Is your HOPD fighting a losing battle with ASCs? 11 best practices to level the playing field

Keep costs low. Minimize waste. Maximize efficiency. These are a few of the most critical principles to running a successful ambulatory surgery center. They need to become the core components for running a hospital outpatient department.

Do you think your HOPD is performing well? Research how much it received in reimbursement this year. Now, reduce that figure to 58 percent of the total reimbursement. Would you still think your HOPD is performing well if your revenue was this lower figure? The reality is that if a consumer goes to an ASC for a procedure, the surgery center receives, on average, 42 percent less for that surgery than an HOPD. Despite a lower reimbursement rate, ASCs remain profitable because of their established efficiencies, which HOPDs can adopt.

Why? Unfortunately, inefficiencies found in a hospital's inpatient services will often creep into its outpatient services, leading to an increase in costs and waste, decreased efficiency and lower case volumes. Healthcare reform promotes cost-efficient care, and care delivered in a clinically appropriate site of care. ASCs intend to be a part of the solution by providing a low-cost, high-quality alternative to inpatient care. HOPDs need to follow suit or risk losing volume to surgery centers.

Furthermore, as the trend for performing inpatient procedures decreases, the volume of cases being performed on an outpatient bases is increasing. It is anticipated that the gap between ASC reimbursement and HOPD reimbursement will shrink (OIG stated in its FY 2013 Work Plan that it will examine whether a payment disparity exists between ASC and HOPD payment rates for similar surgical procedures). As such, HOPDs must make their outpatient surgery strategies a priority. The more an HOPD operates like an ASC and less like a hospital, the more likely it is to be an efficient department, thereby becoming more competitive with freestanding ASCs in its market.

Here are 11 best practices to focus on that will help you ensure your HOPD runs like an ASC and retains a significantly higher percentage of its reimbursement revenue.

1. Perform a perioperative operational assessment.
This assessment should include reviewing your data, observing current processes and talking to the key stakeholders, including surgeons, anesthesia providers and staff. The areas that should be assessed include case types, scheduling, patient registration, pre-op, intra-op, PACU, materials management/supply chain, central sterile processing, anesthesia and surgeon satisfaction. This assessment will be more effective if performed by someone not directly involved in the operations as he or she will be in a position to analyze performance from a fresh perspective.

One of the primary objectives of the assessment is to identify areas for improvement and quantify approximate cost savings achievable through process changes. Cost savings can only be obtained by developing recommendations for improvement, forming work groups to review and assess the recommendations, develop a plan with timelines and then execute the changes. It will take the combined support of hospital management, surgeons, anesthesia and staff to improve efficiencies within your HOPD.

2. Streamline processes. Identify, setup and streamline the processes in your HOPD.
Two critical examples of this would be the scheduling process and pre-surgical testing. However, the workgroups and team should evaluate all the processes of the HOPD to identify possible ways of eradicating redundancies and unnecessary processes.

The scheduling process and the development of the surgery schedule and the manner in which that schedule is followed is the life blood of an efficient surgery department. The key to successful surgery scheduling includes planning, scheduling of patients and the administration of the schedule. The identification and coordination of all necessary resources (e.g., surgical staff, anesthesia providers, rooms, equipment, supplies, instruments, support staff, central sterile, pre-surgical testing) are essential for successful scheduling.
Another crucial process to evaluate is pre-surgical testing. It should be noted that the purpose and overall goal of pre-surgical testing is to gather the clinical information appropriate and necessary for the safe and effective administration of anesthesia through a process that is convenient for patients and physicians and results in efficient surgical throughput. You need to ask yourself: Is your pre-surgical testing efficient and convenient for your patients? Do we require unnecessary tests for outpatient surgery?

3. Focus on physicians.
How are your relationships with your physicians? It is critical to understand the importance of physician engagement for a successful HOPD. You must incorporate hospital/physician collaboration in the improvement process, and establish procedures and structures along the way to ensure that such collaboration continues as a normal course of business.

