ORs of Tomorrow Can Yield Pay-offs Today

The operating room (OR) of the future is closer than many facilities think. While the level of sophistication in equipment and technology depends upon a facility’s budget and ability to retrofit to accommodate exciting new developments in OR modalities, facilities should be aware of the changing dynamics of OR design and planning.

The challenges of efficient and effective surgical planning are numerous, according to Charles Martin, AIA, and Lynne Shira, RN, BSN, both principals with the Seattle architecture firm NBBJ, who were part of the Designing High-Performance ORs, a day-long symposium presented by STERIS Corporation last October. Martin and Shira explain that owners/operators of medical facilities must find a way to juggle their increasing equipment needs, technology demands and compatibility issues. They see an upward trend among healthcare facilities in the overall demand for additional space to grow their surgical service lines, including new ORs, procedure rooms and the requisite spaces needed to support these new rooms. Today’s facilities require much greater flexibility in the infrastructure and its operational capacity to accommodate more integrated systems both in and out of the OR. Not only can this flexibility create an environment to better foster staff recruitment and retention, Martin and Shira say, but it can improve the patient experience.

The size of ORs has been increasing over time, with the OR of yesterday being about 400 to 500 square feet, with a total department space of about 2,000 square feet. The OR of today and tomorrow is now an average of 600 to 800 square feet, with a total departmental space between 3,200 and 4,500 square feet. The reason for this expansion can differ greatly from facility to facility, but many institutions are creating hybrid ORs that encompass and integrate surgical and interventional services, imaging and clinical services. This kind of OR can accommodate multiple care-delivery models and new technologies, as well as support clinical and administrative uses.

Fred Bentley, practice manager for syndicated research at the Advisory Board Co., says that ORs have been invaded by numerous “space-eating” technologies, such as PACS, C-arms, endoscopic towers, robotics and inter-operative MRIs. The space around the operating table has become increasingly cramped; an OR of 300 cubic feet frequently must accommodate about 115 cubic feet of surgical and anesthesia personnel and about 150 cubic feet of equipment, leaving just about 35 cubic feet of free space. It can be a struggle for facilities to balance comfort and efficiency, Bentley adds, that an OR of less than 400 square feet is now considered to be an anachronism because of its cramped, inflexible space; the 500-square-foot OR is now a tight fit; and an OR with more than 800 square feet is probably an over-indulgence and has the potential for too much dead space. The sweet spot, Bentley says, is an OR of about 600 to 650 square feet, which has enough space to accommodate equipment, but facilitates enough unimpeded circulation throughout the room. To cope with smaller ORs that cannot be immediately retrofitted, some facilities are opting to move some bulkier pieces of equipment out of the OR, such as a mobile C-arm that can stored in a corridor alcove or an adjacent equipment closet, or using utility booms to get equipment lifted off of the floor. Other facilities are opting for more streamlined integrated interventional suites that come turn-key from manufacturers such as STERIS.

A hybrid OR is quickly becoming a favorite option for some facilities wishing to make better use of their OR space. Neurological surgeon Jeffrey Yablon, MD, of the Lake Norman Regional Medical Center in Mooresville, N.C., defines a hybrid OR as “an actual operating room located within the surgical suite that accommodates uncompromised interventional, open and minimally invasive surgery within a given specialty.” Yablon says that a number of trends are driving the hybrid OR craze, especially recent technological advancements and specialists’ desire to expand their sphere of expertise amidst competing services. Another driver is the limited space with which many facilities must contend; Yablon says a hybrid OR can be used for several services or procedures and will provide maximum utilization of space. Yablon also cites increased competition for procedural services, with cardiothoracic moving into interventional cardiology, interventional radiology moving into vascular surgery and interventional cardiology moving into interventional radiology. Another factor is tighter reimbursement; Yablon says a hybrid OR’s flexibility will allow for this space to be fully used with a continual stream of reimbursement dollars. He adds that increased readiness and flexibility results in fewer complications and better outcomes, which ultimately achieves lower costs and higher profit margins.

Hybrid ORs are a win-win situation for surgeons, Yablon says, because they allow for improved patient care because of integrated technologies, and because they provide room flexibility and improved workflow. Nursing staff members like these ORs because they improve staff productivity, workflow and ergonomics, as well as improve room utilization and reduce scheduling challenges. And administrators like them because they help to retain surgeons and nurses as well as optimize capital monies. Yablon adds that hybrid ORs are not without their challenges – including costs, simultaneous competition for the room’s unique resources among surgeons and the need for continual future upgrades – but says the advantages frequently outweigh the challenges.

One healthcare system that has moved boldly into the OR of the future by embracing cutting-edge technology is the Carondelet Health Network in Tucson, Ariz., whose hybrid ORs boast the BrainSUITE iCT, a dual-room intraoperative large-bore, multi-slice CT with sliding-gantry from BrainLAB. Neurosurgeon Eric Sipos, MD, FACS, medical director of the Carondelet Neurological Institute, says the advantages of a two-room CT scanner system include the minimized disruption of the familiar surgical workflow with a maximized CT scanning range providing the widest range of patient positioning. The surgical table position for scanning can be stored prior to draping to avoid collisions with scanner, and once positioned for surgery, the patient is not moved, especially outside of the sterile air field; the anesthesia is fixed and constant throughout the surgical and imaging procedures. With a sliding gantry moving between two ORs, there might be the opportunity for cross-contamination, but Sipos emphasizes that the preservation of the sterile environment is achieved and the patient in the adjacent OR is not compromised in any way. Carl Colombi, technical consultant with the Integrated OR Solutions (iORS) Division of BrainLAB, says the BrainSUITE fully integrated intraoperative CT surgical operating room can facilitate surgical planning and navigation, as well as achieve data management and coordinated equipment integration.

While this level of technology might be reserved for the larger health systems, ASCs shouldn’t count themselves out of the technology game nor assume they cannot replicate a hybrid OR set-up. “Over the years, we have seen more and more surgical cases migrate to the outpatient environment, primarily due to the advances in anesthetic agents and minimally invasive technologies,” Shira says. “Our previous thinking that an outpatient surgery is for ‘minor’ surgical procedures simply doesn’t hold true any longer. The equipment and technology required for minimally invasive work demands a surgical footprint and boom configurations that are not unlike the inpatient environment. ASCs that want to plan for this technology in the future need to remember this as they are planning.” Shira continues, “Recognizing that ASCs are held to a different building standard than hospitals, there should still be planning for proper air exchanges, good surgical traffic patterns with non-restricted, semi-restricted and restricted zones understood with the design. And of course, there can be no compromise on safety protocols and cleaning protocols regardless of the location of the surgical environment.”

Martin and Shira emphasize that the numerous rapid advances in imaging technology are dictating some OR planning and design elements, and note that many imaging interventions are transitioning from diagnostic to therapeutic, thus blurring the boundaries between imaging and surgery. The goal of many facilities is to integrate these departments into a single service with common support in terms of supplies, equipment and staff. If designed correctly, this concept also can eliminate the all-too-common duplication of pre- and post-operative functions, as well as eliminate the duplication of space, equipment and supply storage. Martin and Shira add that integration of staff with similar skill sets can greatly improve operational efficiencies. The integration concept also can apply to universal procedure rooms that specialists can share, as well as universal prep and recovery areas that can accommodate varying patient volumes throughout the day, as well as minimize patient transfers and reduce the number of supply-distribution points.

While we have seen how the physicality of the OR is evolving for the future, it’s important to note that healthcare professionals are following suit. Bentley points to the trend of surgeons and interventionalists becoming one and the same in the future; in the past, these two groups have performed distinct classes of procedures, while in the present, some surgeons are learning select interventional techniques. In the OR of the future, it may be no surprise to see surgeons familiar with nearly all major interventional procedures and perform them frequently; there may also be the rise of the multi-purpose proceduralist. Bentley says these proceduralists can be co-located on the same floor of a facility, or they can even be housed in the same suite, functioning in what Bentley calls a “multi-purpose sandbox” to accommodate all kinds of disciplines.

No next-generation OR can be planned and executed without buy-in from all stakeholders during the project planning and management process, including surgeons and clinical personnel, administration, the architect, the engineer, the IT department and key vendors, according to collaborators Chris Kantorak, technical consulting manager with BrainLAB, Inc., Brian Hartman, project design manager with STERIS Corporation, and Paul Niehaus, project manager with Philips Healthcare. They say that advanced OR suites require space for technology, personnel and ancillary equipment, and that design input from all user groups must be obtained to ensure an optimal environment for all. More specifically in terms of roles among stakeholders, the architect is responsible for evaluating trends such as fixed-based imaging versus mobile imaging, and OR integration; providing for the expansion to a larger OR footprint ; and understanding the changes in sterility needs when going from an imaging suite to a flexible hybrid OR suite, for example. They must also design into the OR future flexibility, such as empty conduits for information/video routing, blank structural plates and positions to accommodate new equipment in the future. To this end, the equipment manufacturer can help plan for the support of new technologies as they are added. In turn, the vendor plays a key role by helping to maximize functionality and the placement of multiple technologies, offering design expertise with proper sequencing of design needs, and planning for both existing and future technologies or evolving clinical procedures.

