The Time is NOW for Hospitals to Enhance Revenue and Reduce Cost through Emergency Department Optimization

The Emergency Department (E.D.) process is critical for any hospital. On average, approximately 5-10% of a hospital’s total revenue can be attributed to the Emergency Department. And, indirectly the hospital’s Emergency Department accounts for approximately 40-50% of a hospital’s total revenue when considering admissions, laboratory tests, and radiology and other departmental procedures. Frequently, the Emergency Department is a patient’s first experience with a hospital. Short wait times and a positive experience represent important drivers of patient satisfaction. Meanwhile, inefficient processes can result in lost revenues, higher costs and poor community image, not to mention concern over patient safety. Thus improving the E.D.’s patient throughput efficiencies is paramount to both customer satisfaction and a hospital’s bottom line.

Patient throughput time impacts a number of critical differentiators:

• Impacts Quality of Care as long wait times correlate to negative outcomes as well as increase the potential of patients leaving without being seen.
• Impacts Economics of Hospital as patients leaving without being seen is lost revenue, problems with throughput times create overcrowding which could result in patient diversions, and profitability is impacted by service value.
• Impacts External Customers as longer throughput times result in dissatisfaction of patients and families. Satisfied patients become loyal customers who will return for future services AND who will refer friends and family members. Patient satisfaction and loyalty are driven by service value.
• Impacts Internal Customers as service quality is unsustainable without staff satisfaction. Staff retention and productivity is driven by staff satisfaction.

Service value is high when outcomes are excellent and service is caring, safe, complaint and timely. The Emergency Department (E.D.) is the hospital’s front door – making it essential to implement performance management best practices. The current economic conditions are further impacting emergency departments as more and more people lack health insurance or are on government assisted programs and turn to the E.D. as their only source of care.

The increasing demand for E.D. services may result in:
• Long wait times
• Crowded treatment rooms
• Patient boarding in hallways
• Diverted nursing care
• Variable outcomes
• Decreased satisfaction for patients, physicians and staff

The challenge for executives is how to realize and then sustain high levels of performance of an increasingly complex operation without jeopardizing quality, safety and increasing costs. Transformation coupled with performance management provides the framework for a hospital to address these challenges and improve the hospital culture, improve operations, build stronger staff skills, and create visible leadership.

Several things must occur in order to transform your E.D. into the highest quality, most efficient, and patient-centered in the geographic area. They include:

1. Implementing a set of balanced metrics, set goals, and link actions to results through these metrics:
Access: Left Without Being Seen (LWBS); Length of Stay (LOS)
Service: Satisfaction (patient, physician, and employee)
Clinical Quality: Outcomes, deviations, complications; Nursing Turnover; Safety incidents
Value: Expenses per patient day; Charge per case; Pathway variance

2. Changing the operating paradigm
Monitor leading indicators of adverse trends
Show demonstrated improvement in metrics; Launch corrective actions to remove barriers
Perfect performance through continuous improvement
Begin internalization of culture needed to “hold the gains”
Treat this as transformational rather than incremental change

3. Aligning metrics, processes and organizational roles and responsibilities
Ensure process goals and metrics reflect top-level goals and metrics
Align individual responsibilities with key metrics
Provide near real-time information that supports drill-down analyses and automates corrective efforts

Greater Yield can help create a success story that spurs adoption of a new operating paradigm with excellent governance, well-trained, fully compliant staff, a well-resourced, capable E.D. and an environment that focuses on performance and continuous improvement/adaptation. We can help deploy a variety of tools to transform your Emergency Department into the highest quality, most efficient, and patient-centered in the area. We drive reduction in door-to-physician, door-to-discharge, and door-to-inpatient cycle times, while simultaneously improving patient and staff satisfaction. Let us work directly with you to design an approach unique to your E.D. intended to resolve your challenges and yield greater success while expediting the time necessary to complete it.


How wonderful would it be to have a strategic map of the potential impact of change on your organization?

