PHLO

The Unintended Consequences of a Focus on Productivity

 

"Productivity" is one of those concepts hospitals have borrowed from manufacturing because it works so well in that environment. But in hospitals, productivity presents a paradox. Most practitioners in hospitals don't understand the principles behind productivity. As a result, their efforts to be "productive" will likely adversely affect critical elements of the patient experience and potentially the hospital's financial health.

The problem is that productivity is a relative measure that, when used as a sole indicator, can be very misleading. The number of dollars expended per hour for a specific activity, for example, is a productivity measure. These relative measures are designed to give managers and leaders a tool to help guide analysis and exploration. They help navigate and provide perspective. But, allowing productivity to be a primary analysis tool and decision making driver can bring about an undesirable result.

In the interest of full disclosure, I am a manufacturing engineer by training and I think some of my brethren own some of this mess. The patient-to-nurse ratio, the most famous productivity measure, is a perfect example. The med/surg ratio in many hospitals is 6:1. As relative measures go, this makes some sense – for establishing budgets. But it is a poor tactical management tool.

Productivity measurements like this one are insufficient when used to drive daily performance. Armed with the staffing ratio, hospital managers make day-to-day and even shift-to-shift decisions. It happens every day in capacity-constrained hospitals where managers are armed with only experience and a productivity measure. They take steps in the interest of meeting a target, but the following scenario will demonstrate how negative these decisions can be – all in the name of productivity.

At 9 a.m. a nursing manager with a 5:1 ratio has six nurses on shift, but only 25 patients. So, she decides to send one of the nurses home or to another unit. Assuming the fully loaded cost of a nurse is $75/hour, this manager has just "saved" her unit $75 for each hour of the nurse's 10-hour shift, or $750. Since that "productivity decision" is usually not made with the discharge requirements in mind, the decision to reduce staff can result in poor patient flow, highlighted by bed constraints, excessive delays in the ED and PACU (potentially impacting quality), or even ambulance diversions (which translates to lost revenue).

The $750 saved slows the patient flow and eventually costs the hospital somewhere in the low five figures of lost revenue for that day. Worse, the attendant long-term effect of the loss of confidence among doctors and the community could easily translate into losses in the millions over the course of a year. Beyond that, the lack of consistency in schedules is often a quality-of-life issue that leads to chronic problems with staffing and retention.

So the unintended consequence of saving that $750 by managing to productivity measurements alone is multiplied on numerous fronts, all negative and much more costly. Be on guard against managing your hospital's operational effectiveness with only a productivity ratio. No one wants his physician to base a diagnosis and treatment plan solely on blood pressure measurements. The same goes for hospitals and one-dimensional approaches to effectiveness.

Contributing to this work is Kenneth P. Staresinic

 

The worst thing to do in a capacity constrained hospital

Hospitals are complex logistical systems. Beware seemingly easy fixes to pervasive problems.

For example, CEOs at the helms of seriously crowded emergency departments constantly receive internal proposals for adding resources. Whether it's for a new building or more staff, a moment of pause is in order before approving such additions. In fact, it's important to recognize that adding resources could unintentionally aggravate an already troublesome situation.

Recently, I met with an executive who was struggling with patient throughput. The problem stemmed from an inability to discharge patients in a timely fashion. When the executive dug into the problem, she discovered that the vast majority of discharges where occurring at shift change (a common problem all over the country).

After a great deal of discussion and brainstorming, the idea of hiring a dedicated discharge nurse surfaced. This was considered a winning proposition for everyone on the unit because:

1. Nurses would be freed from a paper-intensive process to maximize the time they spend providing patient care;
2. Bed management could rely on a person who was accountable for ensuring that the beds where cleared as soon as possible;
3. Nurse management had a more consistent process for moving patients out;
4. Case management got a resource to help coordinate and plan their activities; and
5. Administration would solve one of the biggest challenges facing patient throughput, which would logically lead to even greater throughput.

A discharge nurse was identified and placed in the high-volume 35-bed med/surg unit. But, to everyone's consternation, the average discharge time moved to even LATER in the day. Why?

