Hospitals across the country are aggressively pursuing cost-cutting strategies, and the high-value, high-cost environment of the operating room is a prime target for cost reduction. Applying variability methodology swings the pendulum for access to the hospital’s operating rooms from “whatever and whenever” the surgeon wants, to what is best for the hospital. Put more directly, in this model, the surgeon is asked to compromise to meet the hospital’s financial needs. The resultant tension between a surgeon and hospital administration can become intense and was certainly present during the redesign and implementation detailed in this case study. Software and information technology tools to help schedule surgical cases within the redesign goals, and reporting tools within a quantitative dashboard are essential to facilitate adoption of this program. Transparency regarding leadership decisions and frequent feedback to all providers about performance improvements should be emphasized. Change management and analytics support should be identified either internally or pursued externally before starting such a program.

1. Re-engineering the Operating Room
Using Variability Methodology to Improve
Healthcare Value
C. Daniel Smith, MD
1

2. Healthcare Delivery Goals
To provide the right care
To the right patient
At the right time
Quality *
Value =
Cost
*Outcomes, Safety, Service
In the right place
VARIABILITY IS THE ENEMY
2

3. Variability in Operating Rooms
Day-to-Day
• Peaks and valleys in day-to-day volume
of surgical cases
• “No one wants to operate on Monday or
Friday”
Within-Day
• On the day of surgery, changes to the
OR schedule and resource allocation
• Emergencies, add-ons, delays, etc.
3

4. Day-to-Day Variability
Staffing
Hospital census
Supply chain
…..

5. Within-Day Variability
U
U
E
2000
1900
1800
1700
1600
1500
1400
1300
E
E
E
E
E E
E
1000
0900
0800
0700
E E
E
E
E
E
E
E
E
1200
1100
E
E
E
E
E
E
E
E
E
E
E
101 102 103 104 105 401 402 403 404 405 406 407 408 409 410 411 412 414 415
E
E
E
E
E E
X
E
E
E
E

6. X
Within-Day Variability
E
E
E
2000
1900
E
1800
1700
1600
1500
1400
1300
E
E
E
1000
0900
0800
0700
E
E E
E E
E E
E
E
E
E
E
E
E
E
E
E
E
E
E X
E
E
E
E
E
E
E
E
101 102 103 104 105 401 402 403 404 405 406 407 408 409 410 411 412 414 415
E
E
E
E
E
E
E
E
E
E
E
1200
1100
E
U
E E
E
E
E
E E
E
E
X
E
E
E

7. Within-Day Variability
No. Room Changes
Elective Rooms on Day of Surgery
2009-2010
Safety
Patient satisfaction
Teamwork
….

8. Variability Theory in Surgery
Natural Variability
Artificial Variability
•a result of naturally
occurring processes
•uncontrollable
•a function of man made
decisions
•controllable
• Emergency or
unscheduled Operations
• Uneven scheduling of
elective cases
8

9. Elective (16)
Urgent / Emergent (3)
Scheduled
Within 48 hours
2000
1900
1800
Artificial
Variability
Natural
Variability
1700
E
1600
E E E
E
1200
E
1000
0900
0800
0700
E
E
E
1300
1100
E
E
1500
1400
U
E
E E
E
E
E
E
E
E
E
E
E
E
E
401 402 403 404 102 103 104 105 405 406 407 408 409 410 411 412 414 415
404 102 103 104 105 403 405 406 407 408 409 410 411 412 414 415
E
E
E E
E
E
E
E
E
E E
E
E
E
E

10. Case Study Setting
10

11. Mayo Clinic Florida
• 214 bed hospital (21 ORs, 28 ICUs)
and outpatient practice within a single
complex/campus – opened in 2008
• 11,900 admissions/ year: 55% surgical
• 12,000 operations/year – complex
case mix (e.g., 150 liver transplants,
1,200 NS, 900 GISurg)
• 443,500 outpatient visits annually
11

