Medical Economics

How Does U.S. Health Care Compare To Other Countries?

Value = quality divide by price. So… does the United States have high quality and low price? Unfortunately, no. Every year, I look forward to the OECD annual health report and the newest version was released in June. The OECD is the Organization for Economic Cooperation and Development. It consists of most of the world’s industrialized countries and from it we can get a scorecard of how the United States is doing compared to other countries. For this post, I’ve chosen 5 OECD member countries to compare to the U.S. for simplicity: Canada, France, Ireland, Japan, and the U.K.; however, you can just as easily choose just about any combination of OECD and get similar results.

cost per GDPSince last year, not much has changed and by the metrics used in the report, Americans continue to have poor value in healthcare and in fact, the value that we get is among the lowest in the world. Let’s start with a look at our cost of health care as a percentage of our gross domestic product. Americans spend far more than any other country on healthcare. Currently, we spend 16.9% of our GDP on healthcare. That is 50% more than the next OECD country, Switzerland, which spends 11.5% of it’s GDP on health care. The U.S.’s cost of health care continues to keep going up: in 2000, we only spent 12.5% of our GDP on health care.

One reason why health care costs can be expensive is that there are a lot of physicians. But as it turns out, the number of physicians per capita is in line with or less than other OECD countries. The causes of the high cost is more related to suboptimal management of chronic medical conditions such as asthma, COPD, and diabetes. Americans are the most obese among the OECD countries with 29.5% of the U.S. population reporting that they are obese (the next closest is Latvia at 25.7%). With obesity comes additional health costs. We also do a lot of testing. Only Estonia does more CT scans per capita than the U.S. and only Turkey does more MRIs per capita than the U.S.

Life expectancy 2Americans could still have good value if our health care quality is superior to other countries. However, by many measures, it is not. Our infant mortality rate of 6 deaths per 1,000 live births is the third highest of all reporting OECD countries; only Mexico and Turkey have higher infant mortality rates. Our traffic injuries per million population is the highest of all reporting OECD countries. Our average life expectancy for both men and women is lower than the OECD average. Currently, the female life expectancy at birth in the U.S. is 81.2 years. The only OECD countries with a shorter life expectancy are Hungary, Latvia, Mexico, the Slovak Republic, and Turkey. The average life expectancy in the U.S for a male born today is 76.4 years, also one of the shortest among OECD countries.

insured population 2How does the United States compare to other countries for health insurance coverage? Well, of the 34 countries with insurance data in the OECD, the only country with a lower percentage of the population covered by either government or private insurance was Greece. Thus, the U.S. was the second worse in the OECD. Thus access to healthcare in the U.S. is lower than nearly every industrialized nation.

The OECD summarizes all of the different member countries in their “Health at a Glance 2015” documents. Their key findings were:

  • “Life expectancy in the United States is lower than in most other OECD countries for several reasons, including poorer health-related behaviors and the highly fragmented nature of the US health system.
  • The proportion of adults who smoke in the United States is among the lowest in OECD countries, but alcohol consumption is rising and obesity rate is the highest.  
  • The quality of acute care in hospital in the United States is excellent, but the US health system is not performing very well in avoiding hospital admissions for people with chronic diseases.”

If you were to design an effective and efficient health care system from scratch, no one would design a system anything like what we have in the U.S. today, regardless of one’s political party affiliation. There are some great things about American health including the quality of our hospitals and our healthcare professionals. For a hospital medical director, it is up to us to maintain the high quality of acute care medicine and work to improve the quality of health of patients before and after they come into our hospitals. For every American, finding ways to reduce the cost of our healthcare is imperative if we are to remain competitive in world economic markets. It is up to us to decide how we catch up to the rest of the world while preserving those aspects of health care that we presently do better than anyone else.

August 9, 2016

Medical Economics

Do You Need A Medical Rock Star?

Rock StarRecruiting famous physicians

In hospital administrative circles, we have a word them, the Medical Rock Stars. They are the high-profile physicians that bring fame and notoriety. They’re the ones that the newspapers and television news reporters always seem to quote. They’re the ones that when you introduce yourself at a cocktail party, you get the question “So you work at that hospital, the one that Dr. Rock Star works at?”. They’re bigger than life and they bring excitement and vibrancy to your hospital. Hospitals value them and will spend a lot of money to recruit them.

But are they worth it? The answer is… sometimes. In order to decide whether or not to go after a medical rock star for your hospital, you have to have the right expectations.

What audience will they be playing to? Rock ‘n roll stars don’t get famous by playing every night in the local club. They get famous by traveling around the country playing in coliseums and stadiums and they are on the road a lot. The medical rock star is similar; they spend a lot of time being visiting professors at other hospitals and a lot of time making presentations at national and international meetings. They are not going to be at your hospital 5 days a week, 48 weeks a year.

What requests will you have to honor? Rock ‘n roll stars are notorious for making unusual demands to their concert venues. The band Van Halen famously required a bowl of M&M’s with all of the brown ones removed in their dressing room. Celine Dion requires her dressing room be precisely 73.4 degrees F. Paul McCartney once required 19 leafy six-foot plants and 4 leafy four-foot plants in his dressing room. Medical rock stars’ needs are usually not quite so bizarre but be prepared to hear about the need for unusual specialized medical equipment, office furniture, and support staff. The expense of a medical rock star doesn’t stop with salary.

