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Conversations about Optimizing Hospital Operations

To Care for the Poor, Redesign Your Hospital Workflow

How to Help the PoorCaring for the poor will severly tax your profitability unless you redesign your hospital patient workflow and processes.  According to healthcare futurist Joe Flower, “many health care organizations will not survive the waves of newly insured, underinsured and Medicaid beneficiaries” without changing their basic business model.

At the top of his list is the overhaul of hospital workflow.

“The core of this effort,” Flower says,  “is redesigning workflow and processes, right from the threshold of the ED (usually the gateway for 70 to 80 percent of your patient flow), through all in-patient and outpatient services, labs and pharmacy.”

He goes on to detail steps to make the ED more efficient, like “split-flow,” which provides faster triage at the entry threshold to expedite treatment for the most seriously ill or injured patients while less serious patients are examined and then sent to a “results pending lounge,” where they are monitored while awaiting test results.

Process overhauls should aim to reduce the door-to-doc time from the current 30 minute average to just ten minutes, cut ED length of stay below four hours and reduce LWOS to zero. However, ED efficiency “pushes back” on workflows throughout the enterprise, he says.

Success, he says, will be “about robust and powerful systems of bed control and patient tracking, about lean and efficient housekeeping and transportation, about high-tech instant registration protocols.”

At TeleTracking, we totally agree. We’ve long said that the real emergency isn’t in the emergency room. It’s in the rest of the hospital. That’s why we’ve built the only real-time, automated operations management platform of its kind for healthcare. We see real-time management as a major part of the future for the U.S. healthcare system and others around the world.

Flower, CEO of the Change Project, Inc.,  is a healthcare speaker, writer, and consultant who has worked with the World Health Organization, the Global Business Network, the U.K. National Health Service, and professional associations throughout the U.S. and Canada on the future of healthcare.

In a recent edition of Hospitals & Health Networks, he wrote that “there is no way to survive the coming rise in Medicaid recipients, aging boomers, still-uninsured and underinsured without a lean, efficient organization.”

Is Your Hospital Ready to Survive Seismic Shifts in Healthcare?

The healthcare landscape is shifting like an earthquake. And the forces behind it are as daunting as the plates along the San Andreas Fault line.

Current hospital executives came up through the “volume” era, when the task was to get more and better paying customers through the health system.  Now, most markets are being overwhelmed by volume with an aging population, expanded Medicaid and newly insured patients seeking care in huge numbers.

“When there is not enough of what you are selling to go around, operating inefficiently leads to choking on volume. To survive under any business model, we must get the volume down and the value up. Making your operations lean and smart is important under any business model, for any revenue stream. In dealing with the uninsured and Medicaid recipients, it is paramount.”

Other factors contributing to the turmoil in healthcare include:

  • MEDICAID VOLUME — At some time during an average year, a quarter of all Americans are on Medicaid, with almost 50 million enrolled at any given time.
  • REIMBURSEMENT THREATS — Since states must provide for certain poor populations by law, their  only control over Medicaid costs is to cut reimbursements and limiting utilization by making access “massively inconvenient.”
  • INCOME INEQUALITY – In the current economy, fewer working age adults are able to find work with a living wage or start an ongoing business.
  • ED CONGESTION — Studies show that newly insured patients likely will use the emergency department 40 percent more than they did when uninsured, contrary to the common assumption.
  • BUDGET CUTS — Medicaid reform proposals are largely focused on block grants to the states which Congress then could reduce over time. There are no reforms contemplated to put money into Medicaid.
  • GROWTH IN THE UNDERINSURED — Flower says the Affordable Care Act actually will expand the ranks of the underinsured. The “bronze” plans cover only 60 percent of most expenses; the “silver” only 70 percent, which is still below the 80 percent typical of corporate plans, and with much higher deductibles. The underinsured, therefore, often act as though they are un-insured.
  • EXPANDED ELIGIBILITY – The ACA has expanded Medicaid in more than half of all states in U.S. to include all adults with income below 138 percent of the federal poverty level.

Lean, Efficient Hospital Workflow Enable “Value-Based Insurance”

Organizations must be lean and efficient to deal with reimbursement cuts and increasing volumes, but bold new initiatives will also begin to take hold, Flower says.

“We must reshape ourselves not just to treat and bill, but to give the maximum value for every dime of tax money by helping poor people get and stay healthy through any means necessary.  So give them instead what they truly need: Divert these populations into “value-based” programs.”

South Carolina and Michigan now pay a greater percentage of the cost for clearly valuable therapies and tests, and less or zero for therapies and tests of doubtful utility.  That list includes induced labor, caesareans before 39 weeks, complex back surgery for simple back pain, or arthroscopic knee surgery to repair a torn meniscus.  When the state of Oregon introduced such a plan for its public employees in 2010, the seven percent annual rise in premiums was converted to a 0.5 percent per year decrease.

One thing is clear, Flower says.  If healthcare organizations continue to treat the growing patient population reactively, profiting from “less than optimal” procedures, often in the most expensive way possible, they won’t be around for long.  In short, they need to redesign their hospital workflow and process.

What’s your reaction to Flower’s advice?  Have you redesigned your hospital?

Categories: Author: Dennis Morabito, No Margin, No Mission, Patient Flow, Real-Time Capacity Management