One minute of utilized operating room (OR) time can be worth more than $70 in revenue and one minute of staffed OR time can cost $50 or more, making underutilized OR time a huge problem. Each year, roughly 51 million surgeries are performed in the 5,000+ hospitals and 5,000+ surgery centers in the U.S. MGMA estimates that the corresponding utilization of operating rooms across these centers is, at best, 55–60 percent.
Given that, for each percentage point of increased utilization, the benefits of an overhaul are considerable. A single OR can deliver more than $100,000 in revenue to a hospital or surgery center. Even for a small hospital or ASC with 8–10 ORs, the value of increasing utilization by 5 percent can easily be in excess of $5 million annually. For large systems, the value of a single OR can run into the tens of millions. If average OR utilization increased by 5 percentage points, more than 2.5 million patients could undergo procedures within the same OR infrastructure.
Root Cause of Underutilization
The process most health systems rely on for managing the complexity of operating room utilization — block scheduling — needs an overhaul. The typical current process usually goes along the following lines:
- Blocks are assigned to surgeons and service lines and examined on a monthly (sometimes quarterly) basis by the OR committee, which reviews trends in utilization performance by surgeon and service line in order to make informed decisions on the potential reallocation of blocks. The scheduling of the slate of surgeries is then left to the surgeons themselves. Since the OR committee does not have a sufficiently robust, transparent and defensible fact base for allocating OR blocks to different surgeons, there is an inherent subjectivity to the “algorithm” used, which reduces the perception of fairness in the minds of many surgeons. This, in turn, makes surgeons naturally more resistant to releasing their allocated blocks, even if releasing their blocks would aid overall productivity.
- Perioperative business managers feel a significant amount of pressure from such a system and so try to meet the demands of surgeons who want more block time by identifying low-performing blocks that could potentially be reallocated.
- Between OR committee meetings, these managers conduct a series of “bilateral” negotiations, persuading some surgeons to release a block in order to meet the legitimate request for additional block time from a new surgeon or a surgeon whose case load has been growing significantly over the past few months.
- All of this has to be done while keeping other real-world constraints in mind, which could include equipment in a specific OR (e.g., robotics) or calendar constraints (e.g., the surgeon requesting a block can only operate on Tuesdays, and the candidate blocks that could be released are only on Thursdays and Fridays).
Block Scheduling Is Getting an Overhaul
The technology exists and is starting to be used: Imagine a series of timely, accurate charts that are automatically — on a daily or weekly basis — “pushed” to the smartphones of every surgeon, their schedulers and the administrative personnel responsible for managing OR utilization. In addition to providing key statistics on utilization, first case on-time starts, cancellations, cases running long, etc., it creates a high level of awareness in the minds of each surgeon about their utilization performance both in absolute terms as well as relative to their peers. Surgeons are data driven, fact based and competitive; accurate, transparent, automated feedback will go a long way toward improving the utilization even if nothing else was to change.
The data exists and is being used: Several factors need to go into determining a fair and equitable allocation of blocks on a periodic basis. Instead of using historical rules for how blocks have been allocated and redistributed, hospitals can now methodically match supply (e.g., regularly underutilized blocks) to demand based on sophisticated forecasting and predictions for blocks, staff and rooms. This is possible because the necessary data exists within the EHR/scheduling system, e.g., historical scheduling data by surgery (the date, time, type, surgeon, room, duration) and the corresponding surgeon-specific performance metrics.
Forward thinking governance/leadership: Hospital leadership is not just more tech savvy today than it was 10 years ago; an increasing number of CEOs, CIOs, COOs and CMIOs are now not only open to looking at new technologies but are requiring their teams to go through process transformation through data, lean methodologies and sophisticated analytics.
There isn’t much choice: The demand for medical services has never been stronger, and it’s only going to increase. ORs will have to do more surgeries and get reimbursed less per unit for them.
- Population growth: By 2050, the American population will be over 438 million, up from 320 million in 2015.
- Demographics: By 2030, over 20 percent of the country is expected to be over 65 years old, up from 15 percent in 2015. This aging population will greatly increase the demand for chronic clinical therapies and surgical procedures. In raw numbers, the Census Bureau estimates that by 2030, when the last proportion of Baby Boomers will hit retirement age, the number of Americans above 65 years of age will hit 71 million — in fact, one in five Americans will be older than 65. Not surprisingly, by 2025, 49 percent of Americans will be affected by a chronic disease and need corresponding therapies.
- Affordable Care Act: The Affordable Care Act will add another 30 million Americans to the healthcare system by 2025, which means an increase in the demand for operating rooms. Reimbursements will increasingly depend on outcomes and efficacy, quality of care, and patient access. Unless providers increase efficiency in how they process and treat patients, they will need to spend billions in capital spending on new operating room infrastructure.
More healthcare providers are realizing that their operations need a data-driven, scientific overhaul to accomplish efficient and effective OR scheduling. The software and resources are finally available to help achieve such a transformation.
Originally published in IT Briefcase.