What is your balance between rock stars and non-rock stars? In the music industry, some of the best musicians in the business are the studio musicians. They play day after day, they’re consistently good, but they don’t have the charisma or stage presence to be a rock ‘n roll star. It is the same at hospitals. You will need a core group of reliable clinicians who are great doctors but are never going to be famous. The sad reality of academic medicine is that in a university, you don’t get tenure or get promoted for being the best teacher or the best medical practitioner, you get promoted for writing papers about teaching and giving presentations at national meetings about the practice of medicine. Many of the best clinicians and clinical educators that I have ever known retired after 30 or 40 years of academic practice as assistant professors (the entry level academic rank) without ever being promoted up the academic ranks. But these physicians form the foundation of medical care at our hospitals: they take care of patients day after day and week after week, they are reliable, they practice high quality medicine, and they often make great clinical teachers.

How long will you be able to keep your rock star? The thing about medical rock stars is that every hospital wants them. From the first day on the job at your hospital, they are already being recruited by other hospitals. Part of their job as a medical rock star is to travel the country giving grand rounds and lectures. When they are traveling, they are frequently being offered jobs at the very same places that they are traveling to. On the other hand, the non-famous primary care physician working in your hospital’s outpatient clinic has his or her patient schedule booked solid for the next 6 months and can’t even leave the city on a weekday to go on a job interview. You will rarely keep the medical rock star at your hospital their entire career but you need to make the most of the time that you have them and not be surprised when they submit their resignation after 5 years at your hospital to take a position elsewhere.

So, do you need a medical rock star? The answer is… maybe. Your hospital will be brighter for the light that shines off of them but that light can be fleeting. Cherish the time that you have them but don’t expect them to stay around forever

August 8, 2016

Life In The Hospital

The Yin And Yang Of Yelling At Doctors

Yin_yang.svgAs a medical director (or any kind of leader or supervisor), it is your responsibility to call out physicians who are behaving badly. It is one of the things that medical directors like least about their jobs but if you don’t do it, then you become an enabler of bad behavior.

There are two ways to yell at a physician. First, it can be done at the spur of the moment when you see something, hear something, or someone tells you something that a physician did that breaks a policy, deviates from normal civil behavior, or violates international law. The advantage of this method is that you can invoke discipline as close to the time that the behavior was performed, kind of like yelling at your dog if you catch it peeing on the carpet. The disadvantage is that your temper is usually up pretty high and this can result in your emotional intelligence quotient falling by a couple of branches on the human evolutionary tree to about the level of Australopithecus. This method is highly reflexive and although it can get you the results you need, there can sometimes be significant collateral damage.

One of my former chairmen was a great guy but when he’d get angry, there were these two veins on his forehead just above his nose that would stick out. We all knew that if you were walking down the hall and you saw those two veins walking toward you that you should put your head down, look at your feet, and hurry past as fast as possible, hoping that you were not the subject of the excessive cutaneous venous engorgement.

The second way to yell at a physician is the planned ambush.  This requires forethought and careful rehearsal of what you are going to say. The advantage is that your temper has usually cooled and your emotional intelligence quotient is back in the usual Homo sapiens range. The disadvantage is that the longer you wait after the bad behavior, the less effective your yelling will be, a lot like yelling at your dog on Thursday for peeing on the carpet on the previous Monday.

Regardless of which method of yelling you do, yelling at a physician will suck the joy out of your day so it is important to have emotional balance. That is where the yin and yang comes in. Whenever you yell at a physician, you have to find someone else to pay a compliment of equal intensity to. If you are standing at a nursing station and hear a physician loudly complaining about the quality of the donuts in the physician lounge and have to tell him or her to knock it off, then you have to go find another physician to thank for coming into the hospital in the middle of the night to operate on the patient with a perforated bowel. There are a lot of ways to pay compliments and in order of effectiveness:

  1. A text to their phone
  2. An email
  3. A phone call
  4. Seeking them out and telling them in person
  5. A hand-written note
  6. A hand-written note with flowers
  7. A hand-written note with use of the medical director’s prime parking spot for a week

Disciplining a physician is almost always going to leave you feeling bad. So it is important to find something to make you feel good to maintain your personal psychic symmetry. Furthermore, if everyone knows you for your responses to physician badness, they will never know you for promoting physician goodness.

August 6, 2016

Operating Room

How Climate Change Affects The Operating Room

The climate scientists were all wrong when projecting future increases in the Earth’s temperature… it is happening much faster than they thought it would. These hotter temperatures turn out to have a big impact on hospital’s operating rooms. June 2016 was the 14th straight month that broke the monthly record for the hottest of those months on Earth ever recorded by NOAA. The average land temperature on Earth during June 2016 was 2.23° F higher than the 20th century average for June. In Central Ohio, not only are the temperatures higher this summer, but so is the humidity.

