1. Involve physicians.
“Don’t just pay lip service. Real, meaningful physician engagement is vital and should focus around staffing, clinical patient, financial, operational and other issues,” advised Anna Silva, vice president for ancillary services with 530-bed Our Lady of the Lake Regional Medical Center in Baton Rouge, La., their program controls a 45% market share and ranks above the 90th percentile in patient satisfaction. “Our philosophy has been to try to build the best program in the state and invite them to build it with us. We make suggestions, but ultimately the physicians assume the lead.”
Kellie Risser of Risser Consulting of Columbus, Ohio, and former CFO for the New Albany Surgical Hospital in New Albany, Ohio, says physician involvement makes a much richer hospital orthopedics program and offers a stronger patient continuum of care, from the physician office through the hospital stay and into physical therapy and rehabilitation.
“The more involved the physicians are in the whole care and management of the program, the more successful it will be,” Ms. Risser says. “It also sends a consistent message to patients. When doctors are engaged they become aware of hospital costs and can help hospitals reduce unnecessary costs.”
Engaging physicians also requires involving them in quality initiatives. “Once doctors see comparative utilization and peer-to-peer data, they respond,” observed Steve Thomas of the Indianapolis-based consulting firm, Health Evolutions. “There’s almost always an opportunity for improvement when both sides are interested, committed and truly engaged.”
Victor DiPilla, vice president of operations for The Christ Hospital in Cincinnati, says his hospital needed to rebuild its orthopedics program several years ago after losing a large orthopedics group over disputes on standardization of implants and other devices and on-call coverage. By engaging the physicians who remained, The Christ Hospital was able to reduce its patient length of stay, cut costs and improve patient satisfaction through several physician-initiated programs and purchases.
And that has grown the program as well. By implementing pre-operative screening procedures, it has seen a 60% reduction in surgical site infections, and by launching a pain block program, The Christ Hospital has decreased patient nausea, allowing patients to complete their physical therapy and rehabilitation on schedule. It has also improved patient satisfaction and allowed next-day discharges for many joint procedures, he says.
2. Create a dedicated orthopedics wing or building.
“The physician-owned hospital debate has infused a degree of competition into the marketplace,” says John Martin, CEO of Indiana’s largest orthopedics practice, 70-physician OrthoIndy. Martin also oversees the 37-bed Indiana Orthopaedic Hospital, ranked that state’s top orthopedics hospital.
“There are some real advantages to segmenting services, advantages in improving patient care and growing the bottom line,” Mr. Martin says. “When orthopedic patients come into a hospital and go to an area focused on orthopedic care, whether it’s a for-profit, physician-owned hospital or a not-for-profit acute care hospital, they know that they’re at the center of care. It really differentiates the very successful orthopedics programs from the not so successful programs.”
While the Indiana Orthoapedic Hospital only has a small number of the Hoosier state capital’s hospital beds, it controls between 25% and 30% of its orthopedics market.
“We’ve driven the marketplace in orthopedics,” says Mr. Martin. “A dedicated, focused orthopedics facility offers patients a different kind of experience.”
For Mr. Martin that translates not only to patient satisfaction, but increased physician approval as well.
“Doctors can come see patients in clinics, perform surgery and walk through the hospital to make rounds and place orders. They don’t waste that two-to-three hours in daily driving, parking and walking between sites. They can be more efficient.”
Mr. Martin says streamlining management is another tool that has helped his hospital.
“We can solve problems and address physician concerns easier because there aren’t the layers of bureaucracy that slow down decision-making,” he explained. “We can do in three or four weeks what takes most acute care hospital a year to do. The bureaucracy is often what frustrates physicians and leads to disconnect.”
3. Focus on quality and profits will follow.
John Reynolds, a consultant for Century City Doctors Hospital in Los Angeles and the former CEO for New York City’s Hospital for Special Surgery (HSS), says hospitals should follow the lead of Japanese carmakers whose focus on quality improvement processes helped them to dominate the automobile industry.
“They succeeded because the quality was there and they used the target of achieving the highest quality to attain profitability,” Mr. Reynolds says. “Doing it right the first time offers a better way to move forward. In healthcare that means you don’t have to go back and do it again. Finding processes to cut infections and reduce complications means cutting your costs, improving patient satisfaction and maximizing profitability.”
He says an orthopedics department can improve profits by cutting length of stay by strictly following quality regimens, protocols and processes, such as infection control systems and clinical pathways.
“By focusing on quality, you improve profits,” Mr. Reynolds says. “There is nothing more valuable to a CEO than getting that bed back one day early.”
Before he retired from HSS, he said that hospital, which has been ranked by U.S. News & World Report as America’s best orthopedic hospital, was asked to help the British Health System replicate its success with a hospital in London, the South West London Elective Orthopaedic Centre.
“We showed them how, with the same resources, using our methods and efficiency measures, they could achieve success. Now they do two or three times the previous volume with much shorter patient waits,” Mr. Reynolds says.