Extended COBRA subsidy could be extended again

The COBRA subsidy for laid off workers has been extended and expanded. On Dec. 19, 2009, President Obama signed the Department of Defense Appropriations Act for Fiscal Year 2010, which includes an extension of the government-funded COBRA premium subsidy provided in the American Recovery and Reinvestment Act of 2009 (ARRA).

The original subsidy program under ARRA provided a nine-month 65% premium subsidy for COBRA coverage to eligible individuals who were involuntarily terminated from their job and who also lost coverage as a result of the termination on or after Sept. 1, 2008 through Dec. 31, 2009.

The new legislation preserves the amount of the subsidy at 65%, but it alters the original subsidy in several ways, including: extending the period during which an eligible individual may qualify to receive the subsidy; extending the length of time eligible individuals may receive the subsidy; and providing new notice requirements.

The legislation extends the period of eligibility by replacing the original Dec. 31, 2009, cutoff date with a Feb. 28, 2010, cutoff. The subsidy is, therefore, now available to eligible individuals who are involuntarily terminated on or before Feb. 28, 2010. The new legislation also provides that the involuntary termination must occur on or before the cutoff, which differs from the previous version of the subsidy that required both the termination and the loss of coverage to occur on or before the cutoff date.

For example, an eligible individual who is terminated as of Feb. 1, 2010, and has coverage through the end of February is eligible for the subsidy under the new legislation even though the loss of coverage would occur after Feb. 28, 2010.

The new legislation also increases the maximum period to receive the subsidy from nine to fifteen months. Because that increase is also retroactive, employees involuntarily terminated between Sept. 1, 2008 and Dec. 31, 2009, who exhausted their entitlement will now have an additional six-month period. Eligible individuals whose maximum subsidized period already expired will be permitted to reinstate their coverage by paying the retroactive subsidized premiums.

Further, depending on the particular circumstances, an eligible individual may also be entitled under the new legislation to receive a refund (or credit) for any overpaid premiums that were made after exhausting the nine-month premium subsidy.

MUST GIVE NOTICE

There are also a number of new notice requirements provided in the recent legislation. For example, the recent legislation requires plan administrators to provide notice regarding these changes to individuals who were eligible for the subsidy on or after Oct. 31, 2009, or who experience a qualifying event (consisting of termination of employment) relating to COBRA coverage on or after this date. The notice must be given no later than Feb. 17, 2010; however, for individuals eligible for the subsidy on or after Dec. 19, 2009, the notice must comply with the COBRA general notification requirements.

One final point: The COBRA subsidy may be extended again. An extension to June 30, 2010, has been proposed in legislation known as the Jobs for Main Street Act, which is currently before Congress.

This column is written for informational purposes only and should not be construed as legal advice.

Barry Senterfitt is a managing shareholder at Greenberg Traurig, LLP, Austin, Texas.

Janet Farrer is an associate at Greenberg Traurig LLP, Austin, Texas.

Barry Senterfitt
Janet Farrer

OR Technology: A Glimpse Into The Future

As we move into 2010, a new wave of technology awaits us. Highly-developed health information technology (HIT)-driven systems and equipment are becoming the standard in many operating rooms (ORs), whether they are in a single-specialty ambulatory surgery centers (ASCs) or advanced surgical hospitals. It is important to stay up-to-date on these new technologies which not only reduce medical errors, but improve patient comfort and post discharge follow-up. The following case studies highlight this trend.

Enhancing Communication, Collaboration and Education: An Olympus Case Study

Three years after adopting integrated ENDOALPHA ORs, Penn State Hershey Medical Center is ready for more. As the only teaching hospital in central Pennsylvania, Penn State Milton S. Hershey Medical Center is one of the area’s largest healthcare providers. The hospital is equipped with 23 surgical suites and its department of surgery performs more than 19,000 procedures annually.

Staying Ahead of the Technology Curve

As industry trends move toward minimally invasive techniques, the hospital was quick to understand the benefits of integrated surgical suites as a way to stay competitive with the specialized technology demands of increasingly sophisticated procedures. “Several years ago, we realized we had a need for advanced, integrated technologies in our OR as we anticipated the convergence of laparoscopic and flexible endoscopic instrumentation,” says Randy Haluck, MD, professor of surgery and division chief for minimally invasive surgery and bariatrics. “We also recognized the need for a sophisticated system relative to data acquisition, storage, and transfer.”

Penn State Hershey began the process of integration in 2005, building three new Olympus ENDOALPHA surgical suites in 2006 and then converting two existing ORs to ENDOALPHAs the following year. The hospital anticipates completion of four more integrated ORs, for a total of 27 surgical rooms with one-third of them set up as state-of-the-art ENDOALPHAs this year.

Taking a Comprehensive Approach

True systems integration goes beyond the equipment and operating platform. It also takes into account the ergonomic design, workflow and technology optimization of each surgical suite. This means designing rooms with ceiling-mounted booms for holding imaging equipment and monitors off the floor, allowing for more efficient post-procedure clean-up and ergonomic positioning of monitors during the procedure. It means integrated equipment (scopes, imaging platforms, monitors, video and accessories) that work together and can be easily interchanged during a procedure. And it means a cohesive information management system for patient and procedural data, images, and audio that can be captured, stored, and retrieved from both inside and outside the sterile field. “We needed to have multiple surgical services using the same operating room, between general surgery, urology and minimally invasive GYN surgery,” says Gerald Harkins, MD, medical director for minimally invasive GYN surgery. “We’re all able to function in the ENDOALPHA laparoscopic suites, and it’s been a fantastic platform for that utilization.”

Experiencing the Installation Process

Olympus offers turnkey solutions, working with customers from start to finish on the design, construction and set-up of integrated operating and intervention rooms. “The flexibility of Olympus’ ENDOALPHA system means it can be easily customized to create a right-sized solution unique to each facility,” says David Alexander, Penn State Hershey’s Olympus integration consultant. “We were able to incorporate their legacy equipment along with their pre-existing video-conferencing system and streaming video package into their ENDOALPHA ORs to create one seamless solution. Hershey proved to be very knowledgeable, so it was a highly collaborative effort.”

Taking Centralized Control

The nerve center for each ENDOALPHA OR is a centralized control panel. With audio, video, data and images all controlled via a single touch screen, clinicians have the power to connect, communicate and collaborate with others outside the procedure room. Clinicians can also control surgical and room lighting, in-room observation cameras and all information and imaging systems without ever leaving the sterile field. To further enhance efficiency, the ENDOALPHA system provides preset capabilities so that monitors, lighting and all equipment can be custom-tailored to surgeon preferences and made available at the press of a button.

Communication, Collaboration, and Education

Penn State Hershey Medical Center’s custom-placed displays ensure all team members have the perfect view of live images. They regularly create video networks for sharing, collaboration and education from within and outside the hospital. “There’s no question that the Olympus system has dramatically changed how we teach in the OR,” says Peter Dillon, MD, chairman of Penn State Hershey’s surgery department and surgical director of perioperative services. “We’re now able to broadcast these procedures to first- and second-year medical students, exciting them about the wonders of surgery at a much earlier stage in their training. So it really has changed dramatically and in a very exciting fashion how we teach.” Haluck adds that it also gives the Penn State Hershey team a better way to collaborate with other physicians and share information with patients. “We can educate other physicians and record images for colleagues or bring them in when needed to confer and/or assist on a procedure. We are also able to show patients what their surgery was about and why they were having problems. That’s a great benefit to us, and certainly patients appreciate it as well.”

Interventional Radiology Breaks New Ground: A Skytron Case Study

Philips and Skytron have teamed up to help fully realize the promise of a hybrid angiography suite by implementing new cardiovascular solutions with the latest Allura Xper FD technology from Philips and state-of-the-art surgical lighting and boom technology from Skytron.

For more than a decade, Barry T. Katzen, MD, medical director of Baptist Cardiac and Vascular Institute (BCVI) in Miami, has pioneered the integration of surgical and interventional procedures. Katzen and his team continue to show that surgical procedures in an angiographic environment can be accomplished with the same degree of efficiency as in an OR.

“The specialties of interventional radiology and vascular surgery bring more to each other when we work together,” Katzen says. “Procedures that help drive this relationship include aneurysms of the thoracic aorta and abdominal aorta. Having an environment where we can use a surgical option allows us to think out of the box for individualized patient solutions.”

