproductive time, therefore increasing labor costs. In addition, schedule gaps decreased anesthesiology revenue while increasing the need for support by the hospital through a stipend. The OR also had excessive supply and inventory costs. • Efficiency gaps. Process bottlenecks and poor communi- cation across perioperative services created numerous inef- ficiencies. Only 39 percent of cases started on time. Like all hospitals, Memorial needed to operate within a declining payment system and meet rising quality standards. OR leaders knew that achieving both goals required stronger physician align- ment and partnerships. "When you work in an organization for a long time, you become accustomed to a certain way of looking at processes," said Nancy Weston, CNO of Memorial Hospital. "We knew we needed fresh thinking and a fresh perspective." According to Ms. Weston, Memorial's goals included optimiz- ing OR room utilization and staffing models, reducing OR costs, boosting perioperative efficiency and improving overall clinical outcomes. "We also wanted to see financial improvement and development of a strategy for surgical volume growth," she said. Methodical approach Hospital leaders vetted several consulting firms before choos- ing Surgical Directions. The Surgical Directions team evaluated the OR's processes and analyzed operational and financial data. Most importantly, representatives from Surgical Directions spoke extensively with surgeons, anesthesiologists, nurses and hospi- tal executives. The result was a practical plan for transforming the surgery department at Memorial from a good department to a great one. Physician-led governance. Step one was creating a multidisci- plinary Surgical Services Executive Committee to govern the OR. The SSEC is co-chaired by a surgeon and an anesthesiologist; it also includes representatives from all surgical specialties. "The shared governance structure is really different from the old medi- cal staff OR committee," Ms. Weston said. "SSEC leaders work collaboratively with OR nursing leadership and administration to make data-driven decisions and drive operational excellence." Block schedule reform. The SSEC's first priority was to overhaul the OR's block schedule system. Loose block rules and relaxed enforcement were major causes of low utilization. The SSEC es- tablished a utilization threshold of 65 percent and strengthened block time release standards. "Now, the committee is holding their colleagues accountable for not meeting the utilization target," Ms. Weston said. "Going forward, surgeons who are not using their time will lose it." New scheduling processes. Previously, Memorial did not have a standard process for scheduling surgical cases. "Surgical Di- rections worked with the SSEC to reengineer that process," Ms. Weston said. "They really refined the movement of information between the surgeon's office and the OR scheduler to make sure we capture complete patient, procedure and financial informa- tion." The new scheduling process also incorporates discharge planning and case management. Taking the OR from Good to Great In today's healthcare market, the "good OR" is no longer good enough By Patricia May, Barbara McClenathan and Dhir Desai, Surgical Directions perioperative & anesthesia assessment · interim management 312.870.5600 www.SurgicalDirections.com Services – Nursing Managers and Directors Services – Nurse Educators Services – Business Managers Processing Department – Managers and Directors provide you with leadership that will insure stability time of transition.