At the core, hospitals are service organizations. Like any other service organization, they struggle to balance supply (caregivers, rooms, resources, equipment) with demand (patients).
But relative to other service organizations, inefficiencies cost them a lot more: not only millions of dollars in wastage but also potential loss of lives and delays in access to care. With an increasingly aging population, shrinking supply of qualified caregivers, and increasing pressure from payers to be more accountable and efficient, hospitals have no choice but to think out of the box to balance supply and demand much more efficiently.
Many service industries have balanced supply and demand by following a simple principle: Balance demand and supply by removing friction and “making a market” of buyers and sellers. Take the restaurant industry, for example. Before OpenTable came along, it was hard for diners to book restaurant tables; they would have to find a restaurant, look up its phone number, call the restaurant and speak to someone to reserve a table. Restaurants would rely on local newspaper ads and foot traffic to fill tables. That resulted in a supply-demand imbalance — sometimes there are many empty tables and not enough diners and sometimes too many diners and not enough tables.
OpenTable changed the game by doing two things:
• Made it easier for diners to book tables. With OpenTable, diners just need to click a few buttons from their laptop or phone and reserve a table. No more phone calls. As a result, more diners started booking more tables ahead of time.
• Made it easier for restaurants to fill tables. This increased demand from OpenTable diners filled more tables at restaurants. They could predict what their demand would be on a given day and adjust their supply accordingly, thus improving their bottom line.
The restaurant industry revolution did not stop there. Today, there are hundreds of companies removing friction in the entire chain of finding restaurants, reserving tables or ordering food to go as well as providing and sharing feedback. Sitting in California, you can discover great places to eat in Italy, read reviews about them and even gift a table for your loved one for their birthday or anniversary.
Other Industries Where “Democratizing Data” Eliminated Waste
Eliminating the middleman and democratizing data has worked wonders for many industries.
• Travel: Decades ago, to book an airline ticket or hotel room, travelers had to call someone. Online travel agencies like Expedia and Travelocity and many others changed that. They made airline, hotel and vacation reservations as easy as clicking a few buttons. Not only did they remove friction out of the system and balance supply and demand, they brought a lot of transparency and options to travelers.
• Car Rentals: Booking a rental car or a taxi cab was tedious and involved phone calls. Online car rental companies and products like Uber made it as simple as a few clicks. Not only did that remove friction from the system, it diversified supply by adding regular car owners as drivers and lowered prices in many areas.
• “Getting Rid of Stuff”: Garage sales are almost a historical artifact now with eBay, Craigslist and many other such powerful innovations.
The combination of the internet, machine learning and mobile has created a powerful new decision support paradigm: mine data, crunch numbers and send contextual alerts to the right people at the right time. It enables all stakeholders to have the right information they need to make the right decision at the right time. Uber is a classic example. It does a lot of data mining and number crunching to continuously predict demand at a given location and ensure that enough cars are available at the location to service that demand.
OpenTable for Operating Room Block Management
The same approach of removing friction can be applied to the way operating rooms are allocated and used. Operating rooms are key resources in a hospital; they typically bring in more than 60 percent of patients and 70 percent of revenue. Balancing supply and demand for operating rooms is difficult because there is a lot of friction in the system.
• Surgeons find it hard to find operating room block time. If they are doing an emergency procedure, there’s always a room available. But for elective surgeries, surgeons or their schedulers need to make a lot of phone calls. If a surgeon needs block time, another surgeon needs to give it up. Even in simple cases such as surgeons traveling for work or vacations, it’s not easy or intuitive for them to release their unused block time. Operating room managers track and report their block utilization, but that’s not helpful in giving up block time in any way. As a result, a lot of precious block time goes wasted.
• OR managers find it hard to meet utilization targets while balancing surgeon needs. Getting a surgeon to give up block time is difficult, and more often than not, OR managers do not have necessary and sufficient data to convince them. It takes a village to make block schedule changes. Simply saying Dr. X’s utilization is 45 percent and, therefore, we should take away 55 percent of their block time does not work.
How can we remove friction out of the system and make OR block management as simple as OpenTable?
• Leverage data to proactively find reusable block time. By looking at surgeons’ block utilization, case performance and upcoming travel, we can proactively detect unused or underused block time that can be reused by other surgeons. For example, if we know that Dr. X is about to take two weeks off in December and they own a full-day block on Mondays, then we can take two of their Monday blocks in December as reusable block time. Similarly, if we can detect that Dr. X is consistently not using three out of eight allocated block hours on Tuesday afternoons, we can take away those three hours and add them to our inventory of reusable block time. This is a better way to reuse surgeons’ block time than to report their overall utilization and ask them to give up time. It removes friction out of the system — nobody likes to give up something unless they are sure they don’t need it.
• Make it available to other surgeons with an OpenTable-like interface. Once we have an inventory of reusable blocks, we can make it available to all surgeons based on their needs and preferences so that they can simply click a few buttons and reserve a block that works for them. So if Dr. Y wants a half-day block next week, they can simply browse available blocks for next week, select one that meets their needs and click a button to reserve it. We can also enable them to “ask” for a block on a given date and notify them as soon as it is available. This removes friction out of the system and makes reserving block time simple. As a result, more blocks will be used, and the overall utilization goes up.
Also, by leveraging the fact that everyone involved in OR operations has a smartphone, we can use push notifications to proactively send them intelligent alerts and further improve planning and execution. For example, if a case ends earlier than expected, we can send an alert to everyone involved with the next case to start early and reduce turnover time. By sending proactive alerts, we can make sure first cases start on time. By tracking pockets of unused time, we can proactively send alerts to surgeons to either use the time or release it for other surgeons to use. The whole notion of “proactive mobile alerts” further removes friction and improves execution across the board, thus increasing overall OR efficiency.
Such a combination of data mining to continuously find reusable block time and mobile technologies to make it easy for surgeons to reserve those blocks can significantly impact OR revenue and operational cost. At a typical revenue of $150 per minute for an OR, it can add millions of dollars to a hospital’s bottom line.
Sanjeev Agrawal is president and chief marketing officer of LeanTaaS, a Silicon Valley-based innovator of predictive analytics solutions to healthcare’s biggest operational challenges. He works closely with dozens of leading healthcare institutions including Stanford Health Care, UCHealth, NewYork-Presbyterian, Cleveland Clinic, MD Anderson and more. Sanjeev was Google’s first head of product marketing. Since then, he has had leadership roles at three successful startups: CEO of Aloqa, a mobile push platform (acquired by Motorola); VP Product and Marketing at Tellme Networks (acquired by Microsoft); and as the founding CEO of Collegefeed (acquired by AfterCollege). Sanjeev graduated Phi Beta Kappa with an EECS degree from MIT and along the way spent time at McKinsey & Co. and Cisco Systems. He is an avid squash player and has been named by Becker's Hospital Review as one of the top entrepreneurs innovating in Healthcare. For more information on LeanTaaS, please visit www.leantaas.com and follow the company on Twitter @LeanTaaS, Facebook at www.facebook.com/LeanTaaS and LinkedIn at www.linkedin.com/company/leantaas.