Reaching Past the "Low-Hanging Fruit": 5 New Ways to Cut Costs in a Mature Surgery Center

If you've run a surgery center for a number of years, you have probably exhausted many cost-cutting options: standardizing supplies, cross-training staff, and compressing the surgical schedule, for example. Jim Stilley, CEO of Northwest Michigan Surgery Center in Traverse City, Mich., has worked at his facility for nearly seven and a half years. Here he offers five ideas for cutting costs in a mature surgery center.

1. Install IR/RFID locators to track patient progress.
Northwest Michigan Surgery Center started using RFID locators to track patient progress from the pre-op area to the OR to the PACU. "We use a company called Versus Technologies that puts a badge on the patient, physicians and nursing staff," Mr. Stilley says. "It basically tracks everybody in the surgery center." He says the surgery center is equipped with monitors, so the nurses can look up and see how long the patient has been in the operating room. This helps with turnover times, since the team needs to be ready to turn over the room as soon as the patient moves to the PACU. He says the monitors also help the center balance workload in post-op and cut down pre-op wait times by indicating when staff is finished with each phase of patient care.

"If you know the average time a patient stays in the operating room is 20-25 minutes, and you see the patient is at 18 minutes, you know the room will be opening up soon," he says. This helps the pre-op staff prepare the pre-op patient to move into the OR and the PACU staff prepare the recovery area for the incoming surgery patient. He says the surgery center has dropped its average time in recovery by approximately 5-10 minutes, which has a significant effect on staffing costs. "When you're talking about 18,000 patients times 10 minutes, that's a lot of time," he says.

2. Use nurse-directed teams. Mr. Stilley says his surgery center uses "nurse-directed teams," meaning groups of patients are taken care of by an RN, an aide and a unit clerk. He says this saves money by allowing the registered nurse — who has more clinical qualifications than the aide or medical assistant — to turn over appropriate functions to the other team members and instead focus his or her time on the overall picture in healthcare delivery. "The RNs are basically managing a care team, and it allows them to see more patients per RN because they're delegating appropriate duties," Mr. Stilley says.

For example, the aides are responsible for helping the patient sit up after a procedure, discontinuing the IV with nurse recommendation, transporting the patient out of the facility or getting nourishment for the patient after the procedure. "They're also a trained set of eyes," Mr. Stilley says. "If the nurse is taking care of three or four patients, that's another set of hands and eyes that's there if a patient needs more care." He says this staffing arrangement gives nurses support while reducing staffing costs by cutting the number of RNs in the facility at any given time.

3. Divide up "length of stay" times to determine problem areas.
Mr. Stilley says examining length of stay is only useful if you know where holdups exist in your surgery center. He says his surgery center divides up the patient stay into sections to determine where the outliers exist. He says he starts on the front end and looks at:

• How long the patient is in admission
• How long the patient is in pre-op
• Time from when the patient enters the OR until the incision is made
• Time from incision to close
• Time from close to when the patient leaves the OR
• Turnover time (from when the patient leaves the OR to when the next patient enters that OR)
• Recovery time

The surgery center then examines the entire length of stay for the patient, from admission to discharge. "We like to track and trend those times, because as time pressure builds on the physicians, we like to show to our physicians that we are staying within our norm," he says. "It's helped to minimize the bad days — if they're behind and they feel the surgery center isn't operating in a way it normally does, it allows us to see that the event is truly an outlier." He says outliers are generally caused by pre-op, when the patient is getting ready to go into the OR. Turnover times are also impacted by the amount of staff present in the ASC on a particular day.

4. Understand the "levers" that make benchmarks move.
You won't be able to make changes in your surgery center processes if you don't understand how actions affect your benchmarks, Mr. Stilley says. "I see a lot of data collection and tracking and trending, but we should be making targets and we should know what levers in the organization to pull to move towards those targets," he says.

For example, if supply costs are higher than you would like, make a target and try one action at a time to get to that target. If you try a slew of actions at once, you won't be able to tell which one has the greatest effect — or, even worse, if some have negative effects that are hidden by the positive effects of others. So if supply costs are too high, start by updating physician preference cards; once you've noted the effect, move on to re-negotiating vendor contracts that meet your needs, standardizing brands, then joining a GPO.

5. Work staff at about 80 percent of possible production. Mr. Stilley says surgery centers should use benchmarking to calculate how much work the staff can do when working at 100 percent productivity. Once you have that number, reduce workload to around 80 percent of total possible productivity. "If we have an unforecasted day/month, where we're doing 20 percent more than we thought we could do, we know the staff can be stressed a full capacity for a short period of time," he says.

This tactic will save the surgery center money in two ways. First, the surgery center will be able to work at total efficiency in days/months when more cases than expected are scheduled. Second, the surgery center staff will work productively but happily the rest of the time, meaning no one is too overworked and turnover rates are likely lower. "If we have to hire more people, that takes away from next year's raises and profit-sharing," says Mr. Stilley.

Related Articles on ASC Turnarounds:
Is Out-of-Network Billing Still a Viable Business Strategy?
What Are the Best Ideas for Orthopedics Now? 3 Industry Leaders Weigh In
5 Points on the 23-Hour Recovery Care in ASCs

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