OR Optimization:Right-Sizing to the Future

BETTY JO ROCCHIO, RN, BSN,

CRNA, MS

VICE PRESIDENT

PERIOPERATIVE PERFORMANCE

ACCELERATION

MATTHEW MENTEL,

CMRP,MHA, MBA

EXECUTIVE DIRECTOR

INTEGRATED PERFORMANCE

SOLUTIONS

Mercy Demographics

$2,093,276,868Perioperative Revenue

$351,487,571Perioperative Spend

$1,741,789,297Periop Contributing Margin

35Facilities

259OR Rooms

210,000Periop Procedures

FYJuly - June

Five Dimensions

of Excellence

Financial

•Retained Surgical items

•Wrong Site Surgery

•Surgical Site Infections

•Minimize distractions

•Satisfaction with waiting times

•Raising OP Surgery Satisfaction

Scores

•Supplies

•Labor

•Overhead/Resources

Triple Aim for Perioperative

Fiscal Year Comparison Perioperative

OperationsFY15 FY14

Periop Locations 35 33

OR Suites 259 232

OR Cases 135,833 125,474

• Inpatient 36,822 35,935

• Outpatient 99,011 89,539

Surgeons 2,602 2,580

• Integrated 1,705 1,650

• Non-Integrated 897 930

Co-Workers 1,768 1,769

• RN 1,033 1,030

• Technical 468 465

• Ancillary Clinical 99 101

• Clerical Support 168 173

Revenue $2,093,276,868 $2,207,931,239

Supplies $253,724,844 $257,820,021

Labor $97,762,727 $100,303,743

Supply Chain Challenges

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

Rev/Case Supply/Case Labor/Case

Impact to

Supply/Case and

Labor/Case

Why is this so important right now?

Perioperative

Services

Reimbursement

shifts

Long-term

viability

High revenue

but also high cost

to deliver care

Impact on margin

contribution are

significant

“What got us here will

not get us to the

Triple Aim!”

Value For Surgery

Appropriate surgical solutions:

▫ Matching clinical need, which includes costs and efficiencies

New world:

▫ Penalties based on Medicare spending and Value Based Purchasing

Business bottom line:

▫ Managing cost of supplies, labor, and overhead

Revenue

Center

Cost

Center

TODAY TOMORROW

Mercy Expense Breakout (Top 14)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

9.8%

3.9%

1.8%

$1.2 BILLION

spend in top 5 categories

Representing

34.6% of Expense

Steps to Success

Assess Current State: Business & clinical environment

Identify Challenges/Barriers: Financial & operational

Clearly Outline Opportunity: Identify & quantify projected benefits

Establish Future State: Standardization & Lean Processing

Alignment: Organizational mission and culture

Communicate & Engage: People – Process – Technology

Define Success: Performance metrics

OR Optimization Goals

Improve OR inventory management

Eliminate patient safety risk surrounding product expiration

Improve execution on product recalls & expiry

Improve workflow in the OR

Leverage the benefits of Unique Device Identifier (UDI)

Appropriately document product information

Improve cost per case accuracy

Supply Chain Challenges

Reimbursement

Inventory

Management

Process and

Workflow

• Healthcare cost

• Patient safety

• Patient satisfaction

• Charge Capture

• Inventory availability

• Multiple product locations

• Inventory value & valuation

• Preference card accuracy

• Recognizing consumption on demand

• Management of expired product

• Management of product recalls

• Product Documentation

• Product tied to Patient tied to Outcome

Supply Chain Opportunities

Reimbursement

Inventory Management

Process and Workflow

• Improved charge capture

• Improved patient outcomes

• Comparative effectiveness/outcome based

analytics

• Inventory as an asset-valuation

• Inventory expense reduction

• Preference cards accuracy/

maintenance/optimization

• Inventory visibility and standardization

• Redesigned, clinically-driven workflows

• UDI and risk visibility

• Instrument and equipment tracking

• Tissue tracking and regulatory compliance

Five Dimensions of Excellence

Clinical Excellence

▫ Inventory Visibility

▫ Preference Card Management

▫ Workflow

▫ Regulatory/Risk Management

Cultural Excellence

▫ Transformative to our OR and Materials

Cultures

Community Excellence

▫ More accurate EMR information

▫ More Accurate Patient Billing Data and Cost

Stewardship Excellence

▫ Improved Visibility to Expenses

▫ Efficiency in Labor Utilization and Productivity

Opportunities for Solutions▫ Metrics to drive results

defined/measured/tracked/reported

▫ Variation Reduction

▫ Automation of Process Work

▫ Optimization at local and system levels

▫ Organized clinical solutions for

procedural workflows (People Work)

Variation

Automation

Optimizatio

n

Clinical

Solution

Metrics

CLINICALLY LED OPERATIONALLY DRIVEN

People Process Technology

Process Redefinition

Right patient, right

procedure, right supplies,

right time….every time.

Patient-centered to improve

care and flow through the OR with awareness of financial impacts to

the delivery of consistent or improved

outcomes

CLINICALLY LED

People Process Technology

Automation

of replenishment

$4.8K

Reduction

in cycle counts

$167K

Improving

clinical user satisfaction

Survey

Ability to

optimally manage owned vs. consigned

inventory

Realizing unrecognized

inventory assets

$2.4M

Improving

inventory utilization

$4.7M

Optimizing

charge capture

$13M

Improving

Preference card accuracy

$459K

Defining Success Through Resource Management

CLINICALLY LED OPERATIONALLY DRIVEN

QUESTIONS? Thank you