In 2008, Philips Healthcare and Skytron entered into a collaborative agreement to provide comprehensive, integrated solutions for the cardiovascular environment. Katzen seized the opportunity to refine the surroundings. Based on a well-coordinated plan from Philips and Skytron, a room at BCVI underwent a significant upgrade to enhance hybrid functionality.

“One of the great advantages of the new room design is it’s so spacious that we can all function effectively without being in each other’s way. Information can be transferred to the head of the bed — to the anesthesiologist — down to where we’re working very easily,” says James F. Benenati, MD, medical director of the peripheral vascular laboratory.

A Room That Works

BCVI’s surgical team appreciates the changes made. Katzen believes the upgrade has created a better environment for all involved. A recent experience demonstrated how the teams successfully combined surgical access with an interventional solution. A patient presented with critical narrowing of an artery to the brain and chest, and a narrowing of that same artery in the neck. “It was a very complex situation,” recalls Katzen, “but we combined our skills. The surgeons removed the plaque in the neck with an endarterectomy and we used that same access to go down and stent the chest.”

Installation With Minimal Impact

“We’re a busy lab and taking a room down for a period of time is always an inconvenience,” says Katzen. “The one thing everybody remarked upon was how fast this upgrade was accomplished.” In two and a half weeks, Philips and Skytron, working closely with the implementation team at BCVI, completed the staging and upgrade. The new room reflected the input of interventional radiologists, surgeons and anesthesiologists, with each group helping to define the clinical specifications to make it a multi-disciplinary environment.

OR Technology Update: A Steris Case Study

The epitome of surgical technology today is one OR in which surgeons can perform image-guided, catheter-based interventional procedures; minimally invasive endoscopic procedures; extremely precise robotic surgery; or full open surgery, depending on the case load or discoveries made in surgery. In this type of hybrid OR, integrated imaging, computerized patient information and live video routing technologies instantly display test results and critical real-time information on high-definition monitors in the sterile field. This allows surgeons and staff to ascertain the most timely and accurate diagnosis and treatment for the patient. It also helps them achieve the most flexible and effective uses of the room and optimize scheduling and utilization.

These are also the types of rooms in which medical leaders and pioneers train residents and other clinicians, develop new minimally invasive procedures, such as natural orifice trans-luminal endoscopic surgery (NOTES) and trans-catheter heart valve replacement and master new surgical devices.

These highly advanced rooms can incorporate advanced communications, connectivity, LED surgical lighting and high-definition visualization such as intra-operative fluoroscopy, intra-operative computerized tomography, magnetic resonance imaging, image-guided navigation, 3D software extrapolations of the imaging, robotics and many other technologies. Each of these tools are important in today’s hybrid OR, but when integrated correctly they form a seamless whole that is greater than the sum of its parts.

To accomplish this synergy, STERIS collaborates with leading manufacturers to design and install customized, integrated HD360°™ Hybrid ORs for healthcare facilities. STERIS project design managers configure STERIS’s open infrastructure Harmony® Lighting and Visualization systems, equipment management systems and advanced integration technologies with interoperative imaging, robotics, endoscopic and video technologies and more. The result is a suite that enables fully informed staff, highly efficient procedures, extremely flexible room use, successful surgeon recruitment, medical education, ongoing surgical innovation, leading edge robotic surgery, telemedicine, and new possibilities yet to be imagined.

OR Technology Update: A Berchtold Case Study

Problem

Before hybrid ORs existed, imaging and communications capabilities were not an option during cardiovascular and neurosurgery operations, resulting in patients getting diagnosed and treated in two different visits. Separate procedures and imaging consultation can be costlier for patients and surgeons, can result in additional stress, more down time and longer hospital stays for the patient, and are not conducive to emergencies that sometimes arise during surgery.

Solution

Combine minimally invasive and interventional surgical technologies with medical imaging and communications equipment in one operating room: the hybrid OR.

A growing trend involving endovascular procedures during cardiovascular and neurological surgeries requires equipment to accommodate open and closed procedures in the same room, even at the same time, although this is not necessarily planned from the start. The new hybrid OR model provides the surgeon flexibility in performing a variety of interventional, imaging and surgical services in one setting, eliminating the need to transfer the patient.

For example, two of the most popular hybrid ORs are for cardiovascular and neurosurgical procedures:

» Neurosurgical hybrid ORs can include magnetic resonance imaging (MRI); computed tomography (CT) and angiography equipment within a neurosurgical operating room.

»Cardiovascular hybrid ORs often features: Fixed ceiling- or floor-mounted C-arms, ultrasound and endoscopy equipment, coupled with cardiac catheter laboratories.

Because a hybrid OR is specifically designed for endovascular procedures, careful planning from the beginning can help to ensure all rooms are equipped with necessary tools. Some tips to consider while creating a specially designed hybrid OR include:

»Identify factors that are important to the hospital team, such as, should all equipment hanging from the ceiling (surgical arms, flat panel arms, etc.) be able to cover the whole patient in all orientations?

»Think as far ahead as you possibly can to “future proof” the room, reducing the need to renovate the OR moving forward. For example, what is the most extreme type of procedure the team might do in the OR? Then outfit the room in preparation for the procedure.

»Involve the end user at the very start of the project to give a real world perspective for offering scenarios, as well as discussing needs and concerns. This can include nurses, surgical technicians and staff, as well as anesthesiologists.

»Consult with the vendor providing lights, booms and imaging equipment to accommodate all of their needs. For example, many imaging companies have different requirements for ceiling heights.

Hybrid therapies enable hospitals and clinicians to provide less invasive care that is safe and cost-effective for the patient. Careful planning can lead to an effective hybrid operating room design that offers the following benefits:

» Cost-effective operations for patients and surgeons, with better outcomes.

» Reduced stress, faster recovery and reduced hospital stays for the patient.

»Safer procedures, especially in the case of an emergency.

New Bair Paws® Gown Brings “Flex Appeal” to Patient Warming: An Arizant Case Study

The recent Centers for Medicare and Medicaid Services (CMS) adoption of the SCIP-Infection-10 normothermia quality measure has made it more important than ever to simplify the process of warming every surgical patient. Arizant Healthcare’s latest innovation in forced-air warming, the Bair Paws Flex gown, does just that by incorporating a surgical warming product — Bair Hugger blankets — into a comfortable patient gown that warms before, during and after surgery.

While clinical versatility is a key benefit of the Bair Paws Flex gown, so is the practical economic approach of standardizing multiple warming capabilities into one gown that can accommodate most perioperative warming needs. While helping to improve outcomes and boosting patient satisfaction, the Bair Paws Flex gown may save facilities money by supplanting multiple OR warming blankets and the warmed cotton blankets and gowns often used to comfort patients.

Just One Gown Warms From Start to Finish

Before surgery, patients appreciate the Flex gown for its controllable warmth; they can simply dial the temperature of the air flowing through the gown to a level that’s comfortable. The surgical warming products built into the gown are unknown to the patient because they are deployed only by surgical staff.

In the operating room, the same Bair Paws Flex gown offers clinicians the ease and convenience of having multiple patient warming options available during surgery. Seamlessly integrated into the gown are: a head drape, adhesive tape to isolate the surgical field, and deployable arm extensions to transition into a Bair Hugger upper body blanket with tie strips. A second insert in the lower portion of the gown may be used to prewarm before surgery and then warm again as a lower body blanket once in the OR. The gown’s design allows upper or lower body warming for any surgical positioning — supine, prone or lateral.

After the procedure is over, the upper body blanket arm extensions, head drape and surgical tape strip perforate off, returning the garment to a standard warming gown for post-operative use through the lower warming blanket insert.

The Bair Paws Flex gown is comfortable for patients, convenient for clinicians and warms from pre-op to the OR to PACU. Best of all, it’s also economical. One gown handles almost all your warming needs, including contributing to quality goals like SCIP-10 and improved patient satisfaction. It incorporates a highly effective surgical warming device directly into a soft, comfortable hospital gown that does something positive for patients and hospital staff. It’s not just a gown. The Bair Paws Flex gown is a patient warming and patient satisfaction tool. It’s the future of patient warming, and it’s available today.

Practicing Arthroscopic Surgery on Computers, Not People: A Toltech/Sensable Case Study

Learning diagnostic knee arthroscopy is not unlike learning to play the violin — both art forms require a mixture of cognitive and proprioceptive skills that can only be developed through rigorous practice. And while both require intensive mentoring, surgical apprenticeship is unique in its resulting increase in operating room time and potentially patient risk. Just as with a violin that makes no sound, little can be learned from surrogate surgical environments having no objective feedback, including costly and labor-intensive cadaver training. And little transference of either skill can be expected from computer based training lacking the feel of the instrument(s).

