Beyond length of stay: QI’s future lies in intensive use of fixed assets
Look to early inpatient days and better resource use for improvements
(Editor’s note: Hospital lengths of stay may be too short for some patients, depending on their lifestyles. In the second part of the series "Beyond length of stay," which will appear in the January 2000 issue, QI/TQM talks with clinicians who dispute the popular wisdom that patients should be moved out of the hospital as rapidly as possible. Also look for the case profile of a facility that has turned cost centers into revenue centers.)
Most of the gains to be realized from shorter lengths of stay (LOS) are already in the bag. "My personal opinion is that we’ve probably realized 80% of the opportunity in shorter LOS," notes Michael Gustafson, MD, MBA, director of quality measurement and director of clinical operations for the Department of Surgery at Brigham and Women’s Hospital in Boston. While maintaining the gains is a constant task, the next level of opportunity lies at the front end of hospital admissions and in more efficient use of fixed assets including the operating room.
One study1 contends that "not all hospital days are economically equivalent. What is striking is that last-day costs as a percentage of total costs are remarkably small even for patients who undergo no major surgery and have LOS of four or five days."
Gustafson explains: The operating room and immediate post-op phase are a tremendous driver of expense. For example, for a patient who has a four-hour procedure, spends one night in the intensive care unit and two to three days in a routine care unit, up to one-third to one-half of the costs accrue within the first 24 hours. (For a breakdown of costs for surgical and nonsurgical patients, see the tables, "Costs for Surviving Patients for the Hospital at Large" and "Comparison of Patients with Major Surgery and Patients without Major Surgery.")
Suzanne Richins, RN, MBA, FACHE, director of Patient Care at McKay-Dee Hospital in Ogden, UT, puts some perspective on how far health care has come with the example of joint replacements. Patients used to stay in the hospital for 10 days, and now patients go home in three days. "I don’t think we can cut surgical stays much more," she states. But maintaining the status quo might soon become a larger challenge than it seems today.
Some of the control over that aspect of care is outside the realm of the surgical team, and often of the hospital itself. So it’s frustrating and misleading to rate surgeons exclusively by tools that report "appropriate days," says Gustafson. If the rehabilitation or extended care facilities are full, that pushes LOS beyond the appropriate days. As government funding tightens, alternative placements for Medicaid patients are especially vexing. "Maybe we should think about developing our own strategies for long-term care to give us more control over LOS," he suggests.
Amid stricter controls on preoperative testing, it’s the doctors who bear the onus for pulling together enough information from recent records to assess the patient’s condition before going into a procedure. The simple task of completing pre-admission phone interviews is a challenge because people are so busy. In fact, the problems of collecting the vital information and the risk of proceeding without it are such that some physicians cancel surgery unless all paperwork is in the chart 48 hours in advance, Richins says.
Changes are brewing in health care practice and reimbursement that will further dilute the stand-alone value of LOS measures. In reality, some short stays reflect cost shifts instead of cost savings. Gustafson says that the continued shift toward outpatient procedures adds to the difficulty of tracking inpatient LOS performance. For example, some spine operations have moved to outpatient units.
Not easy to interpret the trends
Interpreting LOS trends becomes trickier as patient acuity and severity of illness grow worse each year. For some patients, longer stays are critical to good outcomes, and it’s the case manager’s role to convince third-party payers to cover extra days.
Eliminating the last day of hospitalization cuts costs if the patient goes home to a safe, comfortable environment. It only shifts costs if the person moves to a step-down unit or some other type of health care facility.
Accurate measurement and interpretation of LOS gets trickier when hospitals form integrated systems and parcel out procedures according to staff specialties and bed capacities. "If the more complicated cases are seen at your hospital and the routine ones are referred to other facilities in your network, it affects your overall LOS," Gustafson observes.
The value of small reductions in LOS depends on the connection between bed space and staffing patterns. If your facility synchronizes staff levels with bed occupancy, then the cost savings from shorter stays might increase. "Even then, we have to have some flexibility in staffing to account for the unpredictability of the business we’re in," he says.
Continuous collection and monitoring of data is the best way to manage LOS, says Richins. She illustrates the point with an example in which certain joint replacement surgeons at McKay-Dee consistently showed longer lengths of stay than others.
Follow-up revealed a glitch in post-surgical service, not a variation in the surgeons’ practices. The surgeons in question typically did their procedures at the end of the week and, since the physical therapists didn’t work weekends, the patients waited until Monday for physical therapy. Once the therapists changed their work shifts to seven days on and seven days off, the LOS variances took care of themselves.
McKay-Dee also relies on customer satisfaction surveys and customer focus groups to learn what works and how to improve services. "But you need qualitative information, not rankings," Richins cautions. For instance, instead of feeling short-changed by same-day admission, McKay-Dee’s patients say they appreciate the night’s rest in their own beds before going in for surgery.
Brigham and Women’s Hospital uses two devices to monitor LOS for clinical quality maintenance and to scout for improvement opportunities. Surgical performance is compared to the clinical database published for members by the Oak Brook, IL-based University HealthSystem Consortium.