12. Baseline Data 2009
• Prime time OR utilization <65%
• 15 FTEs of overtime every pay period
• Low surgeon and staff satisfaction with OR
management and efficiencies
• Concern about absence of specialty specific teams
• Frequent disruptions of elective cases by transplants
and urgent cases

13. Proposal / Hypothesis
Applying variability theory and methodology, we could
expand the capacity of our hospital’s operating rooms
and increase surgical throughput without adding
infrastructure or expense.
13

14. Goals for Variability Management Program
Primary Goals (Endpoints)
Increased Surgical Volume (No. cases and minutes of surgery)
Decreased Overtime (non-prime time minutes of surgery)
Maintain Access for Emergency Surgery (classification compliance)
Secondary Endpoints
Predictable Elective OR Schedule (no. of same day changes to elective case
schedule)
Assure Surgeons Work with Their Primary Team (Block Utilization)
Staff Satisfaction (Staff Turnover Rate)
Financial Impact (NOI)
14

15. Elective (16)
Urgent / Emergent (3)
Scheduled
Within 48 hours
• 3 month prospective data collection
2000
1900
1800
1700
1600
1500
1400
1300
1200
1100
1000
0900
0800
0700
Artificial
• Rooms reallocated based
Natural
Variability
Variability
volumes/utilization
E
on real
E E
E
• Staff allocated to services (added
E
E
15 FTEs)E E
E
E
E
E
E
E
• Implemented November 1, 2010
E
E
E
E
E
E
• ImpactE assessed at one year
E
E
401 402 403 404 102 103 104 105 405 406 407 408 409 410 411 412 414 415
404 102 103 104 105 403 405 406 407 408 409 410 411 412 414 415
E
E
E
E E
E
E
E E
E
E
E
E
E
E
E
E

16. Operating Room Redesign
Results
16

17. Surgical Cases
Surgical Minutes
OR Utilization (19 Room Model)
Number of Overtime FTE's (average)
Staff Turnover (highest to most recent)
Daily Case Volume Variation
Daily Surgery Minutes Variation
Elective Room Changes (Average/Mon)
Elective Room Changes (%)
Pre- MVP
11,874
1,757,008
61%
7.4
20.3%
55.24
6,531
80
8%
Post-MVP % Change
12,367
4%
1,844,479
5%
64%
5%
5.4
-27%
11.5%
-43%
44.06
-20%
5,124
-22%
25
-69%
2%
-70%
Salary Dollars (Adjusted for Salary Increases)
Total
Monthly
$12,607,061
$1,045,942
$13,395,997
$1,115,646
6%
7%
$1,062
$7.18
$1,070
$7.26
0%
1%
$2.47
$1.47
$111,488
-41%
$93,929,569
$98,686,693
5%
Cost/Case
Cost/Minute of Surgery
Staff Turnover Cost (millions)
Overtime Cost Savings
Total OR Net Revenue (Fee increase adjusted)
17

18. Surgical Cases
Surgical Minutes
OR Utilization (19 Room Model)
Number of Overtime FTE's (average)
Staff Turnover (highest to most recent)
Daily Case Volume Variation
Daily Surgery Minutes Variation
Elective Room Changes (Average/Mon)
Elective Room Changes (%)
Pre- MVP
11,874
1,757,008
61%
7.4
20.3%
55.24
6,531
80
8%
Post-MVP % Change
12,367
4%
1,844,479
5%
64%
5%
5.4
-27%
11.5%
-43%
44.06
-20%
5,124
-22%
25
-69%
2%
-70%
Salary Dollars (Adjusted for Salary Increases)
Total
Monthly
$12,607,061
$1,045,942
$13,395,997
$1,115,646
6%
7%
$1,062
$7.18
$1,070
$7.26
0%
1%
$2.47
$1.47
$111,488
-41%
$93,929,569
$98,686,693
5%
Cost/Case
Cost/Minute of Surgery
Staff Turnover Cost (millions)
Overtime Cost Savings
Total OR Net Revenue (Fee increase adjusted)
18

