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Efficiency Steps Help Hospitals Cut Costs While Improving Healthcare

Group touts advantages of revamped approach to emergency treatment, admissions and scheduling of surgeries

Eugene Litvak
Eugene Litvak, president and CEO ofthe Institute for Healthcare Optimization addresses New Jersey hospital officials.

A group of New Jersey hospitals participating in an efficiency initiative say they’ve been able to treat thousands more patients without adding beds or expanding their facilities – and that the quality of care has also improved, while costs have dropped.

The Boston-based Institute for Healthcare Optimization has been working with 14 hospitals through a New Jersey Hospital Association contract funded by the 2010 Affordable Care Act.

The effort has focused on eliminating avoidable hospital “bottlenecks,” in which an increased number of patients receiving certain treatment leads to inefficient use of hospital space and staff.

Some hospitals saw significant improvements by using sophisticated data collection and modeling tools touted by the IHO as a way to give doctors concrete evidence of the benefits of the changed approach.

These hospitals used this information to set criteria that the doctors themselves agreed upon to determine whether patients were admitted, then enforced the criteria, rather than letting doctors decide admissions on an individual basis.

Other hospitals systematically classified the urgency of non-elective surgeries, which led to more efficient use of their operating rooms.

The participating hospitals reported being able to treat 11,800 to 17,300 more patients without adding inpatient beds or operating rooms.

They also reported that their emergency departments boosted treatment capacity by as many as 20,000 patients, while still cutting waiting times for emergency patients to be admitted to a hospital bed and reducing the length of hospital stays.

Hospital representatives gathered yesterday at the NJHA headquarters in West Windsor to meet with institute officials and share what they have learned. While the groundwork for the initiative was laid in 2012 and the first half of 2013, the project officially launched in July and many of the hospitals have seen significant improvements in just three months.

In just a single unit of a single hospital – the telemetry unit of Newark Beth Israel Medical Center – the number of beds needed for patients has dropped by 25 per day.

Telemetry units – in which patients are under constant electronic monitoring – cause bottlenecks in many hospitals because doctors believe their patients will receive a higher level of care there, according to hospital staff members. But this higher level of monitoring isn’t needed in all cases and the wait times to enter the unit can over-extend nursing staffs.

With the cost of providing service for each bed in the telemetry unit estimated to be roughly $1,000 per day, savings to the hospital could reach $8 million per year, according to Dr. Robert Lahita, Newark Beth Israel’s vice president and chairman of medicine.

The guidelines for admitting patients from emergency departments into telemetry units have historically been vague, with admission decisions left to individual doctors. Newark Beth Israel found savings by working with doctors to create and then enforce criteria for admitting patients into telemetry.

The success of this approach has drawn the interest of federal Medicare officials, who are planning to meet with Newark Beth Israel officials, Lahita said.

CentraState Medical Center in Freehold also reduced the number of telemetry beds it needs. CentraState Vice President of Patient Services Linda Geisler said a bottleneck of emergency department patients waiting for telemetry beds had led to placing some of these patients in another unit, over-stretching hospital staff.

By working with doctors to establish criteria for admitting patients into telemetry – and enforcing the criteria, with doctors who do not comply facing meetings with hospital officials – the number of unnecessary telemetry admissions at CentraState dropped from 18 percent in January to 1 percent in July, Geisler said.

Other hospitals focused on more efficient use of operating rooms. That required ranking the urgency of all non-elective surgeries.

Michael L. Mutter, patient safety director for Valley Hospital in Ridgewood, said that hospital had been facing a glut of surgeries late in the day that were “add-ons” – or requested by doctors that day.

This caused a cascade of problems, as hospital staffs worked later and more patients were being admitted to the hospital after operations in the middle of the night.

By classifying the urgency of procedures, some surgeries are now being scheduled for early the next day, leading to more consistent staffing and “more awake” doctors, Mutter said.

Each surgical case is now assigned a letter grade, with “A” patients requiring procedures within 45 minutes, “B” patients within two hours, “C” patients within eight hours and “D” patients within 24 hours.

“Even the post-op care is better, because you have more resources available to the patient” when they are admitted during the day, Mutter said.

Institute for Healthcare Optimization President and CEO Eugene Litvak said the institute has worked with individual hospital systems before, but the New Jersey project is the largest it has undertaken -- and Litvak is impressed with the results.

Litvak said hospitals have always experienced peaks and valleys in the number of patients they see, causing additional expenses. But the rising costs of healthcare have made everyone more sensitive about finding ways to cut costs while still improving the quality of care.

“If my goal was to be perverse, and I wanted to waste a lot of resources, I don’t know if I could do a better job,” than to design the healthcare system to work the way it does now, Litvak said.

He served on an Institute of Medicine Committee that wrote a 2012 report that found there is $750 billion in annual waste in U.S. healthcare. He also co-wrote an article published this week by the New England Journal of Medicinearguing that improving patient flow will improve healthcare delivery overall.

“It’s absolutely impossible to provide quality care without matching demand and capacity,” he said.

NJHA President and CEO Betsy Ryan said she hopes the U.S. Centers for Medicare and Medicaid Services (CMS), which funded the project, will offer the approach as a model for hospitals across the country.

“It’s reduced wait times and increased access. The staffs are happier,” Ryan said. “It’s achieved some pretty significant results.”

The other hospitals reporting results were: Cooper University Hospital, Camden; HackensackUMC Mountainside, Montclair; Inspira Health Network, Woodbury; Jersey Shore University Medical Center, Neptune; Monmouth Medical Center, Long Branch; Morristown Medical Center; Ocean Medical Center, Brick; Overlook Medical Center, Summit; Robert Wood Johnson University Hospital, New Brunswick; St. Joseph’s Regional Medical Center, Paterson; and University Hospital, Newark.

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