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Fall 2009

Operating Room Utilization Data Management

Jody Locke, CPC
Vice President for Practice Management, ABC

The database of an anesthesia billing system should contain invaluable data with regard to all that takes place in a hospital’s operating rooms and delivery suites. Because there is a charge created for each and every anesthetic, the level of detail captured by an anesthesia department should rival that of the hospital information system itself. While the file layouts of many anesthesia billing systems are defined by the information necessary to generate a claim, we are starting to see the emergence of a new generation of software that seeks to capture not only what will be necessary to get paid for anesthesia but also data that will allow the anesthesia practice not only to manage itself more effectively, but to provide the hospital administration productivity and performance indicators and metrics that underscore the potential role of anesthesia in more effective operating room management.

Despite the potential of an anesthesia practice database to enhance operating room efficiency this aspect of practice management is in its infancy. The most common use of productivity data continues to be the evaluation of potential stipend requirements. Anesthesia practice managers are coming to understand the correlation between operating room utilization and the need for financial support. The financial analysis seeks to assess whether the revenue potential of each location covers the cost of providing the care. Having a reliable handle on the profitability of each location covered has been proven to be a consistently effective means of both justifying stipend requests and encouraging administrators to reconsider adjusting coverage requirements. The key, of course, is the ability to produce and present the data and calculations in a manner that is both clear and compelling.

Forward-looking practices also use similar types of productivity metrics to evaluate each line of business on a regular basis. Such forms of analysis provide an important means of assessing the reasonableness of continued coverage. The result of such service-line specific review may result in requests for additional financial support or they may inspire creative thinking about alternative ways of providing coverage more cost effectively. A classic example involves a practice that had believed it was important to tie up every surgery center in town to keep out the competition; once the group assessed its actual yield per location day, however, it quickly realized that a number of the coverage contracts were significantly impacting the compensation of the average shareholder. A careful assessment of the data led to the elimination of some of the less productive contracts and a much more realistic book of business.

Rare is the anesthesia practice that is not challenged by the economics of coverage and reimbursement. The conventional approach to the enhancement of practice profitability tends to focus on revenue enhancement, either through more aggressive contracting or accounts receivable management. The fact is that such efforts have limited ability to resolve significant profitability shortfalls. Typically, the only real solution involves matching staffing to revenue, which may involve adjusting coverage. It is one thing to work on ways on increasing the size of the revenue pie, but if the pie is divided too many ways then none of the slices will support the income expectations of the providers.

The use of productivity data and metrics to assess the profitability of coverage is leading to a view that an even better strategy would be to use the same kinds of information more pro-actively to actually help hospitals and surgi-centers manage rooms more effectively on a prospective basis. This is opening doors of opportunity for anesthesia practices to be seen more as problem-solvers in the tricky business of operating room management. Some practices have been so successful in their education of hospital administration that key stakeholders have come to rely on the anesthesia metrics and scorecards as the most reliable means of measuring operating room efficiency.

Key to all of these strategies is the ability to produce normalized productivity metrics by anesthetizing location. The value of being able to drill down to the specific anesthetizing location is becoming increasingly clear. To this end developers of billing software are making the necessary modifications to file layouts. Having the capability to capture such data and actually being able to generate reliable reports on demand, however, are two quite different issues. Not only must forms be designed to encourage the practitioner to indicate where the case was performed, but there must be a clear logic and structure to the labeling. Minor inconsistencies in provider labeling can greatly impact the quality of the information reported. Operating Room #1 must be reported and entered the same way for every case or the performance indicators will not make sense. It does not matter what the labeling convention is, so long as it is consistent.

Once this is accomplished the results can be invaluable. ABC’s F1RSTAnesthesia allows for performance data to be tracked in a variety of ways. Standard performance metrics are a very useful starting point. It is especially useful to be able to track average case production, units billed, hours of anesthesia time and actual collections by operating room. Even more useful is the ability to look at these same metrics by shift or time of day. Perhaps the best mechanism for monitoring utilization is the ability to plot activity by hour of day. Four typical examples of utilization data are included in the tables accompanying this article. These represent actual report data for two ABC clients.

Table 1 presents key performance metrics in summary for calendar 2008. This table allows for the assessment of comparative productivity among locations as compared to standard benchmarks. Most practices try to achieve an average productivity of 50 ASA units per location day, which should be sufficient to cover the cost of coverage given a reasonable payor mix. Ideally, each location should generate at least 7 hours of billable anesthesia time. This is considered a sustainable level of production.

Table 2 compares activity by shift for the same locations. Here the view is historical. Conventional wisdom holds that in an 8 hour shift there should be 6 hours of billable anesthesia time. It is also true that 75-80% of the revenue per anesthetizing location should be generated during the day shift.

Table 3 shows the number of locations in use by hour of the day. Here production data is aggregated and averaged for eight months. Most observers are interested in the point at which the level of activity starts to drop off. This type of graph also allows for the comparison of activity by day of week.

The last chart, Table 4, presents productivity metrics for day shift versus overall productivity over time and allows for the identification of downward trends or seasonal variations in productivity. This type of analysis is especially useful for the assessment of staffing needs and will sometimes be incorporated into a staffing budget.

Anesthesiologists intuitively recognize the value of timely and accurate data in the management of their activities. There is no question that the use of high tech digital monitors has greatly enhanced the quality of care provided in the operating room. There is no reason to believe the same concept will not prove equally as valuable in the management of the operating rooms themselves. Anesthesia providers just need to get over the preconceived notion that they are captive to the system. There is no question that the possession of such data and the ability to use it effectively in the education of the hospital administration represents a new role for many practices. The case for a more active role for anesthesia in the management of operating rooms is being made daily across the country. It will not be a wholesale transformation of the specialty but a gradual evolution from quiet observer to active participant. As in so many things, the best advice is to identify opportunities to demonstrate small examples of process improvement and build on successes one by one. It is easy to look at these types of charts and graphs and to say, that is interesting but it would not be too useful in my hospital. Such an attitude, however, will inevitably be a self-fulfilling proposition. There is a reason why so many of the largest anesthesia practices are investing in technology and data capture devices to be able to reliably measure and monitor patterns of operating utilization. They have long since learned that having the tools to manage manpower and staffing more effectively is the key to their cost-competitiveness and survival. This may not be the kind of technological application that captures the imagination with its sophistication or innovation but it is clearly one that ensures profitability.

While there is no one best way to capture and present operating room utilization data there are clearly systems that are more user-friendly and flexible than others. ABC is especially proud of its F1RSTAnesthesia software and the various ways clients have been able to use its data to manage their practices more effectively and to provide unexpected value added service to their hospitals.