19. Surgical Cases
Surgical Minutes
OR Utilization (19 Room Model)
Number of Overtime FTE's (average)
Staff Turnover (highest to most recent)
Daily Case Volume Variation
Daily Surgery Minutes Variation
Elective Room Changes (Average/Mon)
Elective Room Changes (%)
Pre- MVP
11,874
1,757,008
61%
7.4
20.3%
55.24
6,531
80
8%
Post-MVP % Change
12,367
4%
1,844,479
5%
64%
5%
5.4
-27%
11.5%
-43%
44.06
-20%
5,124
-22%
25
-69%
2%
-70%
Salary Dollars (Adjusted for Salary Increases)
Total
Monthly
$12,607,061
$1,045,942
$13,395,997
$1,115,646
6%
7%
$1,062
$7.18
$1,070
$7.26
0%
1%
$2.47
$1.47
$111,488
-41%
$93,929,569
$98,686,693
5%
Cost/Case
Cost/Minute of Surgery
Staff Turnover Cost (millions)
Overtime Cost Savings
Total OR Net Revenue (Fee increase adjusted)
19

20. Surgical Cases
Surgical Minutes
OR Utilization (19 Room Model)
Number of Overtime FTE's (average)
Staff Turnover (highest to most recent)
Daily Case Volume Variation
Daily Surgery Minutes Variation
Elective Room Changes (Average/Mon)
Elective Room Changes (%)
Pre- MVP
11,874
1,757,008
61%
7.4
20.3%
55.24
6,531
80
8%
Post-MVP % Change
12,367
4%
1,844,479
5%
64%
5%
5.4
-27%
11.5%
-43%
44.06
-20%
5,124
-22%
25
-69%
2%
-70%
Salary Dollars (Adjusted for Salary Increases)
Total
Monthly
$12,607,061
$1,045,942
$13,395,997
$1,115,646
6%
7%
$1,062
$7.18
$1,070
$7.26
0%
1%
$2.47
$1.47
$111,488
-41%
$93,929,569
$98,686,693
5%
Cost/Case
Cost/Minute of Surgery
Staff Turnover Cost (millions)
Overtime Cost Savings
Total OR Net Revenue (Fee increase adjusted)
20

21. Surgical Cases
Surgical Minutes
OR Utilization (19 Room Model)
Number of Overtime FTE's (average)
Staff Turnover (highest to most recent)
Daily Case Volume Variation
Daily Surgery Minutes Variation
Elective Room Changes (Average/Mon)
Elective Room Changes (%)
Pre- MVP
11,874
1,757,008
61%
7.4
20.3%
55.24
6,531
80
8%
Post-MVP % Change
12,367
4%
1,844,479
5%
64%
5%
5.4
-27%
11.5%
-43%
44.06
-20%
5,124
-22%
25
-69%
2%
-70%
Salary Dollars (Adjusted for Salary Increases)
Total
Monthly
$12,607,061
$1,045,942
$13,395,997
$1,115,646
6%
7%
$1,062
$7.18
$1,070
$7.26
0%
1%
$2.47
$1.47
$111,488
-41%
$93,929,569
$98,686,693
5%
Cost/Case
Cost/Minute of Surgery
Staff Turnover Cost (millions)
Overtime Cost Savings
Total OR Net Revenue (Fee increase adjusted)
21

22. OR Redesign - Summary
• Increased volume of surgery
• Added 15 FTEs without significant increase in cost/case
• Prime-time utilization increased and overtime decreased
• The overall surgical schedule became more predictable and
reliable
• Staff satisfaction improved as evidenced by decreased staff
turnover
• Increased volume without added cost & cost avoidance
resulted in improved financial performance
22

23. OR Redesign - Conclusion
• Major cultural and operational change to operating
room management
• Re-design around managing variability worth
pursuing
• The increased capacity without increased
operational costs may be important adjunct to
tactics to deal with expected payment reductions
accompanying healthcare reform
23

24. Re-engineering the Operating Room
Using Variability Methodology to Improve
Healthcare Value
Southern Surgical Association
124th Annual Session
December 3, 2012
The Breakers
Palm Beach, Florida
C. Daniel Smith, MD
24

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