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Minimizing the Impact and Cost of Inefficient O.R. Utilization Michael Monea moneamj@hotmail.com Joe Laden joeladen@aal - PowerPoint PPT Presentation


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Minimizing the Impact and Cost of Inefficient O.R. Utilization Michael Monea moneamj@hotmail.com Joe Laden joeladen@aalouisville.com. Take Home Message Anesthesia Billing Data can be used to: Analyze OR Utilization Suggest Alternative Scenarios: Obtain Financial Support

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Minimizing the Impact and Cost

of Inefficient O.R. Utilization

Michael Monea

moneamj@hotmail.com

Joe Laden

joeladen@aalouisville.com


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  • Take Home Message

    Anesthesia Billing Data can be used to:

    • Analyze OR Utilization

    • Suggest Alternative Scenarios:

      • Obtain Financial Support

      • Change OR Allocation


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  • The OR Utilization Spreadsheet

    ASA Newsletter

    Practice Management Department

    June 2004

    “How Many Rooms Do We Need”

    September 2004

    “The Cost of Inefficient O.R. Utilization”


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Why use Anesthesia Billing Data?

  • OR Data From Hospital Not Available

  • OR Data From Hospital Not Useable

  • Group Covers Multiple Facilities

  • More Control Over Use of Data


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Source of Anesthesia Billing Data

  • Practice Management System Reports

  • Billing Company Reports

  • Custom Report May be Necessary


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Sample Reports From

Anesthesia Billing Data


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OR Time By Hour Of Day 01/26/05 01/26/05 Wednesday

Inter- Max

val ORs Hours %Util Hours In This Time Intverval

0:00 1 1.0 7% ***

1:00 1 1.0 7% ***

2:00 1 1.0 7% ***

3:00 1 0.9 7% ***

4:00 0 0.0 0%

5:00 0 0.0 0%

6:00 0 0.0 0%

7:00 8 3.1 22% ***********

8:00 12 9.6 68% ************************************

9:00 14 12.5 89% ***********************************************

10:00 14 13.1 94% **************************************************

11:00 15 12.5 89% ***********************************************

12:00 14 11.2 80% ******************************************

13:00 11 9.4 67% ***********************************

14:00 12 10.3 74% ***************************************

15:00 8 6.9 49% **************************

16:00 6 5.1 37% *******************

17:00 5 3.3 23% ************

18:00 2 2.0 14% *******

19:00 2 2.0 14% *******

20:00 2 1.1 8% ****

21:00 1 0.1 1%

22:00 1 1.0 7% ***

23:00 1 1.0 7% ***

OR Hours,Total : 108.10

OR Hours Before 3:00: 85.75 79.3% OR Hours After 3:00: 22.35 20.7%

OR Utilizaton 14 OR's from 7:30-3:00 81.7%


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HISTORICAL UTILIZATION

Total Before Before 3:00

Date Cases Hours 3:00 pm Utilization

01/08/04 25 53.02 45.10 43.0%

01/09/04 42 95.03 73.55 70.0%

01/12/04 27 74.78 56.83 58.0%

01/13/04 39 105.03 75.32 71.7%

01/14/04 43 96.55 81.13 77.3%███

01/15/04 35 94.10 76.11 72.5%

01/16/04 39 82.21 61.94 59.0%

01/19/04 28 88.55 72.74 74.2%

01/20/04 26 58.99 52.08 49.6%

01/21/04 42 88.74 72.09 68.7%

01/22/04 28 78.82 63.34 60.3%

01/23/04 43 92.03 68.33 65.1%

01/26/04 41 101.75 80.17 81.8%

01/27/04 41 112.28 76.81 73.2%

01/28/04 38 86.44 68.04 64.8%

01/29/04 43 107.44 83.17 79.2%

---------------------------------------------------------

HIGHEST UTILIZATION DAYS:

03/02/04 85.9

05/05/04 90.2

08/18/04 91.8


Definition of or utilization l.jpg
Definition of OR Utilization

O.R Utilization =

Case Duration + Turnover Time

▬▬▬▬▬▬▬

Available time


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Case Duration

Anesthesia Stop End Time –

Anesthesia Start Time

( ≈Surgical time)


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Turnover Time

Time Between Cases to Prepare

Operating Room and Equipment

May need to be estimated


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Available Time

Normally Scheduled Prime Shift Hours

Example:

8 O.R.’s – 7:00 a.m. – 3:00 p.m.

2 O.R.’s - 7:00 a.m. – 5:00 p.m.

Total = 84 Hours Avaliable Time


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Utilization Example, 1 OR

OR Available 7:00 – 3:00

Case 1: 7:00-9:00

Turnover 9:00-9:30

Case 2: 9:30-12:30

Turnover 12:30-1:00

Case 3: 2:00-2:30

Total Turnover: 1.0

Total Case Time: 4.5


Example utilization calculation 1 or l.jpg
Example -Utilization Calculation, 1 OR