In late 2009 the University of Michigan Medical Center’s Orthopaedic Surgery department, led by James Carpenter, MD, became an early adopter of the Knee Arthroscopy Surgery Trainer (KAST) from Touch of Life Technologies (ToLTech). This simulator was co-developed with the American Academy of Orthopaedic Surgeons (AAOS), Arthroscopy Association of North America (AANA), and the American Board of Orthopaedic Surgery (ABOS). It provides both cognitive and haptically-enabled skills training for the proper and efficient techniques required for diagnostic arthroscopy of the knee as done on an outpatient basis — including training to competency, and a modality for complete evaluation of residents’ skills.

In the KAST simulator, trainees hold a customized stylus in each hand — emulating the probe and camera used in actual surgery — that are attached to PHANTOM® force-feedback haptic devices, made by SensAble Technologies. The haptic devices allow trainees to navigate in true 3D space while interacting with high-resolution models that are viewed on-screen, as if through an actual arthroscope. The force feedback devices are programmed to push back on the user’s hand to deliver the “feeling” of the soft tissue, cartilage, and ligaments involved in knee arthroscopy.

The “Virtual Mentor” in KAST guides, critiques, and scores the resident on each part of the procedure. In one module, trainees must perform three steps for examining the medial meniscus with a probe. The Mentor requires the trainee to score 100 percent on each step before attempting subsequent tasks, and finally a time-trial. A special “cheater view,” only available at the novice level, shows the outside image of the knee (seen in the right hand portion of the Mentor screen), to help residents understand where the tools they are using are located with respect to the anatomy. KAST switches seamlessly between a right and a left knee, forcing the trainee to be ambidextrous with respect to the camera and probe.

Haptically-enabled surgical simulation provides cognitive and skills-based training — freeing up the outpatient facility’s attending physicians to teach higher-level skills, and giving residents unlimited autonomous practice opportunities. It allows residents’ skills to be objectively measured and validated before they undertake procedures on patients. The University of Michigan Health System’s Orthopaedic Surgery department plans trials comparing beginning residents who have trained on KAST, against a control group. Separate validation studies led by the AAOS using KAST are underway nationwide during 2010.

Alcon’s Fourth Quarter Sales Rise 14.5 Percent

Fourth Quarter Highlights

Organic sales growth was 8.5 percent (+14.5 percent reported) as sales increased to $1.72 billion
Organic sales growth in emerging markets was 11.5 percent (+19.3 percent reported)
Adjusted diluted EPS rose 14.2 percent to $1.61 (+7.1 percent to $1.51 reported)2009 Highlights

Organic sales growth was 6.3 percent (+3.3 percent reported) as sales increased to $6.50 billion
Achieved broad-based global market share gains
Second half results reflect progress toward market recovery
Adjusted diluted EPS rose 13.5 percent to $6.81 (-1.9 percent to $6.66 reported)
Board will propose to shareholders a dividend of 3.95 Swiss francs per share
HUENENBERG, Switzerl…

Legal Issues for 2010

The ambulatory surgery center industry (ASC) confronted both challenges and change in 2009. However, with numerous ASC developments underway and an economic recovery on the horizon, the ASC industry is poised to perform well in 2010. This article addresses the key business and critical healthcare regulatory developments of this past year and their potential impact on the ASC industry for 2010.

Sale to ASC Management Companies and Health Systems

A significant business issue confronted in 2009 by the ASC industry was the decline in transactions involving a sale of a significant equity interest in an ASC to an ASC management company or health system. This decline was likely precipitated at least in part by a few historical ASC management companies that slowed down their acquisition strategies due to the tightened credit market.

In addition, the terms and pricing associated with a sale of a significant equity stake in an ASC clearly changed. For the past few years, many ASC management companies and health systems were willing to acquire a controlling equity interest in an ASC for a 7-plus purchase price multiple. Most purchase price multiples have dropped into the 5-6 range.

The purchase price formula is typically calculated as follows: (i) the ASC’s earnings before interest, taxes, depreciation and amortization (EBITDA) for the prior twelve months; multiplied by (ii) the purchase price multiple (e.g., 5-6 range); less (iii) the ASC’s long-term liabilities; multiplied by (iv) the ownership percentage being purchased. For example,. assume an ASC with $800,000 in EBITDA and no long-term debt desires to sell a 51 percent interest to an ASC management company, then the purchase price could range from $2 million to $2.5 million (e.g., [($800,000 x 5 to 6) – $0] x 51 percent).

Some new well-funded corporate buyers have also emerged in 2009. Additionally, hospitals continue to have an appetite for ASC acquisitions. As a result, a slight uptick in these transactions can be anticipated for 2010. While purchase price multiples will likely hover in the 5-6 range, ASC companies have also introduced more creative strategies to make deals more attractive to selling physicians, including the use of earn-outs and staged transactions. These strategies warrant careful attention as they can introduce new healthcare regulatory and other legal issues into the mix.

Hospital/Physician Alignment Options and Changes to the Stark Law

Hospitals and health systems will likely continue to leverage their higher reimbursement rates and community branding as a means to attract ASCs to them over other corporate investors. Historically, some hospitals pursued an “under arrangement” transaction strategy with physicians in an ASC setting.

While the terms of an “under-arrangement” transaction can vary considerably, it typically involves a physician-owned company leasing the space, equipment and/or staff to the hospital — perhaps on a turn-key basis. The hospital bills Medicare and other payors for the services and pays the physician-owned entity a fixed fee, variable fee or hybrid fixed/variable fee.

However, Stark law changes that became effective as of Oct. 1, 2009 forced hospitals and physicians to restructure or unwind such arrangements. In particular, the scope of the Stark law was expanded to apply not only to the entity billing for a “designated health service” (i.e., the hospital) but also the entity that is performing the designated health service (i.e., the physician-owned entity). In addition, the Stark law no longer permits a physician owned entity to lease space or equipment on a per-click, percentage of revenue or other similar fee structure.

In what appears to be an emerging trend across the country, a number of health systems are also considering (or for many — reconsidering) a broad spectrum of hospital/physician alignment and integration options including physician practice acquisitions, use of the foundation model, and entering into professional service and employment arrangements with surgeons and other proceduralists. These strategies may be driven at least in part by the changes to the Stark law as well as the mutual desire of hospitals and physicians to collaborate in the provision of healthcare services in a more meaningful and long-term manner.

Migration of Procedures From Hospitals Into the ASC

At the individual ASC level, in spite of a slight decrease in demand, many ASCs have grown their profits. The revenue growth may be due in part to the movement into the ASC of procedures historically required to be performed in the hospital setting, such as vascular access and certain orthopedic procedures.

The emergence of these procedures new to the ASC setting has been primarily driven by advances in medical technology as well as the expanded list of Medicare ASC covered procedures under the revised ASC payment system. Adopted by the Centers for Medicare and Medicaid Services in 2007, the revised ASC payment system allows an ASC facility fee to be paid for any surgical procedure performed at an ASC, except those surgical procedures that CMS determines are either not safe when furnished in an ASC or in which the expected duration of services would exceed 24 hours following admission.

The addition of these procedures to an ASC can have an immediate positive impact on an ASC’s bottom-line. As a result, many ASCs are examining the viability of adding these procedures to their ASC by attracting the appropriate physician specialists and sub-specialists and properly equipping the facility for such procedures.

Physician Re-Syndications

Physician re-syndications (i.e., sale of equity interests to physicians) remain very active for a number of reasons. First, ASC companies and physician owners of ASCs often desire to solidify physician utilizers’ relationships to their ASC by having them purchase equity interests. Second, a number of ASCs are reselling equity that was repurchased from prior physician investors who are no longer utilizing the facility.

Many ASCs, however, are struggling with how to make the buy-in price to physicians more attractive. The purchase price must be consistent with fair market value to minimize anti-kickback law issues. The purchase price formula for a physician’s purchase of a minority interest is the same as the formula used by an ASC management company, except that a 2-4 purchase price multiple is typically used in lieu of the 5-7 multiple. The buy-in, however, can still be quite significant. For example, assume the same ASC, as previously mentioned, desires to sell to a 5 percent equity interest to a physician, then the purchase price could range from $80,000 to $160,000 (i.e., [($800,000 x 2 to 4) - $0] x 5 percent) Allowing the ASC or its owners to loan monies to the physician to buy-in, including through an advance of future ASC distributions, could raise regulatory concerns. Accordingly, an ASC may consider alternative strategies to make the purchase price more affordable. These strategies may include the use of a dividend recapitalization or preferred distribution (which are treated as a liability in the formula described above thereby reducing the purchase price).

Alternatively, an ASC could undergo a tax-free restructuring so that the ASC is owned through a physician group practice. Group practice ownership of an ASC may allow an ASC to depart from a fair market value buy-in price.

Physician Buy-Backs

Many ASCs continue to be confronted with physician partnership and “deadweight” issues. A recently filed lawsuit, DeBartolo v. HealthSouth Corp. brings to the forefront the issue of non-productive physician owners in ASCs. The lawsuit was filed by a surgeon investor in an ASC whose shares were repurchased because of his failure to perform at least one-third of his procedures at the ASC.

