Focus on people, productivity and process results in millions in hospital savings in the UK

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From sterilization processing departments and operating rooms to emergency wards and out-patient clinics, there are opportunities for efficiencies in many areas of hospital operations – the key is to know where to look and who to engage in the process.

The biggest driver of productivity will always be people. Working with the front-line staff to identify how processes feed into outcomes is the key to success when looking to transform a system. This is the approach that demonstrated great success in the United Kingdom over the past decade with over 20 hospitals looking to cut costs while still improving service.

By focusing on people, processes and productivity, the UK health system as a whole saved over $169 million while at the same time improving quality of care. More specifically, hospitals reported the following:

–          $290,000 annual reduction in staff costs

–          $8 million saved on facility costs

–          50% capacity increase in three months for ambulatory care

–          $2.2 million annual savings from operating room utilization and schedule optimization

–          $960,000 annual savings in fixed coding inaccuracies

As Ontario’s Ministry of Health and Long-Term Care races to find savings and move towards patient-centered care, models from abroad provide important information for hospitals that are expected to generate results.

Action Plan for Health Care clearly outlines Ontario’s commitment to the transformation of its health care system. The provision of health care in the province consumes 42 cents of every dollar spent on provincial programs and the Minister of Health and Long-Term care warns in the plan that, without a change of course, health spending would eat up 70 per cent of the provincial budget within 12 years, crowding out our ability to pay for many other important priorities. The need for fast paced, thoughtful change is evident.

This transformation is happening together with the participation of hospitals. Yet beyond navigating this complex system, the biggest challenge to meeting provincial deficit reduction targets is speed of change.

In order for these efforts to be optimized, hospitals must find efficiencies in areas where there are greater opportunities to realize value directly at the bottom line. This includes examining emergency rooms, operating rooms, length-of-stay and procurement.

This means looking at the system as a whole, from the bottom up, to define the process needed to create capacity for rapid change.The following steps will help to piece together the big picture.

1.       Identify and assess processes that exist in all major areas of the hospital: Spend time in operating and emergency rooms, look at procurement processes and other areas of importance to the hospital and in all cases, measure the timing and scheduling of activities to better understand when, where and why procedures and processes are happening. Take special care to observe what is actually happening on the ground as opposed to what is supposed to be happening.

2.       Compare hospital IT data from the last six to 12 months with on the ground assessment: What does the data in the system say should actually be happening? Are there discrepancies with what was observed on-the-ground? Getting a sense of the existing disconnects between theory and reality is of huge importance when implementing new systemic change.

3.       Interview as many people as possible and listen to their perceptions of the data: After observation and analysis, it is important to circle back to the frontline staff, supervisors and management to get a sense of how issues and challenges are perceived. These insights are crucial when it comes to implementing recommended changes.

 4.       Measure and prioritize problems: Implementing systemic change should never be based on anecdotes. Use insights from human perceptions to help analyze data but always base prioritization on evidence and facts.

 5.       Provide training and facilitate buy-in from the frontline staff and supervisors who will drive the change: After prioritizing the changes that will create optimal value and improved care, circle back to train those who drive the change. Train staff on process changes and implement accountability structures to enforce the change. This is an important piece of positioning the hospital for long-term success.

Canada’s hospitals can gain a lot from looking at how a similar system has transformed its service to offer better care for patients while decreasing the cost for taxpayers. As Ontario and other provinces look to do the same, it is important that decision and policy-makers do not get sucked in to focusing on areas that may appear to make a difference but that in reality do not affect the core issues and major drivers of cost.