No matter what the outside weather, the inside of an operating room has to be in constant climate of 68-74° F and 30-60% humidity with up to 25 room changes of air per hour (that is a lot more room changes than your home central air conditioner has to do). Air handler units built into hospitals in the northern United States in the 1960’s and 1970’s were not built for the high temperatures and humidity that we are now experiencing. To understand why this is a problem, I had to take a crash course in HVAC systems from our director of facilities.

For air to get from the outside atmosphere into the operating room, it has to go through several steps. First, air is drawn into the HVAC system from intake vents. The air then passes through a heating coil (turned on in the winter) and a cooling coil (turned on in the summer). The cooling coil circulates a cooled liquid, in our hospital’s case, it is cooled water that comes from a refrigeration unit in our boiler room. The air then goes through a filter so that it is 99.997% pure. Next come additional heating and cooling coils to get the air to the proper temperature for any given location in the hospital.

If the room is too hot, then surgeons with gowns on and patients with drapes on can get overheated. Humidity comes into play also because if the humidity gets high, then the air will seem several degrees hotter even if the temperature doesn’t change (this is the difference between the actual temperature and the “heat index”).

In order to maintain constant temperature and humidity, it can require a lot of frequent adjustment in air handler controls. Recently, the temperatures and humidity in Columbus were really off the charts for long periods of time and we started seeing our operating rooms’ temperature and humidity rise excessively.

So here is what we had to do. The first cooling coils were set to 42° F. The air doesn’t get that cold but this does maximally reduce the humidity (i.e., dries the air out). The air gets down to about 56° F. Although that is plenty cold for operating room air, the air was still too humid so we next heat the air up to 68° F with the secondary heating coils in order to further reduce the humidity. So, in order to get it right, we had to supercool the air then warm it back up to get the humidity down.

This works OK for now but if  we continue to have heat record breaking months in the next few years, then hospitals in areas of the country where constant high heat and high humidity were not previously a problem are going to have to invest in expensive new HVAC systems in order to maintain the tightly controlled climates that our operating rooms require.

August 5, 2016

Emergency Department

Psychiatric Surge

No matter what your political leanings, one thing we can all agree on is that the United States does not have enough inpatient psychiatric beds. De-institutionization of patients with psychiatric disease in the 1970’s has overall been a good thing for most patients with psychiatric disease but the consequence is that there are many patients living in the community with inadequate mental health resources. That coupled with changes in reimbursement for psychiatric disease has resulted in more patients needing acute psychiatric care than can be accommodated in existing psychiatric hospitals. Between 2009 and 2016, Franklin County (the county that Columbus is in) saw a 157% increase in the number of patients presenting to the emergency departments in the county’s hospitals that needed inpatient psychiatric care.

As a result, psychiatric patients with no place to go fill up emergency room beds. A recent study from Wake Forrest University determined that psychiatric patients wait 3.2 times longer in the emergency room for admission compared to non-psychiatric patients (1,089 minutes versus 340 minutes). As mentioned in a previous blog post, room turnover rates are a key metric in emergency department efficiency and this increase in ED length of stay by the psychiatric “boarders” resulted in a loss of 2.2 room turnovers which equates to a loss of $2,264 to the hospital per psychiatric patient.

At our medical center, Assistant Professor of Psychiatry, Dr. Natalie Lester has a real passion for acute care psychiatry in the emergency department and she has turned that passion into some very tangible improvements in throughput of patients with psychiatric disease in our hospital’s emergency department. In 2013, telepsychiatry was introduced in the ED resulting in a drop in ED arrival time to psychiatric consultation from 14.9 hours to 7.7 hours! This translated to a drop in total ED length of stay from 25.6 hours to 21.8 hours.

In 2014, the Department of Psychiatry opened an 8-bed psychiatric observation unit at our medical center in close proximity to the University Hospital ED (on campus – about 8 miles from our hospital, University Hospital East). That resulted in a temporary reduction of ED psychiatric length of stay by one-third. Since then, however, the length of stay has gone up as the increasing demand for inpatient psychiatric care continues to outstrip supply.

In Central Ohio, there have been new psychiatric hospitals built but they limit their admissions to patients with commercial insurance with the result that there have been essentially no new beds available for patients with Medicaid. This is an enormous problem at our hospital because 65% of our emergency department’s psychiatric patients have Medicaid but only about 13% have commercial insurance. Furthermore, most free-standing psychiatric hospitals do not have the resources to manage patients with concurrent complex medical illness and those that require electroconvulsive therapy, etc.

Dr. Lester found that currently, 10% of the total number of patient care hours in our emergency department was spent managing patients with psychiatric disease. At the current rate of increase of emergency department utilization, by 2019, she projects that 22% of all emergency department hours will be used for care of psychiatric patients. We define the emergency department as being on “psych surg” if > 15% of the ED beds are occupied by psychiatric patients. Between the 2 emergency departments at our medical center, 56% of the hours of the year, one of the EDs is on psych surg. Clearly this is not sustainable nor is our situation unique compared to most other hospitals in the United States. So what can a hospital medical director do?

