Right Size Blocking Allocations in the Operating Room, a Case Study

CHALLENGE

CoxHealth, the only not-for-profit health system in southwestern Missouri acquired a 150-bed hospital in Branson, Missouri at the end of 2012. To achieve the benefit of the acquisition as quickly as possible, the health system needed a swift integration effort focused on eliminating redundancies and?implementing performance improvement opportunities. Leadership engaged Berkeley Research Group (BRG) within the first 30 days of the acquisition. In April 2013, the CoxHealth President and CEO, Steve Edwards, introduced the Working Smarter initiative in response to a changing reimbursement environment in terms of:

? Sequestration

? Medicare cuts and lack of Medicaid expansion in Missouri

? Cuts associated the Affordable Care Act

? Cuts associated Disproportionate Share payments

CoxHealth partnered with the Berkeley Research Group to identify and implement $60 million dollars of greater efficiencies in revenue cycle, labor, non labor and Human Resources expense reduction, patient throughput and length of stay reduction, and clinical documentation. A 2005 technical report by the Health Care Financial Management Association titled ?Achieving operating room efficiency through process integration? indicated that Operating Rooms (ORs) have been estimated to account for more than 40% of a hospital?s total revenues and a similarly large proportion of their total expenses, which makes them a hospital?s largest cost center as well as its greatest revenue source.

Thus, the Surgical Services departments at the flagship campus, Cox South, were benchmarked to gauge possible labor expense reduction and process improvement opportunities. The assessment, conducted by Berkeley Research Group, identified opportunities to improve OR utilization, block utilization and staff productivity.

The scope of the initiative included the Cox South campus which houses the 800-bed acute care facility, CoxSouth, with 22 Operating Rooms, 140 FTEs and of volume of almost 18,000 cases a year, the Meyer Orthopedic & Rehab Hospital (MORH) with 6 Operating Rooms, 29 FTEs and 4,600 cases per year, and the CoxHealth Surgery Center (CSC), an Ambulatory Surgery Center with 4 Operating Rooms, 20 FTEs and approximately 4,300 cases per year.

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submitted by?Cheryl Barratt, Senior Managing Consultant,?Berkeley Research Group, LLC