(Case Time + Turnover) / Available Time

(4.5 + 1.0) / 8 = 68.85%

4.5/8 = 56.25% without turnover


Annual utilization at facility l.jpg
Annual Utilization at Facility

Total Annual Prime Shift OR Hours Billed

minus

Total Turnover Time

divided by

Total Available OR Hours


Example l.jpg
Example

  • 20 OR’s covered

  • Prime Shift – 8 hours/day; 7:00-3:00

  • 12,500 cases / year

  • Anesthesia bills 20,000 hours / year during Prime Shift

  • Anesthesia bills 25,000 total hours /year

  • Turnover time averages 30 minutes

  • Total OR Revenue - $7,500,000


Example 20 or s available hours l.jpg
Example – 20 OR’s - Available Hours

20 OR’s

x

8 hrs/day

x

250 days

=

40,000 Available Hours


Example 20 or s cases day l.jpg
Example – 20 OR’s Cases/Day

10,417 Prime Shift Cases

/

250 days

/

20 OR/s

=

2.08 Cases / OR / Day


Example 20 or s turnover l.jpg
Example – 20 OR’s Turnover

Total Turnover Time =

(daily cases – 1)

x

Days

x

OR’s Covered

x

Average Turnover Time


Example 20 or s turnover21 l.jpg
Example – 20 OR’s Turnover

(2.08 cases/day – 1)

x

250 days

X

30 minutes

X

20 OR’s

=

2,700 hours Turnover Time


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Example – 20 OR’s Utilization

(20,000 Annual OR Hours

+

2,70 0 Turnover Hours)

/

40,000 Available Hours

=

56.75% Average Annual Utilization


Hourly or revenue example l.jpg
Hourly OR RevenueExample

Hourly Revenue = OR Revenue / OR Hours

$7,500,000 / 25,000 OR Hours Billed

=

$300/hr.


Lost revenue l.jpg
Lost Revenue

(Desired Utilization

-

Actual Utilization )

x

Available Hours

x

Hourly Revenue Rate


Lost revenue example l.jpg

(80% - 58.75%)

x

40,000 Available Hours

x

$300/hr.

=

$2,544,000 Lost

21.25%

8,480 hours

Actually $2,248,436 when accounting for turnover between additional cases

Lost Revenue- Example


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Unused OR’s Another view of underutilization

80% - 58.75% = 21.25.3% unused time

Equals 21.25% x 20 OR’s

=

4.25 average unused OR’s


Desired utilization l.jpg
Desired Utilization

  • Literature = 75%-85% possible

  • Analyze Busiest Days

    • 10 days of year with largest number of cases

  • Analyze Busiest OR’s


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HISTORICAL UTILIZATION

Total Before Before 3:00

Date Cases Hours 3:00 pm Utilization

01/08/04 25 53.02 45.10 43.0%

01/09/04 42 95.03 73.55 70.0%

01/12/04 27 74.78 56.83 58.0%

01/13/04 39 105.03 75.32 71.7%

01/14/04 43 96.55 81.13 77.3%███

01/15/04 35 94.10 76.11 72.5%

01/16/04 39 82.21 61.94 59.0%

01/19/04 28 88.55 72.74 74.2%

01/20/04 26 58.99 52.08 49.6%

01/21/04 42 88.74 72.09 68.7%

01/22/04 28 78.82 63.34 60.3%

01/23/04 43 92.03 68.33 65.1%

01/26/04 41 101.75 80.17 81.8%

01/27/04 41 112.28 76.81 73.2%

01/28/04 38 86.44 68.04 64.8%

01/29/04 43 107.44 83.17 79.2%

---------------------------------------------------------

HIGHEST UTILIZATION DAYS:

03/02/04 85.9

05/05/04 90.2

08/18/04 91.8


Problem l.jpg
Problem

Suboptimal Utilization Represents

Lost Opportunity for Anesthesiologists to Work and Bill.

Because . . . .


Problem30 l.jpg
Problem

. . . . Anesthesia personnel costs are directly related to number of operating rooms covered,

not

number of hours billed.


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Methods to Increase Utilization

  • Acquire more cases

  • Move late cases to prime shift

  • More efficient scheduling

  • Limits on unused block time

  • Close operating rooms


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Some Reasons for Low Utilization

  • Surgeon Preference

  • Hospital Policy/Problems


Reasons for low utilization surgeon preference l.jpg
Reasons for Low Utilization- Surgeon Preference

  • Block Time that is underused and not released

  • Ability to Schedule without delay

  • Want to work late

  • Want to work early

  • Habitually late


Reasons for low utilization hospital policy l.jpg
Reasons for Low Utilization-Hospital Policy

  • Hospitals should want high utilization to minimize personnel and other costs.

  • But . . . . . .


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Reasons for Low Utilization-Hospital Policy

In a competitive local environment:

  • Attract Surgeons with:

    • Plenty of available OR time

    • Liberal Block Scheduling

    • Early and Late Starts

  • Concern with Market Share and Loss of Surgeons to Other Facilities


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Reasons for Low Utilization-Other Hospital Reasons

  • Some procedures are so profitable that low utilization is irrelevant to hospital.

  • Poor OR Management

  • Personnel Problems

  • Bad Scheduling/Information Management Systems


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Bottom Line for Anesthesiologists

  • OR Utilization is largely not controllable by anesthesiologists.

  • But, anesthesiologists suffer financially for low OR utilization


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Bottom Line for Anesthesiologists

Because the costs to staff the OR suite during the prime shift is fixed,

revenue lost by OR underutilization comes directly from the anesthesiologists’

W-2 compensation.



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The OR Utilization Spreadsheet group.

ASA Newsletter

Practice Management Department

June 2004

  • September 2004

    Download Spreadsheet from ASA Web Site:

    http://www.asahq.org/Newsletters/2004/09_04/pracMgmt09_04.html


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To receive this PowerPoint presentation: group.

email:

joeladen@aalouisville.com