  1. Advocate for a move away from a traditional model of the ED consulting psychiatry and then admitting for treatment to a model where treatment is started in the ED in order to possibly avoid admission altogether. Larger hospitals should consider creating psychiatric observation units that can specialize in this type of care.
  2. Advocate for our communities to expand the number of inpatient psychiatric hospital beds.
  3. Change reimbursement for inpatient (and outpatient) psychiatric care to expand availability of services.
  4. Consider creation of psychiatric emergency departments in larger communities that can serve as a destination for emergency squads, police-delivered patients, as well as walk-ins thus off-loading regular emergency rooms to focus on medical/surgical problems.
  5. Adopt telepsychiatry programs, especially in smaller hospitals that do not have full-time on-site psychiatry services.

These are very real problems and very real costs that all hospitals and all communities face. We must start planning now for the increase in psychiatric emergency care that is anticipated to affect all of us in the near future.

August 3, 2016

Medical Economics Medical Malpractice

The Geography Of Malpractice

There are a lot of variables that go into the cost of medical malpractice premiums. One variable that is often overlooked is geography. The cost of premiums can vary tremendously from one part of the country to another and can even vary from one part of a state to another. For hospital medical directors seeking to recruit physicians, it is important to be aware of these differences since it will impact your hospital’s competitiveness for recruitment.

75% of physicians in low risk specialties and 99% of physicians in high risk specialties are named in a malpractice case by age 65. Even though most cases never go to trial and those that do go to trial are more often won by the defense, malpractice is very expensive with an estimate that the overall cost of $31/American per year and if the cost of defensive medicine is factored in, it is $174/American per year. In obstetrics alone, 1 out of every 3,711 births results in a malpractice claim resulting in the cost per delivery just to cover malpractice liability being $296.

Let’s take a look at the spectrum of annual costs for malpractice premiums across the United States:



Even within a state, there can be huge differences in premiums. In Ohio, for example, malpractice premiums are significantly higher in Northeastern Ohio (Cleveland area) than in Central Ohio (Columbus area):

malpractice 2

So why the differences? Different states have different tort laws making it easier or harder for malpractice lawsuits to be filed. There are also state-specific monetary limits on damages that can vary considerably. As a general rule, states that have passed tort reform laws have fewer malpractice claims filed and lower overall pay-outs to the plaintiffs. Primarily for this reason, malpractice claims have been dropping over the past 20 years.

The penetration of hospital employment models also affects the vulnerability of physicians to malpractice suits and the overall cost of a given malpractice case. For example, in a community where physicians are mostly in private practices, if several physicians plus the hospital are all named in a suit, then each has to have their own attorney and expert witnesses, increasing the overall cost to defend the suit. Additionally, there can be finger pointing among the different physician named which makes the plaintiff attorney’s job easier. Where most physicians are hospital-employed, the physicians and hospital can mount a common defense and there is no finger-pointing.

In some states, certain physicians can claim “immunity” and thus not be personally named in a suit. This primarily happens with government-employed physicians, including those of us employed through the Ohio State University. In this case, the hospital is named but the individual physicians may not be. Additionally, in Ohio (for example), there are two court systems that hear malpractice cases: the Court of Common Pleas (cases decided by jury) and the Court of Claims (cases decided by a judge without a jury). Malpractice cases involving teaching physicians and government-employed physicians go to the Court of Claims where large payouts based on emotionally sensitive juries are avoided. In states without these provisions, malpractice cases are more common and more expensive.

Lastly, there can be regional cultural differences in patients’ willingness to sue physicians and in the community’s (and thus the juries’) likelihood of deciding in favor of the plaintiff. This plays out in Ohio where 50% of all malpractice cases in the state arise from the Cleveland area and as a consequence, malpractice premiums are higher there.

The regional variation in malpractice does result in regional variation in medical costs to the consumer. For example, let’s look at the difference in obstetrics in Long Island, NY versus Central California. The table below is what Medicare pays for obstetric services in the two regions; most commercial insurance companies will base their reimbursement for obstetric care off of what Medicare will pay. Obstetric costs are considerably higher in Long Island than in California (in keeping with the differences in malpractice premiums as mentioned earlier).

malpractice 3

However, since the cost of malpractice premiums is nearly $200,000 more per year in Long Island, an obstetrician in Long Island would have to do 400 more deliveries per year than an obstetrician in California and that is just not humanly possible.

So if your hospital is looking to hire a physician, know what your state-specific and region-specific malpractice insurance will cost that physician because it will affect how that physician will look at a job at your hospital. To hear more about medical malpractice, check out our OSU MedNet webcast on malpractice.

August 2, 2016

Medical Economics Physician Finances

What Is The Return On Investment For Residency?

Let me preface this post by saying that my advice to any medical student when choosing a specialty is to follow their passion and not the dollars. That having been said, money ultimately does make a difference. So what is the return on investment per year of residency?