The program generates observed-to-expected figures for Brigham and Women’s compared to academic peers nationwide. Discrepancies between observed and expected measures reveal quality improvement opportunities.
Another simple device, which Gustafson suggests might work for any hospital, is benchmarking with a comparable facility on selected DRGs. It helps, he advises, to choose an institution and practitioners that your physicians know and trust. For Brigham and Women’s, the benchmark is Massachusetts General in Boston. "We’ve found [benchmarking] to be a powerful tool," he says.
David Butz, PhD, says, "The physicians need to turn their attention to the beginning-of-stay costs; that’s where they have control." Butz is co-director of the Center for Health Care Economics at the University of Michigan Business School in Ann Arbor. Though the strategies for better resource use are no secret, he says, QI professionals still need to figure out how to implement them. And he emphasizes that administrators can do it only with physician involvement.
For years, Butz explains, administrators told doctors to reduce LOS, and the doctors accommodated. "Now, the issue may well be less about cutting expenditures and more about using fixed assets more intensively."
The operating room is one of several expensive capital assets that require maintenance even when it stands idle. "Administrators need to work with the doctors to bring more people into the hospital," he contends. "If we could increase the through-put of a surgical suite by 20%, it could cut overall surgical expense by 5% to 10%."
For some hospitals, intensive utilization of assets happens by default as they strive to take care of large patient populations. "In practice, that spreads the capital cost among more patients," Butz notes.
At Brigham and Women’s, for instance, "We have people waiting at our sister facilities and in our emergency department for empty beds in our surgical suites," Gustafson says. "For us, the benefit of lower LOS is that another patient can get into the system. It’s a way to improve resource utilization." (For a case profile of a facility that achieved a sizeable increase in operating room utilization, see "Four teams revamp perioperative services" and "Old habits crumble under gentle pressure," QI/TQM, August 2000.)
A second asset-utilization opportunity lies in the use of aero-medical services or helicopters. "The equipment is very expensive to staff and to operate. It must be maintained and ready to go whether it’s in the air or on the ground," Butz points out. Academic institutions could use their helicopters to transport donated organs to recipients, while community institutions might contract to transfer patients for other organizations.
Perhaps more challenging than utilization of assets is the cost of doing business with the drug and medical supply industries. Potential savings exist in the mark-up between manufacturing costs and sale prices of pharmaceuticals. But the impasse is the drug industry’s position that high prices are necessary to recoup investments in research and development. "There’s a terrific margin on implants," Richins contends. In both areas, there’s much opportunity in the margin.
The quality professional’s skills in building collaborative relationships may well be the catalyst in implementing the next generation of improvements. The first objective is to supply data to the right people. "When management presents data
and explains issues," Richins says, "the physicians often go even further with the research and bring in solutions."
It helps to compensate physicians if you expect them to invest significant amounts of time in process improvement initiatives, Richins adds.
As part of the Intermountain Health Care network in Salt Lake City, McKay-Dee contributes toward fees for practicing physicians to lead research initiatives on a part-time basis. Among current projects are neurosurgery and women’s surgery.
QI professionals need to go further than existing information can take us, however. "Doctors need a significantly better quality of data about the costs of surgical practice," Butz points out.
"They tend to be data-driven individuals, and they have little data to work with." When it comes to delivering this caliber of data, administrators show up empty-handed, he observes.
Judy Dahle, RN, MS, director of OR Benchmarks, a Santa Fe, NM-based surgical process benchmarking firm, views bridging the data gap as a task that takes a quality professional’s experience with interdisciplinary team building. In addition to the surgical services insiders, business, finance, purchasing, and information management specialists belong at the table.
"We need to drill down to the true costs of doing our business," she stresses. We still don’t understand the discrete cost for each surgical process — at what phase of care are the costs high or low? We’re not there yet," she explains.
Although OR Benchmarks has made advances in measuring the direct cost of supplies and personnel, the next challenge is to pinpoint indirect costs. Some facilities are currently testing activity-based costing methods for expensive procedures such as total hip replacements.
"Hospitals don’t know exactly how to measure these things, but we’re learning," Dahle says.
Reference
1. Taheri PA, Butz DA, Greenfield LJ. Length of stay has minimal impact on the cost of hospital admission. J Amer Coll Surg 2000; 191(2):123-130.
Need More Information?
For more information on length of stay as a resource utilization indicator, contact:
- Suzanne Richins, Director of Patient Care, McKay-Dee Hospital, Ogden, UT. E-mail: [email protected].
- Michael Gustafson, MD, Director of Quality Measurement and Director of Clinical Operations for Surgery, Brigham & Women’s Hospital, Boston. E-mail: [email protected].
- David Butz, Co-director of the Center for Health Care Economics, University of Michigan Business School, Ann Arbor. E-mail: [email protected].
For more on benchmarking and measuring surgical processes, contact:
- Judy Dahle, Director, OR Benchmarks, P.O. Box 5303, Santa Fe, NM 87502-5303. Telephone: (800) 800-9647. Web site: www.orbenchmarks.com.
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