Superior operating performance is often the result of many small changes. Like compounding interest, little things add up to big overall improvements. If one thinks about rising health-care costs, it may be not one big change that is needed but myriad small changes that would ultimate result in lower costs. This point is illustrated by a profile in BusinessWeek of Providence Regional Medical Center, in Everett, Washington (Hospitals: Radical Cost Surgery, Jan 8). The overall performance at Providence is pretty remarkable:
Almost 60% of U.S. hospitals report losing 20 cents on the dollar for every elderly patient that comes through their doors. They make up the difference by charging the under-65s a far higher fee. But Providence breaks even on the elderly, even though Medicare pays about $1,000 less per enrollee in the hospital’s region than the national average. The hospital accomplishes this feat while winning a doctor’s satchel full of national awards for top-notch care, placing it among the elite 5% of all U.S. hospitals.
Two quick examples of the kinds of innovations they have come up with. First, check out these before and after pictures of a post heart-surgery patient room:
Note that not only has the patient has been rolled in but also all sorts of equipment, everything from monitors to the machine that goes bing! The logic is that moving patients between rooms is not only bad for them (it not only increases their discomfort, it increases their chance of getting an infection) but it drives up cost. Apparently, a hospital can use up half a day of staff time just moving one patient around. Hence, Providence did the following:
In 2003, Providence opened one of the few “single stay” wards in the nation. After heart surgery, cardiac patients remain in one room throughout their recovery; only the gear and staff are in motion. As the patient’s condition stabilizes, the beeping machines of intensive care are removed and physical therapy equipment is added. Testing gear is wheeled to the patient, not the other way around. Patient satisfaction with the “single stay” ward has soared, and the average length of a hospital stay has dropped by a day or more.
This is a nice example of coming up with a creative solution to a problem by rethinking the basic assumptions of the process. Patients move is pretty much the universal default so it takes some creative thinking to switch to machines moves. I suspect that BusinessWeek is sweeping some tricky details under the rug. For example, in a standard hospital it easy to know where the sickest patients are. They are always in the same set of rooms surrounded by the same set of equipment. That makes it easy to focuses nurse and staff attention. Now where the sickest people are varies from day to day and may be even shift to shift.
The second example considers what happens during surgeries (i.e. in the real operations room):
When Providence can’t find standard medical practices, it innovates. That was the case with blood transfusions. Cardiac and orthopedic surgeons realized a few years ago that there was no widely accepted data on the optimal amount of blood to give patients during surgery, despite the $240 cost per bag. Dr. Brevig started looking around and found several studies that correlated greater transfusion volumes with longer patient stays and higher infection rates.
He was particularly surprised that transfusion rates varied greatly from hospital to hospital, regardless of the patient’s status. “The variations were related to the culture of the hospital, not the decisions of the doctor,” he says. Brevig set out to create a low-transfusion culture at Providence. He got surgeons to slow down because speedy operations cause more blood loss. Settings were changed on heart bypass machines to save blood, and the hospital hired a blood conservation coordinator. In a study of 2,531 operations at Providence, Brevig reported that the incidence of transfusions was reduced to just 18% in 2007, from 43% in 2003, while the average patient stay was reduced by half a day. The changes have saved Providence an estimated $4.5 million.
To some extent, this example reflects what you get when you standardize processes, a long-standing challenge in health care settings. More generally, it also demonstrates the inter-related nature of processes. How much blood is needed depends on the surgeon’s speed but so does the number of procedures you can move through one OR. That is, there is potentially a trade off in throughput, quality and cost. Given that improvement in the latter two measures are reflected in their reducing the average time in the hospital, Providence and patients likely win by sacrificing a little bit of OR volume.