Let’s start with medical student debt. No matter how altruistic a medical student is on day one of medical school, by the end of the fourth year, debt pressures can significantly influence career choices. The Association of American Colleges estimates that the average medical student debt is $172,751 for students graduating from public medical schools and $193,483 for graduates of private medical schools. With the median first year resident salary being about $52,000 with an increase of about $2,000 per year for subsequent residency years, physicians starting their careers following residency can face a huge debt burden. Many student loans will require relatively small monthly payments during residency but as soon as residency is completed, the monthly payments can skyrocket to as much as a mortgage payment.

Most physicians would assume that the longer the duration of residency, the higher the salary a physician makes after completion of residency and it turns out that this is generally correct. Pediatrics and family medicine with only 3 years of residency are usually the lowest paying specialties. Surgical specialties requiring 6 or 7 years of residency after medical school have the highest salaries for physicians. But those additional years of residency mean that the physician will either need to retire at an older age to make up for the lost earning years from the longer residency or they will have a shorter career duration for lifetime earnings.

A different way of looking at residency choices is the salary return on investment based on the number of years of residency. In other words, the best return on investment would be a specialty that has the highest salary per year of required residency training. Sure, there are a lot of potential criticisms of this method of analyzing the economics of post-graduate medical training but it is interesting, nevertheless.

The first challenge in this analysis is to pick a physician compensation report. There are reports put out by the MGMA, the AAMC, Medscape, Merritt Hawkins, and the AMGA, just to name a few. The data from each one is a little different. For example, the MGMA report mainly samples large physician group practices whereas the AAMC report is for academic physicians. Th AMGA is comprised of medical group practices and health systems. The Medscape report relies on self-reported individual physician surveys and may be subject to reporter bias. Reports based on first year salaries can be affected by relatively small numbers of physicians sampled. The bottom line is that there is no perfect compensation survey that fits all physicians. The Medscape Physician Compensation Report 2015 is based on surveys submitted by 19,657 physicians between December 2014 – March 2015 and is freely available on the internet. The American Medical Group Association (AMGA) is an organization for medical group practices and has 125,000 physician members. The AMGA Compensation Report 2015 is based on surveys received to member medical groups and health systems. The Merritt Hawkins Physician Compensation report is based on hospital and group practice offers to newly recruited physicians and primarily reflects entry-level salaries.

In the table in the PDF link below, the average compensation reported by Medscape is listed along with the number of years of residency for each specialty. I have counted years of fellowship as years of residency for simplicity. By dividing the average salary by the number of years of residency, you can come up with the average salary per year of residency training. If you think of think of residency as a career investment, then this number gives you an idea of the return on your residency time investment. Some of these numbers have to be viewed with caution, however. For example, unlike the MGMA and AAMC reports, Medscape lumps all cardiologists into a single category of cardiology so this may include not only general cardiologists but also interventional and electrophysiology cardiologists who have longer fellowships and make a higher salary. There is no separate category for outpatient general internal medicine and hospitalist medicine in the Medscape survey so presumably the category of “internal medicine” includes both even though they have very different salaries.

Medscape Physician Compensation Analysis

The AMGA physician compensation report gives fairly similar results as Medscape but does give results for some specialties not included in the Medscape survey:

AMGA Physician Compensation Analysis

The Merritt Hawkins report shows slightly different results, mainly what to expect in the first year after residency. It has a smaller “n-value” for each specialty so this may affect its accuracy compared to other reports:

Merritt Hawkins Physician Compensation Analysis

The MGMA report is for starting salaries in the first year post-residency in larger medical groups. Like the Merritt Hawkins survey, the results for any given specialty represent a small number of physicians and my not be as reflective of true numbers as other reports:

MGMA Physician Compensation Analysis

If you combine these three reports, the three highest return on investment specialties for all 4 surveys are emergency medicine, dermatology, and orthopedic surgery. Anesthesiology makes the highest return on investment list in 3 of the surveys and neurosurgery makes the list on 1 survey (however neurosurgery was only included as a specialty in two of the four surveys).

The lowest return on investment depends on the survey. For the Medscape, AMGA, and MGMA surveys that survey all practitioners, the two consistently lowest return on investment specialties are endocrinology and infectious disease. Pulmonary/critical care medicine and rheumatology make two of the surveys’ lowest return on investment list. Allergy and nephrology each made the bottom list in one of the surveys.

However, in the Merritt Hawkins survey, the four specialties giving the lowest return on investment are non-invasive cardiology, radiology, psychiatry, and hematology/oncology. Although this could just be a result of small numbers of physicians sampled in the Merritt Hawkins survey as opposed to the other surveys, it is also possible that these four specialities are becoming saturated with a supply of physicians beginning to exceed the supply.

No one would advise a medical student to choose a specialty purely based on this analysis. The good news is that all physicians make a high income relative to other professions and so the decision should be more about what you enjoy doing rather about a pure financial return on investment. There are also quality of life issues to consider, for example, an emergency medicine physician has to be willing to work a lot of evening and night shifts since that is when emergency rooms get busy.

In an ideal free market world, physician salary would be dictated by the supply and demand for any given specialty but the market for physicians is not a free market system since income is tied to reimbursement and the reimbursement for any given service or procedure is determined by Medicare and commercial insurance companies.