Healthcare organizations vary in their annual goals, their starting points, and their readiness for change. Understanding the readiness of a healthcare organization to accept change, identifying and agreeing on the issues needing to be addressed, and then addressing them effectively and efficiently during implementation is key to a successful architecture transformation. This is often referred to as a Transformation Readiness Assessment. Often, the transformation readiness assessment is underestimated and undervalued. Organizations want to move forward with a sense of urgency to change but may not have taken into consideration the readiness factors that will impact the organization. Examples of readiness factors include: case for change, sponsorship and leadership, accountability, ability to implement and operate, etc.

Events that may create a burning platform for enterprise transformation include a change in leadership, a decline or gap in performance relative to peer organizations, a recognition that the status quo is no longer acceptable, patient and family or user needs and expectations, the changing economic environment, and/or regulatory changes on the horizon.

Some important steps when conducting a transformation readiness assessment may include:
• Assessing the current baseline maturity level for each element on a healthcare maturity model,
• Determining the target maturity level that would have to be achieved to realize the target architecture,
• Determining the intermediate targets achievable in a shorter timeframe
• Assessing the readiness factors, and
• Assessing the risks for each readiness factor and identifying improvement actions to mitigate the risk

When preparing for change an organization must define its change management strategy, prepare its management team, and develop its sponsorship model. There are several tools available to help assess readiness, as well as qualitative information from internal or external staff and consultants. If an organization can start building a positive and supportive environment prior to a change, they will have a great head start on the transformation implementation. The change vision can be turned into an overall plan and timeline with input solicited from people who “own” or work on the processes that are changing. Gathering information about and determining ways to communicate the reasons for the change is critical to securing understanding and support for the vision, goals and objectives. People have to understand the context, the reasons for the change, the plan and the organization’s clear expectations for their changed roles and responsibilities.

The most successful transformation occurs when executives mobilize and sustain energy within their organizations and communicate their objectives clearly and creatively. Executives further improve their chances for success if they significantly raise employee expectations, actively change people’s behaviors, and engage the attention of individuals at all levels of the organization, from top management to the front line. Preparation, engagement and leadership are pivotal to implementing a roadmap to success. Business transformation will entail new ways of working, reconfiguring of people and competence to delivering strategic objectives, new ways of influencing and supporting business change, and ultimately a way of thinking and operating.

Confusion soars when people deal with enterprise change. Tasks, work outputs, organizational structures, relationships, business process links, skills, roles, responsibilities and technology across multiple business units are all affected. A correctly done transformation readiness assessment will ensure an organization has assessed the potential impact of change to their organization’s processes, systems, patients, physicians, customers and staff. If you are interested in learning more about transformation readiness assessment or have some experiences to share we would like to hear from you.

How Important is it to Measure Physician Practice Performance?

Efficient processes require less time, effort and resources to produce better outcomes.  Recognizing that staff in medical practices are already running very slim, and the labor of additional projects may be difficult to take on, it is important that practices create lean physician practices by examining processes, eliminating waste, using the most highly trained staff members to perform tasks only they can perform, and identifying revenue opportunities to yield gains in productivity, patient satisfaction, and quality of care.  Most problems within a practice can be traced back to a process problem as opposed to a people problem.

There are several opportunities to improve financial performance through practice transformation.  Some may include practice profitability (revenue and cost), practice referrals, practice “right sizing”, IT strategy, improved payer positioning, service portfolio by market, fee schedule/price negotiations, and best practice sharing.

Revenue is optimized by increasing and balancing both capacity and demand.  Provider productivity is the lever on capacity.  Revenue events and capture are the levers on demand.    Three major strategies for driving enhanced revenue performance are improve productivity of billable resources, increase billable events and capture rate, and add new billable services. There are a variety of levers in the practice that are used to execute these strategies.   These include ancillary services, billing and collections, coding standards, income distribution, physician extenders, population management, process optimization, and resource utilization.

There are three primary strategies to address the two major components of practice cost.  Practice cost management strategies include expense management of general operating cost, process optimization and resource utilization of support staff cost.