Previously, this unit averaged seven to ten discharges every day. With a 6:1 patient-to-nurse ratio across a 24-hour period, this meant that each nurse would be accountable for one or two discharges per day…and these discharges most often occurred between approximately 10 a.m. and 8 p.m. In this scenario, many people processed discharges, each independent of the others. Each had her own path to discharge, as illustrated in the chart. Thus, if there were a delay or a problem with Patient B, then Nurse B would have to deal with it. None of the other nurses or patients were impacted.

When the discharge nurse arrived, she was saddled with all seven discharges, and, in theory, she had the capacity to discharge all the patients in a timely manner. What wasn't considered was the fact that all the discharges immediately became interdependent. As such, any delay with any patient would automatically impact the rest of the patients.

This is just one example of how a seemingly good solution can actually create a worse problem. Take time to carefully consider the broad ramifications of changes to the hospital environment.

Why is 85% occupancy considered “full” in most hospitals?

I recently had a long debate with an executive of a successful healthcare system, one with a national reputation.

We were discussing the need for more monitored beds to support a chest pain clinic. Our simulation analysis indicated that the typical utilization of the beds would likely range from 77-90%. When receiving this news, the executive became alarmed. He wanted to delay the introduction of the chest pain clinic and work instead on adding more beds.

Why? He considered his hospital to be full when it reaches 85% occupancy. It is a figure that I have come to find is a general 'rule of thumb' throughout the industry. The thinking is that you need 15% open capacity to effectively manage the patient flow.

That is crazy! Hospitals are not full at 85%, they have 15% of their capacity available. In a 300 bed hospital that is 45 beds. 45 beds in a world where then average length of stay is 5 days, is enough capacity to care for 3240 more patients per year. Assuming that 20% of the patients coming through the ED are admitted, that is enough capacity for 16,000 ED patients. That's a lot of care.

From a business perspective it is also crazy. Take an average of $6,000 cash collected per inpatient stay, and about $1,000 cash collected for an ED patient: this hospital executive is leaving approximately $35,000,000 in revenue on the table!

Our hospitals are overflowing with patients needing care. Our healthcare system is bankrupting our companies. It is time to drop this conventional wisdom. Isn't it time instead to get very smart on how to effectively manage capacity. When 100% of the beds are occupied, your hospital is full.

Five ways to quickly achieve better ED throughput

Overcrowded emergency departments (EDs) continue to plague the nation's hospitals and the cost of poor service resulting from excessive delays can run into millions. The ED is the main entry point into these hundred million- or even billion-dollar enterprises, so improving access is critical to success. Any attempts to ease ED overcrowding, reduce treatment delays and improve patient throughput can radically reinvigorate a hospital's bottom line and create a healthier environment for all concerned, including patients, staff, physicians and insurance companies.

Hospitals cite numerous reasons for ED traffic jams, among them:

staff shortages; inpatient bed deficits; uninsured patient use of ED for routine medical care; ED capacity constraints; slow lab/radiology turnaround; patient dumping.

These are all legitimate and real, but there are more fundamental reasons for overcrowding. Most of these are more manageable than hospital executives or staff believe and often rapid improvement can be made with relatively low cost adjustments to management or practices. Even better, these changes can lead to not just improved efficiency, but higher quality patient care and tremendous return on investment.

1. Actively manage demand surges. The typical ED lacks a management system for handling fluctuating demand. The very fact that so many hospitals have newly formed plans for handling catastrophic events like terrorist attacks is testimony to the ED's inherent inability to manage fluctuating demand. These plans reveal the kinds of management processes and thinking that can alleviate every-day demand surges.

 

Demand for ED services is, by nature, unpredictable, which makes planning for surges and quiet times problematic. At any moment in time, resources can be either overwhelmed or under-used. So, the trick here is to even out resource use. It sounds like a simple concept, but the ED culture is based on the need to respond quickly to crises, so, when the ED is quiet, there is less need for urgency and the staff tends to be more relaxed about completing tasks. Because the pace of ED operation is based on what exists rather than anticipating what might be, tasks that could be done in preparation for demand surges are put aside until they become absolutely necessary – which is most often during demand surges, when no one has time to do them.

 

Part of this management issue is based on ill-founded financial control efforts that focus on productivity. Scheduling schemes that require rolling off personnel during quiet times depletes staff that could be preparing for the next surge. This is a penny-wise and pound-foolish management approach, because saving the $50 an hour rolling off an ED nurse for four hours may ultimately cost the hospital thousands in lost revenue when patients are forced to go elsewhere for care because of access restrictions or excessive delays.