The case is significant because it addresses the critical issue of whether the repurchase of a physician’s equity interest for failing to utilize the ASC would violate the anti-kickback law. On the one hand, the federal anti-kickback law ASC safe harbor mandates that a physician must perform at least one-third of his procedures at the multi-specialty facility in which he has an ownership interest. However, regulatory concerns could also arise if an ASC’s redemption of a non-productive physician is intended to penalize the physician for not selecting this particular facility for the procedure.

Nevertheless, many ASCs have incorporated compliance with the one-third test requirement into their governing documents. If a physician owner fails to perform at least one-third of his or her ASC procedures at the ASC in which he or she is an owner, then the ASC’s governing document may provide that such physician’s ownership interest in the ASC can be repurchased by the ASC or its other owners.

In an early ruling in DeBartolo, the federal court dismissed the lawsuit indicating it should be addressed under state law. While too early to determine, this initial ruling suggests that physician buy-back issues may simply raise state contract law claims. It is therefore critical that an ASC’s governing document incorporates the latest terms and mechanisms for dealing with physician equity buy-backs in a manner that takes into account the latest regulatory and other legal guidance.

Conclusion

There is no denying that this past year was a bit sluggish for the ASC industry, particularly in the transactional front, as it faced its own set of challenges including dealing with aggressive payor “out-of-network” billing strategies and the potential impact of health system reform. However, most ASCs escaped generally unscathed from the economic woes of this past year.

As 2010 gets underway, there are a number of favorable indicators for the ASC industry. Newly emerging buyers with capital are in search of ASC acquisition opportunities. Hospitals remain interested in pursuing collaborative strategies with physicians, particularly in the ASC and other outpatient sectors. And, ASCs are adopting a number of revenue enhancement strategies including through performing procedures not historically performed in the ASC setting, physician re-syndications and by adding ancillary revenue streams (e.g., anesthesia). As a result, the ASC industry is poised to have a strong year in 2010.

The height of health IT

Even health insurance giant WellPoint—with more than 35 million members and arguably enough reach to change the system with sheer volume alone—is taking few chances on the future of healthcare delivery. Like most plans, it’s testing new programs with cautious optimism, while aiming for large-scale implementation.

Charles Kennedy, MD, WellPoint’s vice president for health information technology, has a vital role in the plan’s innovation because few initiatives these days can be accomplished without the backbone of health IT.

Specifically, WellPoint’s emerging Individual Health Record—a simultaneously patient-facing and physician-facing electronic record—is “almost an air traffic control system to manage disease,” according to Dr. Kennedy. It’s probably one of the most promising efforts to control costs among members with chronic conditions. Pulling claims and clinical data through complex algorithms to arrive at a functional health summary differentiates the Individual Health Record from the typical EMR system.

“If you’re a hospital or institution, you have a variety of clinical data sources that have information on the patients that you see,” he says. “If you haven’t deployed an interface engine or some way of pulling those various clinical data sources together, you’re late to the party, and you need to do that ASAP.”

With more than 20 years of experience comprised of clinical practice and health IT implementation, Dr. Kennedy began his career in internal medicine. When he was a resident at Highland General Hospital in Oakland, Calif., he noticed how the patients’ needs far outstripped the hospital’s resources, and that experience solidified his vision of where medical care and information should meet.

“We tried to treat each patient regardless of who they were or their ability to pay,” he says. “It had the unfortunate side effect that we never thought about cost. We only thought about what was right for a patient. But that created a system where people are actually being hurt because they can’t afford care. I began to realize that the very laudable and applaudable approach of not caring about cost—only the patient—is right, but that doesn’t mean you can become cost unconscious. Cost unconsciousness has its own set of bad outcomes. That’s what’s led me into thinking we need to be more efficient. We need health IT.”

Earlier this year, Dr. Kennedy was named by the Government Accountability Office as a member of the new Health Information Policy Committee, which was established by the American Recovery and Reinvestment Act. Serving a three-year term, he and other committee members are creating policy framework for the development and adoption of a nationwide health IT infrastructure, including standards for the exchange of patient information. The committee will also make recommendations for handing out the $38 billion in health IT funding earmarked in the reinvestment act.

WHAT ARE SOME OF THE HEALTH INFORMATION POLICY COMMITTEE’S GOALS?

A:We’re trying to make sure the Obama health reform strategy becomes real. What people don’t realize is the number of things the industry and the government agree on. For instance, the government invested $1.1 billion in comparative effectiveness research.

The stimulus bill has $38 billion in it for health IT, and we’re trying to help the government develop policies to spend that money wisely. Our function is to say, ‘How do we take this incredible resource that Congress and the President have given us, and how do we turn it into an investment that creates healthcare value for the whole country?’ It’s a massive undertaking.

Our first objective was to ensure that the money from the stimulus package paid out over five years created value. We asked ourselves where we wanted to be five years from now, and then we worked backwards from there.

Deploying computers is not the goal. Having physicians and patients use computers to create better care at a lower cost is the goal. To do that, we have to set the bar high for the care system. Not only must you use the computer, you must use it in a meaningful way for better care. These are the ‘meaningful use’ criteria that we’ve published.

If we distribute a substantial number of computers, and physicians don’t use them, we won’t be successful. We didn’t want to focus on technical measures. We created the meaningful use criteria, and every single one is clinical.

We want physicians to achieve a clinical result, and we want information technology and the money in the stimulus package to be a contributor to that improved clinical result. For instance, one of the criteria is to avoid 1 million heart attacks and strokes by 2015. Another is to make cardiac disease no longer the leading cause of death in the United States. Those are stretch goals. That is not something simple and trivial.

It would have been much easier to say, ‘Our goal is to make sure 90% of physicians have computers.’ But we consciously didn’t do that because we recognize that health IT is a tool and that other changes need to happen.

HOW WILL THE INDUSTRY ACTUALLY ACHIEVE MEANINGFUL USE AND OTHER MILESTONES?

A:The law is actually quite specific in defining what a qualified system is, and we have a subcommittee that’s identifying the actual entity—such as the Certification Commission for Healthcare Information Technology (CCHIT)—that will assess systems as to whether they qualify or not. The bigger challenge is data integration.

Everyone recognizes that healthcare is horribly fragmented, that there are silos of care. We know that there’s massive inefficiencies, and there are significant quality concerns because information is not shared as people move across silos.

The challenge with data integration is that we really haven’t figured out how to do it correctly. If you’re an integrated delivery system and you buy one EMR, that’s fine, and that works. But 70% of physicians practice in a community setting, solo and small group practice. You have this tremendous problem that all of these systems are different. They call things by different names, and they even capture different sets of data.

WELLPOINT HAS CREATED THE INDIVIDUAL HEALTH RECORD SYSTEM THAT USES ALGORITHMS. HOW WILL THAT MAKE A DIFFERENCE?

A:Algorithms, also known as decision support, are going to be the key to getting value out of these systems. Let’s say the federal government funds a comparative-effectiveness study that identifies a new drug is great for certain people. In today’s world, we know it can take up to 17 years for that to be commonly found in a physician’s paper record. With this approach, you can create an algorithm as soon as physicians or specialty societies have decided on certain best practices. Now you’ve created an infrastructure to get that message to every doctor, but only when there’s an appropriate situation for that rule to be applied. That will take that 17 years down to 17 days. That’s a huge advance.

Let’s say we have noticed that there’s a lot of inappropriate use of PET scans. In today’s world, a doctor would have to call us for preauthorization every single time he orders a PET scan. In the future, the algorithms will be running, and they will only alert the doctor if there’s an issue with a PET scan. Today, they call 100% of the time, and we generally approve the scan more than 90% of the time. Algorithms will take hassles, administrative costs and bureaucratic burdens out of the system.

The right kind of health IT allows us to use new knowledge from our outcomes research subsidiary [HealthCore] and any gaps in a member’s care identified by our informatics company [Resolution Health] in much more effective ways. The right kind of health IT allows these advances to be applied real time at the point of care while the doctor is treating the patient or helping the patient at home.

IS WELLPOINT’S INDIVIDUAL HEALTH RECORD WORKING? HOW IS IT ANY BETTER THAN OTHER EMRS OR PHRS?

A:We’ve run a pilot in Dayton, Ohio. The idea was not just to create interoperability—don’t just allow System A to talk to System B. When you connect systems together, what you create is just a data dumpster. It’s like putting a jigsaw puzzle on a physician’s desk.

That information has to be organized to just the summarized information that the doctor needs…You don’t take all of the information out of these various systems, you only take the information necessary for the ongoing management of the patient.

Many EMR implementations have failed to show value. About 30% of the time, physicians will actually turn them off because they are incredibly time-intensive and will reduce a physician’s productivity. That will hit them in the pocketbook. We’ve looked for solutions that wouldn’t be so intensive from a physician’s data-entry perspective and would do more sorting of information and presentation of information.