Physician practices face significant challenges with execution:  Prioritizing physician strategic goals, objectives and allocation of funds can create conflict during the implementation process.  Needs of the primary care physicians and specialists may vary.  Objectives such as growing margins, expanding the funding base for future needs, changes to governance and structure, market share growth, increased patient referrals, utilization, expanded clinical services, information technology infrastructure, and improved community access emphasize the need for physicians to enhance high quality and efficient patient care.

Successful physician practices understand and measure their practice performance and are mindful that there are four perspectives on Value in a Practice that should be considered.  They include: 

  1. Patient View:  Convenient access, Caring Environment, Efficiency, and Health status
  2. Physician View:  Quality of care, Practice income, and Personal time
  3. Health Plan View:  Quality of care, Access, Cost of care – both short-term impact and long-term trend
  4. Health System View:  Quality of care, Referrals to system, Practice profitability, and Competitive position with payers

 How does your practice measure in these perspectives on Value?

Transforming the Healthcare Landscape

While increasing economic alignment between hospitals and physicians is a reality of the marketplace, most hospitals have yet to achieve broad alignment across their physician base. With the current national emphasis on healthcare reform and significant changes in reimbursement on the horizon, there is both a compelling need and a tremendous opportunity for healthcare organizations wishing to close their remaining alignment gap as rapidly as possible.

According to a nationwide survey of healthcare senior executives, a key determinant of success for hospitals and health systems is physician alignment.  A high level of alignment between physicians and healthcare leaders implies:

  • Common understanding of mission and vision
  • A highly adaptive and transformative culture
  • Agreement of key goals and objectives
  • Consensus on critical priorities
  • Willingness to focus energy on those priorities

Alignment as defined has been difficult to achieve given the increasing time demands and financial performance pressures placed on all parties.  But, it is certainly worth the time and effort as the survey findings indicate:

  • The better the alignment, the higher the revenues and the lower the costs.
  • The most important alignment indicator leading to revenue growth is physician involvement in strategic decision making.
  • Hospitals and health networks with above-average alignment claimed 13% positive impact on annual revenue growth year over year.
  • Sixty percent of respondents felt their physicians were not sufficiently aligned with the institution regarding clinical quality.
  • The top three priorities for hospitals and health systems as focus areas for improved alignment are: clinical quality, utilization management and service line excellence.

Many factors go into aligning hospitals and physicians.  Six key areas of alignment are:

  1.   Recent trend in relations between a hospital and its physicians – Hospitals scoring well in this area already have a culture of cooperation that lends itself to higher overall performance.
  2.   Current state of alignment – A closely aligned hospital-physician team has shared goals, understands what actions must be taken to achieve those goals, and works toward them with clearly defined metrics which enable them to track progress.
  3.   Status of a formal alignment plan – Successful hospital-physician alignment does not happen by accident and requires a formal plan in place.  While the elements of an alignment plan may vary considerably from one organization to another, there are several elements important to any successful plan.
  4.   Physician involvement in strategic decision making – The need for physicians and hospital executives to work collaboratively is hardly new.  Although every market is different, there is a fast growing trend to more economic alignment among hospitals and physicians.
  5.   Physician engagement in care improvement programs that support clinical quality, patient safety, and efficiency – The demand for better coordination of patient care requires re-engineered clinical and operational processes that require a level of commitment that cannot be achieved without well-conceived strategies to address culture transformation and enhanced alignment.
  6.    Degree to which referrals stay within the hospital or system – If physicians refer or take patients outside the system, it can often be a reflection of physician frustration and should be viewed as an opportunity to focus attention on areas where improvement may be needed.

Hospitals and health systems embarking on major initiatives will benefit greatly from careful consideration of physician alignment and the cultural dimensions of transformation—both early in the planning process and throughout the life of the initiative.  I believe that those organizations that most effectively address alignment and culture are likely to be most successful in the execution of such initiatives.  What are your thoughts?