 

2. Reduce data overload and improve information under-load. The health care industry tends to focus far too intently on clinical data and far too little on operational data. It lags behind other industries in using information technology for operational execution.

 

Too often when hospitals do try to invest in this technology, they go to extremes, with data requirements for supporting every imaginable scenario or circumstance, demanding 'just in case' rather than real pragmatic requirements. The result is huge, complex and very expensive systems that are tough to manage and almost impossible to change. These become tools that, in trying to be all things to everybody, seldom deliver value to anyone.

The fact of the matter is, only a little information is necessary to keep things moving in the ED. The key is to provide the ED staff with the data needed to anticipate and act, rather than simply react, allowing them to prioritize activities and move patients through the ED to the next level of treatment or to discharge. Hospitals need to focus on getting the right information to the right person at the right time and under the right conditions.

Focusing on the basic data is what makes information technology an effective tool for the ED. Doing so reduces the need for staff to assimilate and sort extraneous data, saving time and money, and, at the same time, speeding up patient throughput.

 

3. Build trust in the information.

 

ED data problems are complicated by the hospital culture. Without transparency and integrity in the data, trust is lost among those who most need it for decision-making.

Clean, objective evidence is the real basis for change and true data-driven improvement. Unfortunately, when the data is suspect, it is easily dismissed as inaccurate. From there the decision-making moves away from the key issues and toward perception, experience, and the validity of the data. In any situation, especially one that is as complex and dynamic as in an ED, this is problematic because perception and experiences are truly individual. As such, it is not uncommon to see attempts to improve ED performance stall or get lost in a morass of opinion and infighting. The result is that the ED is labeled "resistant to change" and cynics reign over any attempt to resolve even obvious problems.

Engineering a system to produce trustworthy performance information will not only improve the chances of improvement, but can be the start of creating the culture of continuous improvement so critical to high quality health care and operations.

 

4. Recognize that special programs create unintended consequences. The best intentions can often lead to the worst unintended consequences simply because the entire hospital system was not considered in the conceptual stages of the change.

 

Many of these programs look good on paper, but are flawed from the start. They are necessarily based on such statistics as average daily volume or average length of stay. There are two big problems with this kind of analysis.

 

First, ED operations are exceptionally variable, so using averages has a great chance of resulting in poor conclusions because they oversimplify or mask reality.

 

Second, yesterday's average is based on yesterday's conditions, yesterdays' physician practice pattern, and yesterday's inpatient mix. The only thing that is certain is that these factors will be different today and tomorrow. Anyone with ED experience knows that even subtle differences in the shift, the covering physician, the triage nurse, and the like, can result in dramatically different operational performance. This dynamic is lost in the way special programs are created and deployed in the ED.

 

In addition, misdirected problem-solving, such as adding capacity, can have surprisingly negative consequences. Simply expanding the ED to ease overcrowding may not be the answer to improving throughput, when the real issue is lack of inpatient beds. The same goes for adding more radiology capacity, which might reduce the wait time for the x-ray, but does not always address the delay after the test is completed.

 

Throughput occurs only when a patient actually leaves the ED. In a typical four-hour-plus stay, there are many independent factors delaying patient flow, and these factors must be considered comprehensively. The variability in the time to get a patient triaged, in a bed, assessed, orders written, orders entered, tests completed, consults consulted, diagnosis completed, bed assigned, turnover report given, et al, combine for actual ED LOS.

There is a drastic need for systems thinking about the overall patient flow so that roadblocks to patient throughput can be quickly identified and addressed.

 

5. Align physicians and staff with the hospital's mission and strategy. Unifying physicians and staff under one working plan can alleviate many of the problems that lead to overcrowding and poor patient management. A lack of alignment creates an inefficient and chaotic environment because people operate under different rules. These are multi-tasking professionals juggling four or more patients, with more on the way at any moment in time. They tend to set priorities based on their experience or perception and the circumstances that exist in real time.

 

While it is impractical to try to control the events occurring in an ED, it is very beneficial to standardize and control the RESPONSE to these events. Establishing operational protocols for ED is a step toward optimal efficiency. Developing and implementing criteria around such issues as ambulance diversions and inpatient bed placement, and then monitoring them for deviations, can build a cohesive hospital team that will provide an objective basis for continuous improvement.