There is an immediate need to involve the surgeons in all levels of decision-making related to perioperative services. Open channels of communication where the surgeons can feel their concerns and issues are appropriately addressed by management. Not all will participate, but the opportunity to provide input and direction regarding decisions affecting their surgical environment is commonplace for most surgeons, especially in an outpatient environment, and they will not appreciate losing this ability. Key stakeholders must be engaged — and kept engaged — in improvement initiatives to accomplish goals.

4. Conduct a comprehensive review and benchmarking of perioperative services.
Are you collecting data on the on-time starts, turnover times and case costing? To effectively use industry benchmarks or indicators as comparison guidelines for operational efficiencies requires an organization to collect valid data consistent with the methodology used to establish the benchmark. Comparable benchmarking information for clinical efficiencies in HOPD ORs should be based on the types of procedures performed.

The implications of benchmarking for hospitals are that it can be used to identify and improve avenues of serving the needs of surgical patients and, thus, increase their satisfaction with care received. Additionally, benchmarking provides hospital management with indicators that can be used to improve overall operational and cost efficiencies and increase bottom-line profits.

5. Develop performance dashboards. These dashboards would include what your team determines are the most important numbers to watch, all gathered together in one place and displayed in easy-to-read graphs. These figures would provide real-time data that is accurate and actionable.

Word of caution: Don't collect and place information on a dashboard that will not be addressed or have action taken to improve it when the data moves to a less positive position.

6. Improve OR throughput and efficiency. This is achieved via block scheduling and OR utilization, preoperative patient preparation processes, on-time starts and effective room turnover.

7. Maximize labor efficiency. Once processes are streamlined, staffing needs to be evaluated to ensure efficiency. For example, if you have eight ORs, and the surgeons all want 7:30 a.m. start times, you may start the day by opening eight rooms, but then reduce the number of open rooms to address the remainder of the schedule. Consider evaluating the need for and benefit of using pro re nata staff in order to have flexibility with your staffing.

8. Build strong perioperative governance. As noted earlier, key stakeholders must be engaged in the initiatives and partner with the hospital to accomplish goals. Develop the composition and role of a surgical steering committee to represent and include surgeons, anesthesia providers and perioperative services management on a formal and regular basis. This committee should assist in the facilitation of day-to-day communication among all groups involved in perioperative processes.

9. Reduce supply costs and improve inventory management.
ASCs that are most successful have enough supplies to perform procedures on their schedule, with just a little extra to account for last-minute additions. HOPDs should have the same mentality for their elective outpatient surgery cases. To ensure you are stocking an adequate and appropriate amount of supplies, and the right supplies, focus on developing very accurate preference cards for all of the physicians who perform procedures in the HOPD and every procedure the physicians may perform. This will not only help keep supplies lean and make sure appropriate orders for supplies are placed, but it will also help staff members to effectively set up rooms with the correct supplies needed for each case.

10. Assess anesthesia practices. The presence and participation of a high-performing anesthesia group generally results in faster room turnover, higher surgeon satisfaction and overall operational excellence. On-time case starts can make the difference between profitable and unprofitable ORs. There are multiple causes for late starts; they include clinical complications, unavailable instruments or supplies, unavailable laboratory reports or other paperwork, delays in room turnover and late arrivals on the part of surgeons, patients, and, yes, anesthesiologists and nurse anesthetists. Almost all of the problems listed here are within the control of the anesthesiology group working with the hospital to manage the ORs.

11. Plan for and implement perioperative information systems. You should invest in software that tracks case volume and cancelations, for example, by physician, by specialty and by CPT code. It should have the ability to track benchmarking data, case costing and all other performance indicators utilized on a daily basis with your dashboards. The system needs to integrate with the hospital software system so quality metrics are also tracked.
HOPDs that actively put into place these 11 best practices will see improvement in their bottom-line performance, profitability and physician satisfaction.

Jessica Nantz is president and founder of Outpatient Healthcare Strategies (www.outpatienthcs.com), a provider of healthcare consultancy services for ambulatory surgery centers, hospitals and physician group practices based in Houston.

More Articles on OR Efficiency:

8 Steps to Elevate Profitability at Surgery Centers
20 Questions to Assess Hospitals' Operational Efficiency

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