Many years ago, when I was first given responsibility for a major project spanning multiple organizations, I quickly realized that I knew little about project management.  Easy, I thought, I’ll just arrange a two-day course for our department and we’ll be all set.  As the end of our training session approached, I sadly realized that the course offered no help on the biggest problem I faced: The people, assigned to my project by other departments, just weren’t devoting the time to my project that had been promised by their managers.  Not surprisingly, my project started missing its milestones, I grew progressively more frustrated, a lot of finger-pointing ensued, and progress slowed.  My projects succeeded if they were sufficiently small so that I controlled all the resources, but problems inevitably surfaced in projects staffed by people from more than one organization.

In the late 90s while working at Integral, a consulting firm, I learned that many of our clients experienced the same problem: late projects and frustrated staff.  In fact, as I learned, it was the result of project overload.  Project gluttony we called it.  We found many firms that had taken on more than twice as many projects than they could properly handle and these projects were inevitably late.

Fortunately, we had been brought in to solve the problem by applying a solution devised by Integral’s founders, two well-known professors at the Harvard Business School.  The remedy boiled down to“less is more.”  By reducing the number of projects to a manageable level, our clients’ output began to rise.  What’s more, it was the “right” kind of output because they were now prioritizing their projects according to their strategy.

How did we accomplish this transformation?  We first worked with our clients’ executives to help them express their strategy in some readily understandable form.  Although this was not easy, it was the next step that was really painful – getting managers to agree on the projects to be dropped.  However, I was always amazed that, once the managers got the hang of it, the process moved rapidly.  Then, to stay on the diet, the clients’ management teams tracked projects and assignments to avoid overload.  Projects could not be initiated until resources were available.

Hospitals – and perioperative systems in particular – also suffer from project gluttony.  And it turns out that applying this solution is more challenging there than in engineering, packaged consumer goods and banking organizations where the solution was initially applied.  Why?  There is less experience with project management, and most clinicians have day jobs.  They are thus forced to work on improvement projects when they can fit them in.  By contrast, most other industries have the flexibility to make improvement projects a temporary “day job.”  Paradoxically, another barrier in hospitals is the current pressure to perform many Lean projects.  I don’t dispute the need for clinicians to learn how to do Lean; I believe, however, that improvement projects, regardless of methodology, should be undertaken only if they fit into the hospital’s portfolio.

Despite these challenges, I am confident, that the method can be readily adapted to hospitals.  In fact, along with Kathy Brooks, Vice President of Jackson Surgical Assistants, I have written an article on how to apply it in the perioperative system.  The article, entitled “Performance Improvement in the Perioperative System,” appeared in the December issue of Healthcare Financial Management. In it, we introduce a strategy map for the perioperative system and use it as the starting point for portfolio building.  We then show how to build a portfolio, illustrating it with a variety of projects.  We include both clinical projects such as reducing complications and operational projects such as reducing costs.  In each case, we provide suggestions on how to staff the project and how long it should take.  Finally, we describe a simple spreadsheet tool that can be used to avoid project overload.

Please contact us if you would like a copy.

In my post on May 5, I discussed the apparently dismal economics of reducing hospital-acquired infections. I showed why hospitals may not have a financial incentive to reduce hospital-acquired infections.  However, because hospitals have a moral and ethical incentive to saves lives and to prevent suffering, they face a dilemma: by doing the right thing they suffer financially.  Sadly, many leaders in health care are not aware that they face this choice.

How to deal with the dilemma is described in an article entitled “The Impact On Hospitals Of Reducing Surgical Complications Suggests Many Will Need Shared Savings Program With Payers,” published by Health Affairs on October 17, 2012 as Web First, and to appear in the November print issue.  My co-authors are Warren Sandberg of the Vanderbilt School of Medicine in Nashville and Bill Weeks of the Geisel School of Medicine at Dartmouth College.  We demonstrate that, when you perform the hospital’s business case for reducing complications, you need to distinguish between situations in which the hospital’s inpatient caseload is growing and in which it’s not growing.

Let’s start with the “no growth” scenario, which is the one I described in my earlier post although I did not draw attention to the no-growth assumption.  You’ll recall that the hospital may suffer a negative cash flow because its small savings, mostly attributable to supplies and materials, may be swamped by the loss of reimbursement revenue  for the excess care associated with complications.  In this case, the payers clearly benefit from the hospital’s initiative in doing the right thing, while the hospital suffers a negative cash flow.