For myself, I started off my career as a pulmonary and critical care physician, one of the specialties with the lowest return on investment. Even if I had read this blog post 30 years ago, I still would have gone into pulmonary/critical care since that is where my passion lies.

August 1, 2016

Operating Room

Does Your Operating Room Operate Efficiently?

A hospital’s operating room powers the hospital’s financial margin. But for the OR to be truly effective, it has to be efficient. In order to be efficient, you have to know what data to analyze and how to interpret that data. For this post, I want to focus on 2 metrics: (1) first case start times and (2) operating room turn over times.

At our hospital, we are very fortunate to have an outstanding Medical Director of Perioperative Services who understands efficiency and works well to build consensus among the surgeons, anesthesiologists and OR staff to create an efficient environment with a focus on optimizing the patient’s experience. One of the first areas he addressed was whether the first cases of the day started at the time that they were scheduled to start. The operating room schedule is just like an outpatient office schedule: if you start the first patient 30 minutes late, you are going to be late by 30 minutes for all of the rest of the patients for that day and then you are going to have to pay your staff overtime for 30 minutes when they finally finish up their day 30 minutes later than anticipated. In order to start on time, several things are required:

  1. The room has to be ready for the patient
  2. The patient has to be ready for the room
  3. The OR staff have to be in the room
  4. The anesthesiologist has to be in the room
  5. The surgeon has to be in the room.

If any one of these are not in place at the time of the first scheduled case, then everyone gets delayed for the rest of the day. If your operating room first cases are not starting on time, the next step is to drill down to determine which of these 5 variables is the culprit and then take steps to rectify the situation

Room turn over time is more complex. At our medical center, The Medical Director of Ambulatory Surgery, Associate Professor of Anesthesiology Dr. Mike Guertin, has done a very detailed analysis of room turn over and I’ll credit him with my understanding of room turn over.

The number of minutes it takes to turn an operating room over can vary depending on the surgical case. For example, surgeries that use a basic surgical instrument set and minimum number of OR staff (for example, cataract removal) can have short room turn-overs, say, 20 minutes. On the other hand, a surgery that uses a large number of specialized instrument sets plus a larger number OR staff (for example, hip replacements) will need a longer time to turn the room over, say 40 minutes. For a wide spectrum of different types of surgeries, a good average to shoot for is 80% of the room turnovers taking less than 30 minutes.

There are 4 key parts of an operating room turnover:

  1. The time from incision closure to the first patient leaving the room
  2. The time from when the first patient leaves the room until the room is ready for the second patient
  3. The time from when the room is ready until the second patient is ready in that room
  4. The time that the second patient is ready in the room until the the incision is made

Although on the surface, this sounds simple, in reality this is a supremely complex human behavioral engineering challenge. Here are some ways to address the common causes of delay in room turnover:

Standardize work flows. The staff should not have to be called to do routine parts of the room turnover, they should do it automatically. For example, cleaning the floor of the room in between cases should be hard-wired into the staffing and it should not require the OR charge nurse to page housekeeping.

Improve communication. The fewer phone calls and pages that the staff have to make, the fewer minutes it takes to turn the room over. The solution may be different for different hospitals and could involve an overhead paging system, an auto-page triggered electronically to staff pagers or cellphones, patient flow monitor screens placed throughout the OR area, or microphone headsets for use by the staff.

Optimize pre-admission evaluation processes. Dr. Guertin found that in nearly half of cases, patients are not ready to go back to the operating room when the operating room is ready for them. More effective pre-admission evaluation and testing was able to have patients better prepared for surgery and have all of the proper documentation in order with fewer “unexpected surprises” on the day of surgery in our ambulatory surgery center. Not only does this improve patient flow and reduce day-of-surgery cancellations but it also significantly improves patient satisfaction. Outpatient pre-admission testing programs that use healthcare professionals at the top of their license capabilities (office assistants, medical assistants, RNs, CNPs/PAs, and physicians) can improve throughput of patients later when at the arrive to the hospital for their surgery.

Avoid a culture of defeat. Improving operating room efficiency can seem like an insurmountable task for the OR staff, physicians, and hospital administration. By following regular report metrics on room turnover and first start times, it can be much easier to show the OR staff small incremental changes of just 1-2 minutes and this is sometimes the positive reinforcement that is needed to maintain the culture of optimization.

Operating room time is expensive, typically $18-19/minute so even shaving a few minutes off of room turn over time can result in dramatic financial rewards. Reducing room turnover time by 10-15 minutes can allow for an additional surgical case per room each day. Equally important, a maximally efficient operating room with on-time first-starts each morning and shorter room turnover time will improve the patient experience and improve patient satisfaction. In the spirit of the Ohio State University Wexner Medical Center, Dr. Guertin refers to the process as “OSUWMC2”: “Optimal Surgical Utilization With Minimal Complications & Cancellations”.

The key message is that operating room optimization starts not when the patient arrives in the hospital on the day of surgery but instead starts when the patient first decides to have a surgery. There are no losers with operating room optimization, only winners.