Physicians are not data generators. They’re data consumers. Their orders create significant amounts of data, but the physicians themselves usually just scribble a relatively brief note. The problem with many EMRs is they will require physicians to become data-entry clerks.

In Dayton, Ohio, we have a very significant market share. We’re Anthem Blue Cross Blue Shield of Ohio, and we also have a strong partnership with Kettering Hospital Network.

Kettering had already installed an application integration solution, so even though they had 120 different clinical sources, many of those clinical sources could be accessed through infrastructure they had already built. That made it easy for us to collect all of the clinical data out of their systems. We built feeds to the application from Anthem’s claims systems. We were able to get this application up and running in a little over three months, which is incredibly rapid. We made it available to the patient in the form of a PHR and to the doctor in the form of a CCHIT-certified EMR with e-prescribing.

When we looked at who was using the tool, we found that patients who had a higher illness burden actually made preferential use of the tool. For many of the tools we’ve deployed, the ‘worried well’ have been the type of people who used it, not the people with the chronic disease that we really need to reach.

We noticed the people who used the tool and had the higher illness burden, their cost increase year over year was actually less than the people who didn’t use the tool, even though those people who didn’t use the tool were healthier.

We built algorithms in the system that exactly correlated with various HEDIS measures and every time the doctor or the patient logged on, they could see their exact compliance. By giving the patients and the doctor the same information in a simple red light, yellow light, green light format with algorithms enabled us to see quality improvement scores of anywhere from 10% to almost 40%.

WHAT’S THE BUSINESS CASE FOR A HEALTH PLAN TO CREATE A SYSTEM LIKE THAT?

A: Our strategy is maximizing healthcare value, and healthcare information technology is really a tool to get you there. But it has to be the right kind of health information technology. It has to influence doctor’s decisions, and you have to present sufficient clinical data—not mountains of data but the key things the doctor needs to know so that you can influence his decision to do something that’s consistent with the evidence base, or to prescribe a drug that will cost the patient less but has the same likelihood of creating a good patient outcome.

If you look at why healthcare spending is out of control, it’s chronic disease, not health plan profits and not health plan administrative costs. We are seeing an explosion of chronic disease in this country, and chronic disease is managed largely by the patient at home. They’re managing their diabetes 99% of the time at their home, not in the physician’s office. If you don’t make your health IT solutions patient-centric and if they don’t address chronic disease, I don’t think that you’re going to get the kind of value that you want.

HOW ARE THE PHYSICIANS EMBRACING THE INDIVIDUAL HEALTH RECORD?

A:We have 300 physicians using the system now. We’re planning for a broader rollout to the greater Dayton area in 2010 to virtually all primary care physicians.

What we’re focusing on is chronic disease management, and there’s not huge debate about many of the things that need to be done to take care of these patients. That’s not the problem. The problem is actually getting it done. The physicians in general have been positive and are beginning to see how their lives could be easier.

We also added all of our pay-for-performance rules. We pay physicians more if they practice medicine consistent with the evidence base, and we took the existing measures and turned them into algorithms in the system. As long as the physician follows all the alerts, he can be sure that he’s going to maximize his pay for performance incentive. That’s convenient for the doctors because what they usually have to do is identify the patients who haven’t had certain interventions and then reach out and call them.

We’re just starting to incorporate our utilization management rules. If we can begin to move those algorithms to the point of care, then physicians might not have to call except for when there’s a real reason to discuss something, which might be 5% of the time.

DETERMINING THE EFFECTIVENESS OF TREATMENTS IN ORDER TO BUILD THE ALGORITHMS IS AN EXPENSIVE PROCESS. HOW CAN IT BE DONE?

A:This is the beauty of health information technology…if you bring it together in a repository that’s reflective of the patient’s clinical condition and how they’re being managed, you can begin to do database-driven studies rather than very expensive prospective clinical trials where you’re enrolling patients and following them over time. You can begin to do database driven studies that are a fraction of the cost. No, they’re not the gold standard, which will always be a randomized perspective-controlled clinical trial, but there’s a lot of information we’re going to be able to glean out of database-driven studies that are more observational and more retrospective.

BE A VISIONARY. WHAT DO YOU SEE AS THE POTENTIAL FOR HEALTH IT?

A: I hope that every time a patient needs information when they’re home or need to take care of their chronic disease or want to stay well, that they have that information at their fingertips, it’s actionable, and they don’t even have to think about it. If we can make it that easy—and there is a path to get there—we could actually fix the healthcare system.

Charles Kennedy, MD, has held strategic health IT positions with a variety of organizations. He also served as the medical director of a California health center in addition to other clinical service. He earned an MBA from Stanford University, an MD from the University of California at Los Angeles, and a bachelor’s degree in genetics from the University of California at Berkeley.
” Physicians are not data generators. They’re data consumers.”

Updated Abbott Statement: To Help Respond to Growing Health Crisis, Abbott Increases Aid to $2.5 Million for Haiti Relief and Recovery Efforts

Updated Abbott Statement: To Help Respond to Growing Health Crisis, Abbott Increases Aid to $2.5 Million for Haiti Relief and Recovery Efforts

Hospitals remain unsure of future business model

BATTERED BY ONE OF THE WORST recessions in generations, many Americans are holding out hope that government initiatives can pull the country out of its economic funk. While there is room for optimism, hospitals might soon find their already-sagging bottom lines taking another plunge under new healthcare legislation.

“Our biggest concern is about healthcare coverage and extending it to the maximum number of people, but that can lead to the chronic problem of potential government underpayments,” says Richard Umbdenstock, president and CEO of the Chicago-based American Hospital Assn. “Medicare pays hospitals, on average, about 91 cents on the dollar, and Medicaid about 88 cents. If more of our patients are covered by those government programs, or some sort of public option tied to those payment rates, the result is going to be much greater financial instability for the entire system.”

It’s a perfect storm brewing across the healthcare landscape, and the economy is only one part of it, says Gary Blackford, president of Universal Hospital Services, a medical equipment outsourcing company based in Edina, Minn.

“Everyone knows that when the economy takes a turn for the worse, hospitals see an increase in the number of people who can’t pay for the services they receive,” he says. “Then, given the political uncertainty we’re experiencing, hospitals aren’t sure what their business model is going to look like in the future, so they’re frozen in place until that picture becomes clearer. Finally, hospitals have seen their percentage of Medicaid patients grow much higher at the same time states are having a difficult time meeting their reimbursement obligations.”

On the bright side, some experts believe that this difficult period has helped prepare hospitals for a brighter future by forcing them to become leaner and more efficient.

“It’s not like hospitals simply closed their eyes and continued to plow forward during this down period; they made improvements in their ability to control expenses, particularly on the labor side,” according to Gary Pickens, leader of the research and development group for the Center for Healthcare Improvement at Thomson Reuters.

MEETING THE CHALLENGE

Without many other viable options, so far, hospital executives have largely focused on cost cutting: freezing their capital budgets and cutting into their operating budgets. For the most part, experts say they’ve done a good job at that; in fact, some for-profit hospitals have posted record-setting quarter-over-quarter gains. They’ve made a solid recovery, but there is no indication hospitals have returned to business as usual yet. However, it does appear that they’ve at least weathered the storm, Pickens says.

Still, hospitals can only cut costs and put off expenses for so long, because they must continue to purchase supplies, while the clinical equipment accumulates wear and tear. They can’t keep using the same X-ray machines and hospital beds for the next 20 years. Maintenance and new investments are a must.

“The good news is that the bond market has turned around, so hospitals are now able to get long-term financing at attractive rates,” Blackford says. “In addition, while philanthropy and charitable donations did drop—as expected in a tough economy—they didn’t drop as far as hospital executives feared they might. The public has understood the need to support the healthcare system, especially at the community level.”

Hospitals also have done a good job of managing their labor expenses. When it comes to labor costs, the two easiest (though still painful) ways are to cut wages or decrease total headcount.

“But many hospitals found a third way: reducing their labor expense per discharge by shortening the average patient’s length of stay,” Pickens says. “By getting more people through the hospital faster, they have been able to maintain their operating margins despite a slowdown in revenue growth. And our data shows that they’ve done it by more effectively managing their inpatient care, not by cutting corners. In fact, we haven’t seen any fall-off in terms of the quality of inpatient care; quality indicators such as overall mortality rates have continued to trend upward.”

Going the extra mile to improve their operations, rather than relying on instant fixes such as cutting wages or staff, should continue paying dividends into the future. Hospitals have started to adopt continuous improvement programs similar to those in other industries, such as Six Sigma in auto manufacturing, Blackford says.