What happens in the “growth” scenario?  To arrive at the answer, first consider what happens in the surgical unit as the complication rate drops: Empty beds begin to appear as patients with complications are “converted” into patients without complications.  This capacity creation has been known and talked about, of course.  Our contribution is to show just how much extra capacity is created – it can be much more that you might think – and to put a dollar value on that capacity if the hospital is able to fill all those emptying beds.  It turns out that the financial payoff can be very attractive.  Using typical numbers for a hospital that performs 10,000 inpatient cases annually, the annual cash flow increase comes to over $1 million for each 1 percent drop in the complication rate.  For the numbers, assumptions and additional details, I encourage you to read the article, including its online appendix.

For hospitals whose inpatient volume is growing rapidly enough there’s no dilemma: Keep reducing complications and grow your revenue.  But most hospitals’ inpatient case load is unlikely to be growing.  They do indeed face a dilemma.  What should they do?  We recommend they negotiate an agreement with their payers to share in the gains.  Although our article doesn’t describe how to conduct the negotiations, it does describe how to arrive at the numbers that should serve as the basis for the talks.

The September 2011 issue of Consumer Reports carries report cards on the quality of CABG procedures performed by 324 groups/hospitals.

Ratings of one, two or three stars,  corresponding to performance below, at and above average, are based on performance in 11 categories (e.g. risk-adjusted mortality after CABG, antiplatelet medication at discharge and percentage of procedures performed using an internal thoracic artery).  A 2010 article in the New England Journal of Medicine (NEJM) describes the program (http://www.nejm.org/doi/full/10.1056/NEJMp1009423).

The rating system was developed by the Society of Thoracic Surgeons (STS) whose web site includes more details on individual ratings (http://www.sts.org/quality-research-patient-safety/sts-public-reporting-online).  The methodology, endorsed by the National Quality Forum, is based on a registry of about 90% of approximately 1100 U.S. cardiac surgery programs.

When Consumer Reports published the first set of ratings in October 2010, the NEJM article, cited above, called the public disclosure “a watershed event in health care accountability.”

I believe that this year’s report, based on data running from July 1, 2009 to July 30, 2010, is particularly significant because the number of groups/hospitals that have chosen to go public has increased by more than 100, and because five groups/hospitals with below-average performance had the courage to disclose their report cards.

My disappointment lies in the absence of reports from many famous institutions – Massachusetts excepted – and the lack of analogous report cards for other specialties, such as orthopedics and vascular surgery.  I had hoped that their respective societies would have followed the lead of the STS.

As a consultancy devoted to helping our clients create high-performing perioperative systems, Twin Peaks Group applauds the initiative of the STS and the two-year trend in public disclosure.  We believe that hospitals should measure and publish risk-adjusted outcomes.

With that in mind, how gratifying would it be if next year’s announcement in Consumer Reports listed report cards for 500 groups/hospitals, and revealed that this year’s one-star performers had added one or more stars?

At the recent meeting of the American Association of Clinical Directors (AACD), I learned that the American Association of Anesthesiologists (ASA) had set up the Anesthesia Quality Institute (AQI) (www.aqihq.org).  The Institute’s vision is to become “the primary source for quality improvement in the clinical practice of anesthesiology,” while its mission is to establish and maintain the National Anesthesia Clinical Outcomes Registry. (I could put in all the acronyms but it would make your eyes glaze over).

If this sounds to you like a cousin of the National Surgical Quality Program (NSQIP), you’d be almost right: Having observed NSQIP, Rick Dutton, MD, AQI’s Executive Director, has taken a different approach to membership and to the collection and analysis of data.

Because storage capacity is infinite and because bandwidth will continue to increase, he decided that the system should collect all reasonably useful data on all cases of participating institutions; moreover, that membership should be almost free.  (It’s subsidized by the ASA).

After you sign up, “pipes” are set up to channel your data – de-identified – into a massive data base.  The choices made by Rick allow for flexible, but potentially complex, analyses.  By contrast – and probably for good reasons – NSQIP collects carefully defined data on selected cases (only), and requires that data be checked by a full-time assessor, who is trained and periodically re-qualified by NSQIP.

It’s gratifying that the ASA has set up the Anesthesia Quality Institute.

When it comes to surgery, anesthesiologists feel particularly responsible for post operative nausea/vomiting, and for pain.  In recognition of this, the data collected and adjusted by the Institute will permit benchmarking on those two quality dimensions.

Now, all that we need is a joint program – one that combines NSQIP and a subset of the data from the Anesthesia Quality Institute.

After all, anesthesiologists’ complications are indistinguishable from those of surgeons from the perspective that matters most: the patient’s.