July 31, 2016

Inpatient Practice

Medicare’s Stars Don’t Shine Brightly

starThis week, Medicare released its new hospital rating system, The Hospital Compare Overall Hospital Quality Star Ratings. Using this system, Medicare rates hospitals by their quality using a 5 star system with 1 representing the lowest quality hospital and 5 representing the highest quality hospital. In reviewing the methodology, I believe that Medicare has failed epically.

The rating is based on 64 quality measures that Medicare tracks for all hospitals in the United States. Because not all 64 measures will apply to every hospital, Medicare only uses those applicable to a given hospital so that for any given hospital, the quality measures reviewed can be as many as 64 but as few as 9 with an average of 40 per hospital. The full listing of all of the specific quality measures can be found on the CMS website here. The 64 quality measures are grouped into 7 categories including:

  1. Mortality
  2. Safety of care
  3. Readmissions
  4. Patient experience
  5. Effectiveness of care
  6. Timeliness of care
  7. Efficient use of medical imaging

The Comprehensive Methodology Report published by Medicare details exactly how these quality measures are incorporated into the final rating. I would challenge anyone reading this blog to read the report and try to understand it. It is incomprehensible.

From the ratings, 2.2% of U.S. hospitals got a 5-star rating, 20.3% a 4-star rating, 38.5% a 3-star rating, 15.7% a 2-star rating, 2.9% a 1-star rating, and 20.4% were unrated.

So here is the problem. By using mortality measures as one of the main determinants of the rating system, hospitals that take care of sicker patients are going to be ranked lower; for example, tertiary care hospitals, those that have a high percentage of their inpatients admitted through emergency departments, and those that do higher risk procedures such as coronary artery bypass and graft surgery will be ranked lower simply because of the population of patients that they care for.

Even more concerning is the use of 8 quality measures that have to do with readmissions. It is well-established that risks for readmission to the hospital within 30 days of discharge is correlated with lower income patients, older patients, socioeconomically disadvantaged racial groups, and availability of primary care physicians in the community. Hospitals that care for these patients will have a lower ranking.

When the rankings of U.S. hospitals was released this week, there were some surprising (or maybe not so surprising) findings. Hospitals that do not manage complex patients and those that do not do high-risk procedures and surgeries fared very well and were highly ranked. Hospitals that care for the underserved and care for more medically complex patients fared poorly and were ranked very low. As an example, academic teaching hospitals were uniformly ranked low whereas non-teaching hospitals (which tend to manage less medically complicated patients) were ranked quite highly. The Ohio State University Medical Center came in at a 3-star rating which puts it among the top-performing academic medical centers in the nation but I know those other academic medical centers and they are not poor quality hospitals.

Hospital star rating Medicare

So what does this mean to a hospital that would like to have a high Medicare star ranking? Well, in the spirit of Jonathan Swift’s treatise “A Modest Proposal”, here are the steps a hospital can take to improve its Medicare ranking:

  1. Eliminate the emergency room. You must avoid sick patients from being in your hospital at all costs and since sick patients come to the emergency room, if you don’t have one, those undesirable patients will go elsewhere.
  2. Do not allow any patient > 65 years old to be admitted to your hospital. First, if the patients are not over 65, they likely won’t have Medicare so Medicare will not track them and second, patients over 65 are more likely to be sicker so you do not want them in your hospital.
  3. Do not admit anyone with an income of less than $24,250 per year. This is the Federal poverty limit for a family of 4 in the United States. Many studies have shown that patients with lower income have higher 30-day readmission rates. Therefore, make them go elsewhere.
  4. Do not admit patients who belong to socioeconomically disadvantaged races. These patients have also been shown to have higher 30-day readmission rates to the hospital. African Americans, Hispanic Americans, and Native Americans should be told to go elsewhere if your hospital wants to be ranked higher by Medicare.
  5. Stop taking trauma patients and close your trauma center if you have one.
  6. If you have an obstetric unit, only take care of wealthy women. Since one of the measures is “Elective delivery prior to 39 completed weeks gestation” and it is known that socioeconomically disadvantaged women have a higher premature birth rate, a hospital wanting to improve its Medicare ratings should not deliver disadvantaged women. Preferably, your hospital should only deliver upper class, non-smoking, caucasian women between the ages of 18-35 with a body mass index of < 30 and no diabetes, no prior history of pre-eclampsia, and no history of being physically or sexually abused. Do not permit twins or triplets to be delivered at your hospital.
  7. Fire anyone who works in your hospital who refuses to get a flu shot. “Healthcare personnel influenza vaccination” is one of the quality measures so if your nurses or doctors don’t get a vaccine, get rid of them in order to improve your rating.
  8. Get rid of all trainees such as residents, medical students, and fellows since hospitals with trainees have a substantially worse rating by Medicare’s criteria.
  9. Above all, do not ever, ever, ever admit patients with chronic pain such as patients with sickle cell anemia or chronic wounds. “Pain management” is one of the quality measures and specifically it revolves around how well pain was controlled. As an alternative, an equally effective strategy is to prescribe ad lib oxycontin to any patient who asks for it in order to improve the pain questions on the Medicare-required patient questionaires.