4. Create and maintain a value analysis team for equipment purchases.
“Our team evaluates and assesses the implants and other devices, materials and equipment ordered and used in the hospital orthopedics department,” William Beaumont’s Dr. Herkowitz says. “We take a pretty hard line and don’t put up with price gouging. We look at different companies with equivalent products and do such a large volume that very few companies won’t negotiate with us and want to be here.”
Dr. Herkowitz says Beaumont’s staff has committed to cost containment and will switch companies if necessary.
“We have to make sure that the price is fair to our hospitals so we can be profitable as well. Our team costs out and analyzes everything we buy, from operating room drapes to sutures and implants. We don’t necessarily go for the cheapest product available, but the product with the highest quality at the best cost,” he says. “We bid out everything.”
Dr. Thomas Sculco, surgeon-in-chief at New York City’s HSS, says profit margins in the pharmaceutical and device industries are high, while margins for most hospitals and health systems remain flat and low.
“Implant costs eat up 30% to 40% of total reimbursements now for orthopedics,” Dr. Sculco says. “Those companies can’t achieve huge profit margins on our business. Orthopedics departments need to look hard at those costs and negotiate hard. We evaluate all new technologies and manufacturers have to demonstrate those technologies are better and more cost effective to get our business.”
5. Contractually negotiate compliance with quality protocols and initiatives with public and private payors.
Commercial payors and CMS are piloting pay-for-performance and best practices initiatives that incentivize hospitals to adopt evidence-based practices proven to increase patient safety, reduce errors and improve outcomes. Dr. Herkowitz says his system is cooperating with payors like Michigan’s Blues programs on antibiotics and others quality initiatives.
“By agreeing to administer antibiotics within 24 hours, we’re improving patient care by reducing complications and infections,” he says. “That not only saves us money down the road, but also saves insurers money. And they reimburse us better for the surgeries we perform at the same time we’re improving patient safety.”
6. Adopt and follow effective clinical pathways programs.
“Excellence in quality is a result of how you manage your patients throughout the entire experience,” HSS’s Dr. Sculco says. “Our physicians have input into clinical pathways that offer consistent, quality patterns of care. We document what happens to the patient every day, in some cases, almost every minute. Patient expectations are fulfilled and the throughput is very efficient as a result.”
7. Make patient education a profit center and marketing tool.
Century City’s Mr. Reynolds says his hospital creates pre-admissions plans for patients and offers free classes at least one week before admission.
“We let them know what’s going to happen to them each day and tell them what to expect throughout their stay. When they have pain, they don’t panic. They’re prepared for what happens and that leads to a better, healthier attitude,” he says, noting that discharge processes are much smoother because the patient is prepared.
He says the classes are taught by nurses or physical therapists and are viewed as marketing expenses. “Our length of stay has actually gone down and we view the classes as a revenue driver,” he says. “Patients aren’t mad or anxious about going home a day or two earlier, but happier.”
Our Lady of the Lake’s Ms. Silva says her hospital’s pre-surgery program includes testing and education, and has resulted in fewer missed appointments and delays.
“We’ve found significant decreases in cancellations and have cut our length of stay,” she says. “Our patients are readier for discharge and we work with physical therapy and home health providers to insure there’s no fallback in care.”
8. Pre-screen surgery candidates for infections.
“Our pre-surgical screenings for MRSA and other bacteria cost more, but if we find it early, we have pathways for treating it and can reduce problems later,” says Ms. Silva. “We like to get upstream of issues, as opposed to waiting and reacting downstream.”
9. Align incentives.
Consultant Mark Blessing of the Fort Wayne, Ind., office of accounting firm BKD, says hospitals need to work closely with their surgeons to develop initiatives that benefit both parties. Blessing says sharing information with physicians about outcomes, lengths of stay, expenses and comparative performance data explains how doctors are doing and helps engage them.
“If the overall goal is to align incentives for hospitals, physicians and patients to get the best outcomes in the most efficient manner, hospitals can work to keep surgery schedules efficient, block time in OR suites and open outpatient surgery centers in locations more convenient and accessible to physicians and patients alike, instead of in distant hospital interiors,” Mr. Blessing says.
He says offering state of the art equipment and helping physicians develop cutting edge services cement physician loyalty and encourage them to practice at that hospital. Helping local orthopedics groups recruit new surgeons mutually benefits hospitals and group practices.
Dr. Sculco says HSS physicians are encouraged to participate in cost-cutting programs and can share in the savings incurred, but not individually. At HSS, those savings support department research efforts. “And if the savings can be shared with the department, then that goes a long way to encourage greater participation.”
10. Don’t just improve market share, but expand and redefine your market.
The Indiana Orthopaedic Hospital’s Mr. Martin advises hospital executives to seek new areas and unmet needs for services. Martin says many rural or community hospitals don’t perform enough procedures to justify purchasing expensive equipment and recruiting high-priced specialists and says those facilities may be eager to open new relationships.
“Start looking to different parts of your region where patients lack access to technology and cutting-edge services,” suggested Mr. Martin.
He says that while his group hasn’t marketed actively outside Central Indiana, he reported that admitted patients throughout the Midwest seek services at OrthoIndy.
“They’re coming to us.”
— Contact Mark Taylor at markic46321@yahoo.com.
