This year, the American Hospital Association reports that hospitals could lose between $53 billion and $122 billion in revenue. Public health and the healthcare sector faced severe physical, mental, and financial stressors in 2020. Although some pandemic-driven burdens are finally easing, US hospitals are expected to face enormous fiscal losses in 2021.
Leaders are looking for ways to reduce expenses and boost revenue, and because the operating suite accounts for nearly 60% of annual revenue generation, it’s no surprise that the OR is a focus area for executives.
The mandated cancellations and voluntary delays of elective procedures, or nonemergent procedures, in 2020 not only had a severe impact on hospital revenue, they also created a tremendous backlog of cases that needed to be rescheduled and performed. It’s uncertain just how much of that anticipated financial loss can be negated by the revenue generated with a rebound in cancelled or postponed elective procedures. However, the importance of reducing the backlog of surgical case volume is apparent at hospitals and health systems across the US.
Catching up on the elective surgical case volume backlog won’t happen overnight, but hospitals have begun chipping away at the issue. Because so many are still trying to keep their heads above water, they have to work “smarter” and do more with what they have.
Hospitals don’t have the resources to hire more staff, buy more equipment, or build out more space to handle high volumes. The key is to be proactive and planful. First, hospital leaders must understand exactly how much of a backlog they have and formulate a clear plan of action to schedule and perform surgical cases when patients begin flooding back to the healthcare system for non-COVID-19 care. It is all about getting prepared and figuring out ways to maximize utilization and efficiency before the need arises.
From recent experience with supporting hospitals doing just this, a few key strategies have emerged.
• Maximizing capacity: Hospitals might need to re-think how they approach and categorize patient cases. Harnessing more proactive, planful thinking around bed capacity and workforce availability, hospital leaders are now asking questions such as: Does this really need to be an inpatient case, or can we perform it as an outpatient service?
• Optimizing utilization: Looking across the full enterprise, not just at the surgical suite, is imperative for ensuring hospitals can handle high volumes of cases. Rely on data-driven insights, visibility, and communication to understand what’s happening in the emergency department as well as the inpatient and outpatient areas, and see if there are ways to rearrange or assign resources to make it all work.
One of the largest components of planning and preparing for the resurgence in nonemergent demand and surgical capacity centers around prime-time OR minutes. Perioperative suites will need to run at maximum efficiency, with increased utilization rates throughout 2021 and into 2022 in order to clear the backlog and boost revenue as quickly as possible.
Unfortunately, inherent inefficiencies with block schedule management hinder leaders from achieving their performance goals. Additionally, surgeons lack awareness of available OR time that aligns with the needs of their patients and their schedules, and trying to discover and request that time is overly complex. If a hospital had previously been running at 60% utilization for years, and the COVID-19 shutdown dropped that utilization to 25% to 30% for most of 2020, what is the path to sustaining 70% or even 80% utilization for the next 2 years to achieve a full recovery?
Although traditional block allocation certainly has its benefits, there is a disconnect in using antiquated, manual methods to schedule cases for the most high-tech, most expensive, and most profitable department in the hospital. OR utilization is effectively capped with existing block management methods. It’s not uncommon to find ORs with more than 90% of prime-time minutes allocated, but less than 60% utilization.
Perioperative leaders need to fundamentally reconsider how block time is allocated and managed. Existing block allocation and individual blocks can no longer be thought of as rigid. They must become dynamic.
Simply understanding block utilization overall is an important first step for any organization, but knowing how to create additional volume within the time and rooms that are available is game-changing. Organizations are now turning to solutions that provide intelligent automation—technology that streamlines and automates standard processes while leveraging artificial intelligence (AI) and predictive analytics to identify risk and recommend mitigation strategies in both real time and the future.
The best systems enable perioperative leaders to dynamically manage the block schedule with a multifaceted approach. At a foundational level, blocks that could be reallocated or rescheduled, as well as surgeons in need of more time, less time, or different time based on their historical performance, are highlighted and paired with automated recommendations for the best course of action.
But even with fully optimized block allocation based on trusted, transparent performance data, the concept of dynamic block management includes the flexibility and fluidity to manage changes to single blocks as they arise. Predictive analytics systems can identify individual blocks that are likely to go unused weeks in advance and prompt the block holder to release that time. Other surgeons can review and request these newly available OR opportunities in an open marketplace of time. OR schedulers can leverage streamlined workflows to quickly review and approve these requests.
Thinking of the block schedule as a dynamic factor in the OR and acting accordingly will reduce the costs associated with unused OR time while boosting revenues through increased case volume. By giving perioperative leaders the tools and recommendations needed to allocate block time to the right surgeons, practices, and service lines while also creating an open marketplace of OR time for all surgeons, University Hospitals achieved great results.
This health system, headquartered in Cleveland, needed to cut costs driven by perioperative inefficiencies that included operational waste associated with the OR, staff underutilization, and surgical day variability. They needed to maximize OR utilization and block schedule efficiency. After implementing AI-driven solutions and predictive analytics, they uncovered hidden OR time and increased OR utilization by 5% and surgical volume by 120 cases per month across the system.
Enhancing OR utilization is a massive opportunity for hospitals to optimize operating costs and increase revenue. By using intelligent automation to remove inefficiencies from block scheduling and management and make it a dynamic process, perioperative leaders are optimizing capacity, scheduling, and OR accessibility to fully achieve their financially beneficial performance goals.
If your hospital isn’t using its own perioperative data to accurately forecast OR usage and make recommendations that increase OR access, improve room and staff utilization, and identify opportunities for improving overall performance, what is stopping you?