“Those efforts aren’t just going to improve them financially, they’re going to improve the quality of care and patient outcomes as well, in terms of things like hospital-acquired infections, patient falls, and nurse lifting injuries,” he says. “If pressed, many executives would acknowledge that there has been a degradation in service. For example, the wait times in the emergency room might be longer, and services might have suffered a bit because all of the departments are staffed a little more thinly.”

Overall, despite the challenges, hospitals have kept a close eye on their quality and found ways to improve their operations, he says.

Umbdenstock agrees, saying that while hospitals have had to make difficult decisions, by and large, they’ve made the best they could of the situation. All hospitals provide certain services that are essential to their communities. To ensure they could continue providing those core services at the highest level of quality, some other things had to go, he says.

“Rather than trimming back on all of their services—thus running the risk of slipping on overall quality—many hospitals just offered fewer services,” he says. “For some of the high-end specialty procedures, the volume just didn’t justify continuing to offer them. People who wanted those services simply had to be referred to larger, regional hospitals.”

HEALTHCARE LEGISLATION

Despite the rhetoric and general confusion surrounding healthcare legislation, many realize the danger of low Medicare reimbursement rates. Increasing the number of patients with access to healthcare is great, but if hospitals lose money on each of them, the system will be worse than it already is.

“A good number of our federal legislators understand the problem, as evidenced by the Senate bill [which at press time was still in the debate process prior to the vote],” Umbdenstock says. “Unlike the bills in the House, the Senate is more sensitive to the problems of linking Medicare rates to a public program, and more likely to provide states with a significant role.”

With so much controversy and dissension surrounding reform, the outlook seems to change almost daily.

“Two months ago, or even two weeks ago, I would have said that healthcare reform would be—at worst—neutral to hospitals, and might even have a favorable impact on them,” Blackford says. “After all, they take care of millions of people who can’t pay for their care every year, so if they suddenly start getting reimbursed for that care, it’s going to help.

“The problem is how that reimbursement is going to be structured. If people who are currently uninsured are pushed into Medicaid, the reimbursement hospitals get won’t be enough to cover the cost of their care. The system will break. I’m very worried about the future of hospitals.”

 

Health plans prepare for legislation to pass

While the U.S. House and Senate wrangle over the final healthcare bill, health plans aren’t sitting idly by waiting for the future to arrive. There are a number of trends plans can expect to affect business in 2010 and beyond.

The economy is still a wild card, but is showing signs of recovery. If the economy does improve, and more jobs are created, then health plan membership will also improve. If the economy doesn’t continue to improve, health plans must be prepared to focus even more on retaining and attracting members, according to Tom Epstein, vice president for public affairs, Blue Shield of California.

“Health plans need to develop products that are easy to understand and administer to prepare for the exchange environment,” he says. “We must also take strong action to hold the line on costs while improving care coordination and incentivizing quality care.”

Epstein says health plans will continue to seek partnerships and try new programs and technologies to improve the quality of care and lower costs.

“At Blue Shield we are piloting a new program with a medical group and a hospital where we all share the risk for providing coordinated care at a lower cost for a major customer,” he says. “Health plans will also bring more processes online to provide faster and more accurate service at a lower cost.”

Teamwork and Talent Drive the ASC of Union County

Teamwork is a way of life for the 21 staff members and 50 physicians at the ASC of Union County, a two-OR, multi-specialty, physician-owned ambulatory surgery center in Union, N.J. At the heart of that teamwork lies a commitment to patient care that exceeds expectations and a family spirit that pervades everything at the center, which opened in 2000. And helping to drive that commitment are two individuals who work as the facility’s dynamic duo — Marcy Sasso, director of operations, and Debbi Holley, RN, BSN, director of nursing.

Nominating the duo for this year’s Who’s Who in Ambulatory Surgery is Glenn Davison, DPM, FACFAS, a board-certified podiatrist who is one of the owners of the center. He credits Sasso and Holley with leading the team to a number of notable achievements, including growing the physician pool and the center’s staff while cutting costs and increasing collections, as well as driving down the infection rate and causing patient satisfaction scores to skyrocket.

“Recruiting physicians is always challenging for any ASC,” Sasso acknowledges. “In New Jersey there are 300-plus ASCs so that translates into most doctors having their own place. We were fortunate in retrospect that our area hospital closed; we hired an outside marketing person to assist with recruitment. In 2008 we were at 80 percent capacity of our 7 a.m. to 3 p.m. block time so that marketing ended. Since then I found that word of mouth to other doctors was really our best means of recruitment. We have had several requests for credentialing packets every month for the past two years. I have a nice marketing packet put together that includes a brochure with our owners’ information, a physicians guide, all of our specific booking forms and criteria, information on our center from transportation to patient instructions, not to mention the give-aways such as letter openers, rolodex cards, sticky notes and pens. We also market all of our credentialed physicians on our Web site, and we place their business cards in our waiting room. When they come to tour the center we promote cross referrals and they meet with one of our financial coordinators to assist in educating their patients about our billing procedures.”

Building relationships is also key to working well with a diverse group of patients, physicians, colleagues, payors and vendors, and Sasso says the secret is “letting each person bring their unique talent and personality to work everyday. Really believing in their talents and bringing out their strengths that may have been dormant.” She adds, “The clinical staff here by far makes a lasting impression on our patients. The patients are greeted with a warm smile and often leave with a great cup of coffee and a hug. Our three administrative staff members multi-task as if they were a team of five and always with a smile and a kind word. They always look for ways to improve patient care and outside office communications.”

Sasso says that what she and her colleagues enjoy about the ambulatory care environment in part is the autonomy allowed by the center’s owners. “It allows Debbi and me to use our creativity, common sense and charitable side to run the ASC of UC so efficiently,” Sasso explains. “Being a smaller facility, we are able to cross-train and be a part of every day-to-day occurrence here. We have the opportunity to get to know our patients and they get to know us. Debbi and I don’t have to micro-manage in any way because when you come to an ASC setting you know you become part of a team and most days we consider our team our second family. It’s a positive and enthusiastic environment that one won’t find in the hospital setting.”

The ASC made a true believer out of Holley, who says, “My background was always in a hospital setting and the fear of joining an ASC was quite scary. I always believed that ASCs took away business from the hospital. When the local hospital closed, I had no choice but to jump in feet first to an ASC. I now see that the ASC has a warm and relaxing atmosphere. Nurses have enough time to spend with their patients to make them feel comfortable. They can have that idle chit-chat and not feel rushed to get onto the next patient.” Holley continues, “ASCs make it easier for the patient from arrival to discharge. Since our OR scheduling is close to or on time, patient scheduling is more convenient for patients and their family members. The patient has a specific OR scheduled time and they come in, their family member can sit with them in pre-op while waiting to go into the OR. After their procedure, the patient is offered coffee or juice cookies or muffins, then they go home. The patients feel more relaxed and comfortable before going in for their procedure and leave in a positive state of mind for a successful recovery.”

Sasso says the center’s team spirit and reliable retention rate are attributable to a number of factors, including treating everyone with fairness, equality and honesty, promoting a true open-door policy, as well as mentoring, coaching and supporting each other.

“A center can only work as well as their team,” Holley says. “To me, I am only one piece of the pie. Without the other pieces, there would be no pie. I feel that I would not be able to run a smooth and efficient center when one piece is missing. Our consistent reputation and positive work environment is cause for employee retention and terrific patient satisfaction. Positive feedback to the staff for all that they do on a daily basis is essential. No one wants to hear only the negative things that happen during the day.

“We also have pride and ownership, and we celebrate our successes,” Sasso says. Those celebrations of success range from an annual holiday party and bonus to a family picnic, staff birthday celebrations and a staff appreciation day, plus employment perks such as a retirement plan, paid health coverage and continuing education for all staff members.

The center had much to celebrate when they achieved accreditation with the Accreditation Association for Ambulatory Health Care (AAAHC). “Due to Marcy’s and Debbi’s leadership, we have received the highest accreditation from the AAAHC for a three-year term,” Davison says.

“Accreditation was something we had been putting off for several years for fear of the unknown,” Sasso explains. “When our medical director, Dr. Thomas Ragukonis told us we were ready and deserved to be in this prestigious category we took his suggestion and plunged in. During the pre-accreditation process we were able to review and improve many of our ‘stale policies.’ We split into sub groups to tackle the process; empowering all staff to take ownership along the way. We repaired some cracks in our foundation and Debbi wrote 65 new policies and re-vamped more than 100. Our staff philosophy has been treating each day as if the inspection were to happen and there is no need to worry when it does. Our two-day survey was intense and thorough, as they ought to be, and during our exit interview they told us that ‘we should be very proud of what we do here’ and we were rewarded with a three-year accreditation. Going through the process was an outstanding learning experience for all staff. Now we routinely review the assessment manual to be sure we keep this prestigious accreditation.”