Obviously, this is absurd. Hospitals exist to take care of sick patients and those hospitals that care for the sickest patients and those that are the most socioeconomically disadvantaged have been unfairly penalized by the new Medicare star ranking system. At best, this system is flawed. At worst, it is discriminatory on a racial, economic, and age basis.

July 29, 2016


The Cost Of A Committee Meeting

I am on 29 committees that involve everything from our hospital, the broader medical center, our department, and the college. So, I spend a lot of time in meetings and so do a lot of other physicians. Your hospital probably has a committee for just about everything. Next time you are in a committee meeting, take a look around you and see if you can estimate the cost of the time of the people there.

We’ll start off with an assumption that the average physician makes about $270,000 and has $30,000 in benefits for a total of $300,000. Primary care physicians make a lot less, medical specialists make a bit more, and surgeons make a lot more. Now let’s assume that the average physician works 51 hours a week for 46 weeks out of the year (figuring holidays, CME, and vacation). That works out to about $130/hour

Let’s now say you are in a meeting with 10 physicians plus a few administrative personnel. The cost of that meeting in physician time alone is $1,300 per hour or $22 per minute. If you are not making a $1,300 decision, you probably shouldn’t be having that meeting. So, if the meeting was to decide how to orchestrate the department Christmas party for 50 people and you spent 15 minutes trying to decide whether to serve steak at $25/person or chicken at $22/person then you just spent $866 to make a $150 decision. You would have been better off just ordering the steak dinners and had the physicians on the committee spend an extra 15 minutes seeing one more return patient in the clinic.

This doesn’t mean that you should purge your hospital of all committee because sometimes you need physician input in order to preserve the physician’s sense of self-determination and democracy and some would argue that these are priceless. But you do have to be prudent given the high cost of meetings with physician members. For a medical director here are some considerations:

  1. Be organized. A half-hour or hour getting all of the background information and preparing for a meeting can save hundreds of dollars of physician time in a meeting.
  2. Have an agenda. Without one, your meeting can devolve into free-flowing anarchy and will expand to fill the hour with unproductive talk. An agenda gives you permission to cut off discussion before you lose control.
  3. Don’t be afraid to table an issue. If it looks like you are not going to be able to approve a motion or there is not enough information, don’t spend more time on it. This can also serve to reign in meeting participants who are being difficult by sending a signal that you are not going to waste other attendees’ time on issues that are not going anywhere.
  4. If you have a regularly scheduled meeting and you don’t have any discussion items, cancel the meeting.
  5. Schedule meetings strategically. Primary care physicians are in their offices from 8-5 so don’t schedule committee meetings at that time if you want them to attend. Hospitalists are under increasing pressure to get daily discharges out before noon so don’t schedule morning meetings for them. Surgeons and anesthesiologists often start their day at 7:00 AM and morning meetings are not good for them either. Emergency physicians who get done with their night shift at 7 AM are not going to want to come back to the hospital for a noon meeting when they are trying to sleep. Prime times for committee meetings for physicians are 7:00 AM and 5:00 PM.
  6. Use committees judiciously. If your hospital has too many committee meetings, it is hard to make decisions about anything. However, committee meetings are invaluable for building consensus for difficult decisions.
  7. Use electronic meetings judiciously. Although connecting by phone or internet can be a great way to minimize travel time for physicians in outlying practice sites, it is often too easy to become disengaged when attending a meeting by phone. It can be very tempting to put the phone on speaker mode and then do emails or charting in the electronic medical record.
  8. Committees as a defensive weapon. A medical director often has to make unpopular, no-win decisions. Sometimes, it is useful to be able to say “The committee decided that…” rather than “I decided that…”.
  9. Feed them and they will come. Serving breakfast or lunch during a meeting can allow busy physicians to make double use of an hour in the morning or at noon. But beware of huge boxed meals – too many calories will put everyone to sleep by the end of the meeting. To paraphrase Machiavelli, “It is better to serve both food and coffee but if you can only serve one, serve coffee.”
  10. Committees are immortal. It is hard to make a committee die, even after it has out-lived its use. If you have a single defined issue that needs to be addressed, create a time-limited workgroup rather than a committee.
  11. Be sure that there is a committee reporting structure. Make sure that it is clear where the committee’s findings and recommendations get reported to. For example, the Medication Safety Committee reports to the Pharmacy and Therapeutics Committee that in turn reports to the Medical Staff Administrative Committee that in turn reports to the Board of Trustees.
  12. Keep minutes. Documentation of the committee’s recommendations and findings need to be written down. Partly so that after the fact, everyone can agree on what was discussed and decided. If there is no documentation of the committee’s work, then the flames of conspiracy theorists in the hospital will be fanned with wild suspicions about what happens behind the conference room doors.
  13. Choose the committee chairman carefully. The chairman should not be the one who talks the most or makes unilateral decisions. He or she should be someone who encourages all of the members to talk and promotes consensus rather than makes unilateral decisions.

Committees are an expensive necessity in the hospital. Always be sure that the value of the committee’s work is greater than the cost of the committee meeting.

July 28, 2016