Davison says that Sasso and Holley “believe in and promote continuing education, and every staff member has attended at least one or more courses last year. All staff members take the BLS course and all of our nurses take the ACLS course which we sponsor right here in the center.”

It is this focus on patient safety that has propelled the ASC of Union County in everything it does, including making ambulatory care the best option for healthcare professionals and patients.

“It is proven by all of the benchmarking statistics that ASC’s provide a cost-effective, top-notch setting for patients as opposed to the standard hospitals,” Sasso says. “The physicians feel that the latest technology is more available here and we are more patient-friendly. The doctors are able to perform more cases in one day here than they would be able to in the hospital. ASCs don’t have the ‘I am a number’ mentality, and patients are referred to by name and are remembered when they return for an additional visit. The infection control rate of most centers is 1 percent or less, and hospitals cannot offer that same optimistic statistic. (Ours, over the past eight years, is less than 1 percent). ASCs typically have better control of the flow over their patients, less red tape than a hospital from the registration process to the patient discharge much faster and fewer mistakes!”

Holley concurs, adding that ASCS must be prepared to face unique clinical challenges such as patient safety practices, especially proper identification. “What we do here is at registration, the patient is asked for the last four numbers of their Social Security number, birth date and a picture ID,” she explains. “In the pre-op area, the patient again is asked for their last four digits of their Social Security number, their birth date, what procedure they are having and where will be the incision site will be. The last four numbers of their social security number is on their identification band. This same list of questions is asked again during the consent period. Another challenge is having the patient bring in a list of medications that they are currently taking in order to complete the medication reconciliation at their time of discharge. Both the nurse and physician must sign the completed form at discharge. ASCs may find identifying the correct patient and information a little more difficult than in a hospital setting but with our process in place, we have not encountered any problems. We feel confident that we have the right patient here for the right procedure.”

Holley says that the ASC enhances patient satisfaction through positive encouragement and communication. “During our pre-op admission we instruct the patient that their discharge instructions and survey is in their envelope and hope that they will help us serve our community better by their comments. When patients are discharged we know something about them and we make a mention about this to let them know we heard them. We wheel or walk out every patient and wish them well. By the time they are leaving at least four people have said goodbye to them. We encourage patients to send back the survey when we make our next day post-op calls. We treat every patient as if they were a family member from start to finish.”

Holley adds that the ASC’s low infection rate is another accomplishment. “The most important part of keeping infections down is hand hygiene,” she says. Nurses must wash their hands immediately before and after touching a patient to prevent cross-contamination. We have constant monitoring; we have a full-time RN trained in infection control who runs in-services and is routinely changing signs in the patient/visitor areas. We also book 15-minute intervals between cases to clean and sterilize the ORs between cases.” Holley adds that in order to prepare for impending inspections, the ASC has a staff member do spot checks to ensure handwashing is done properly, and they also conduct mock surveys frequently to observe and educate staff on potential problems.

Contributing to the ASC’s clinical success is staff’s investment in the center and in their work. “I think ‘team’ and ‘ownership’ are the two words that describe our staff,” Holley says. “Each staff nurse has a specific job that they take ownership of. One nurse will be in charge of all the contracts for the center; it is her responsibility to update expired contracts on a monthly basis. Another nurse is responsible for the QA projects; she does monthly audits and chart reviews. Another staff nurse is responsible for keeping abreast of any OSHA problems and updates. This nurse will give monthly reports on any OSHA criteria. The nurses feel a sense of pride and accomplishment in their specific area. We also have two OR techs in nursing school and the other RNs take time to mentor them.”

Bringing staff together is the ASC’s quality assurance program, which also serves to audit physicians and their time in the OR. “Many book a case for a specific amount of time, and we are detecting some run-over in their allotted time and push other physicians back in their start time,” Holley explains. “This leads to physician and patients becoming frustrated with wait time. To improve patient satisfaction, we need to determine which physicians need extra allotted time for certain procedures. Dialogue between physicians and staff has improved by having an open communication policy. Physicians are asked on a monthly basis if anything needs to be improved or if they need a specific piece of equipment. The physicians educate the staff on procedures that are new or unfamiliar, and physicians allow any staff nurse to observe their cases. And during monthly staff meetings, they are encouraged to think of new ideas to make the center run smoothly.”

“Our staff enjoys coming to work and seeing the patients get well and leave happy,” Davison confirms.

The ASC staff echo this sentiment. Clinical coordinator Kathy Melnick, RN, BA, CCRN, emphasizes, “I have been a nurse for more than 40 years and I have never worked anywhere where the patient satisfaction surveys have come back with such glowing accolades; from the admitting process to the discharge, every staff member tries to make the patient stay as pleasant as possible. The staff prides themselves on a professional, compassionate and friendly demeanor which is demonstrated on a daily basis with every patient. A great percentage of our patients are repeat customers and we hear over and over again how they only want to come here for their procedures! It is an honor for me to be associated with a surgery center that provides exceptional patient care for the surgical patient.”

Jan Marsh, RN, says she appreciates the center’s dynamic environment. “Having worked in a hospital setting for most of my professional career, transferring to the ambulatory setting was a new experience for me. I truly enjoy the atmosphere at the ASC, which is professional yet patient friendly. The doctors and nurses work together as a team to deliver the best possible patient care for every individual.”

One of the center’s orthopedic surgeons, Clifford A. Botwin, DO, observes, “I don’t ever remember any institution receiving the accolades and satisfaction from patients, families and staff that have been attributed the ASC of Union County. Led by an outstanding administrator, Marcy Sasso, and staff this facility although relatively small has been in the forefront of community health and relations in our area.”

The center believes that participating in philanthropic efforts is a worthy way to give back to the community.

“Marcy organized and brought in more than 3,000 brand new toys for the local police holiday drive, and had more than 10 pallets of medical and child care items sent to Louisiana for Hurricane Katrina-related needs,” says Davison.

The local community in central New Jersey also benefited from the center’s generosity through its free health fair held last year.

“Our physicians came out in full support of this endeavor, with more than 15 doctors representing various specialties were available for the over 350 attendees,” says Mary E. Koch, RN, BSN, CNOR, the center’s OR supervisor. “In light of our current healthcare situation, there are many people who have no access to healthcare. This provided a unique opportunity for the public to speak with a physician. This is one of the many wonderful ways we care for our community, from Toys for Tots, Katrina relief supplies, Walk for Autism, and breast cancer awareness. I am proud to work in a surgery center that gives so much to the community in addition to the exemplary care we provide for our patients.”

“At our community health fair we saved and changed more lives in that one day than any of us ever expected,” Sasso says. “I believe you get what you give, so giving back was our motive for the health fair. The local hospital used to put on a health fair and since they closed several years ago the community was no longer afforded that special day. It seemed like the perfect opportunity to market our ASC and give back at the same time. It took just two days to get a commitment from our 15 owners, and we had six weeks to organize the fair. I called every one of our vendors, every local non-profit group, the blood bank, physical therapy, imaging centers, and the local chamber of commerce. The ‘give back’ message took hold with them and we had an overwhelming response. We had our 15 doctors on site talking to the public about their specialties — orthopedics, GI, general surgery, bariatric, pain management, podiatry, gynecology and chiropractic — as well as body fat screenings and all the give-aways a visitor would hope to find at a fair. We had 350-plus guests, gave away four glucomoters, took 185 blood pressure readings, and had 11 blood donors. Giving is so contagious, you can’t help it sometimes. That fair was one of the greatest achievements in my career.”

To read more about the ASC of Union County’s involvement in ASC advocacy and politics, don’t miss the January 2010 issue of SurgiStrategies.

Q&A with Marcy Sasso

What can other ASCs do to emulate the success of your center?

If ASCs strive to continually evaluate their actions and decisions in light of patients’ best care and treatment, they will automatically discover the path to success. Make safety your No. 1 priority, and put it on the agenda for every committee meeting. Monitor your patient surveys closely, as they will be valuable assessment tool; share them with all of your staff and physicians. Our surveys have been outstanding with some wonderful comments regarding our exceptional staff and comfort of our ASC, and 100 percent of our patients have indicated that they would return should the need arise. When we saw a comment about discharge instructions, we immediately held a brainstorming meeting and made a change as to when and to whom instructions were given. If an employee has drive and ambition, take a look at how they can bring additional value to the center. For example, Lauren, our OR tech, mentioned that it would be great to be an OR nurse and really admired our RNs. Mary is now her mentor while she is going to nursing school in the evenings. Our staff attends conferences and we encourage them to share their knowledge. Look inside your team, as you may find the next surgeon just waiting to be mentored!

How do you stay current in the industry?

I read at least nine trade publications weekly, and I have signed up for every “alert” there is. I attend the annual ASC conference and send many of my staff to specialty courses. I forward at least three or four “FYI” e-mails to my center’s owners on a weekly basis to be sure that they are kept up to date in the ASC world.

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