Everything changes except one: Field still focused on cutting costs

Managed care, technology, anesthesia revolutionize same-day surgery

The year was 1968. A barber had two children who needed adenoidectomies. It would take all of his income from about 250 haircuts to pay for those two procedures, he told his health care providers. That statement about cost made a lasting impression on Wallace Reed, MD, and his partner, John L. Ford, MD. And as a result of their concern about the costs of surgery, they developed the first successful multispecialty surgery center in the country that was unaffiliated with a hospital. (See "Industry Advances: We’ve Come a Long Way," p. 40.)

Concerns about costs have permeated the industry since the beginning, says Tony Carr, president of Fresno, CA-based Health Pacific International, advisors in surgical services and women’s health services. Carr opened the Fresno Surgery Center in 1984 and a recovery care facility, the Fresno Surgery and Recovery Care Center, in 1988. The recovery care center converted to hospital licensure in 1991 and became the nation’s first surgical hospital.

"Cost containment has come easy to the industry because as an industry, from the very beginning, there was very strong emphasis on keeping costs down to keep prices down," Carr says. He laments, however, that in recent years, cost pressures have become severe due to managed care.

Others in the industry agree. In fact, when Same-Day Surgery readers were asked in the 1996 reader survey to list the single most important issue that has affected same-day surgery in the past 20 years, the top two responses were managed care (28% of respondents) and cost pressures (27%). Other important issues mentioned were laparoscopy/ endoscopy technology (22%) and advances in anesthesia (19%). (See 1997 SDS reader survey inserted in this issue.)

Ironically, same-day surgery providers were trying to convince payers, patients, and even some physicians that same-day surgery was a good idea 20 years ago. Today, providers are trying to hold back the floodgates as 70% of all surgery procedures are performed on an outpatient basis, based on estimates by SMG Marketing Group in Chicago. (See Projections of Surgical Procedures in the United States, 1981-2001, p. 41.)

Advances in technological and anesthesia techniques mean more procedures can be performed on an outpatient basis, and those patients can have a shorter length of stay. Laparoscopic procedures and the administration of propofol, versed, sevoflurane, and desflurane have led to discharge times that were unthinkable 20 years ago. (For more information on anesthesia developments, see SDS, October 1996, p. 109.)

To provide a perspective on how the industry has changed over 20 years and what those developments mean for same-day surgery programs, SDS interviewed some long-time same-day surgery managers. Here are their thoughts:

Cost pressures have led to new levels of efficiency with supplies and equipment, including standardizing supplies and group purchasing.

With the upcoming prospective payment system for outpatient surgery services, same-day surgery programs are going to have to put cost controls in place, warns Penny Dykstra, RN, director for emergency, observation, and outpatient surgical services at St. Joseph’s Hospital of Atlanta.

"We need to be ready for that. We can’t sit back and wait until it happens to get ready," she says. "We need to get cost down before we’re faced with it. We need to participate in large buying groups and keep inventory to a minimum so cash flow is kept under control and we’re not warehousing products."

In the past, same-day surgery programs could obtain whatever supplies they wanted from any vendor they thought had the best price, says MaryAnn Edwards, RN, CNOR, supervisor of ambulatory surgery at Henry Ford Health Systems in West Bloomfield, MI.

Now, with group purchasing, "we’ve lost some of our autonomy," Edwards says. But that change isn’t necessarily a bad one, she says. "It can bring costs much more under control," she says.

Standardization has become the watchword for buying supplies in the ‘90s. With cooperation from nursing and medical staff, standardization of supplies has resulted in significant cost savings — but approach is everything, Carr emphasizes.

"If you involve people in solving problems, they’ll make compromises," he says. "But if you tell people, ‘We’re going to shift and buy XYZ sutures,’ then there’s resentment."

Henry Ford has been successful in getting same-day surgeons to agree to standardize several types of supplies, including intraocular lenses and screws, and by doing so, the ambulatory surgery program has reduced inventory, Edwards says. In addition, a distributing house delivers general surgical supplies in two days instead of two to three weeks, which has significantly reduced the need for having extra inventory on hand, she says.

New equipment purchases also are scrutinized, Edwards says. "It used to be that physicians would say, ‘We want to try this,’ and we’d get it for them," she says. "Now we ask, ‘How is this going to add value to your patients?’ We’re not just letting them order anything they think they might want."

Same-day surgery programs are much more sophisticated and businesslike due to cost pressures, Carr says. For example, programs are using computer systems to document quarterly supply costs.

"They’re paying attention to detail, which I think has helped improve the overall management and operations," Carr says.

Cost pressures have caused same-day surgery programs to move toward using unlicensed assistive personnel and staff cross-training.

In the past, many same-day surgery programs have prided themselves on having an all-RN staff. These same programs are now eyeing less expensive personnel.

"We’ve been getting a lot of pressure to add unlicensed personnel to the staff due to costs," Edwards says.

Cross-training has been widely adopted in same-day surgery programs as a way to reduce staffing costs. "Cross-training provides an opportunity for greater efficiency and, if done right, job enrichment," Carr says.

The outpatient surgical services department at St. Joseph’s doesn’t hire anyone who isn’t willing to be cross-trained in other areas, Dykstra says. For example, patient care technicians, RNs, and medical assistants are cross-trained to perform phlebotomies.

"It gives us more flexibility for peak times of the day," Dykstra says. (For more information on cross-training staff and other upcoming trends, see story, p. 42.)

Managed care cost pressures have led to benchmarking and the collection of outcomes data.

Managed care is beginning to put more emphasis on measuring outcomes of same-day surgical services, but that emphasis doesn’t mean the pressures are lessening on the cost side, Carr says.

"I think that shift is exciting, because it provides our industry an opportunity to say we are less costly — our prices are less, and our quality is higher," he says.

Dykstra agrees. "We’re moving from a market that’s price-competitive and moving toward a market that’s value- competitive," she says. To be able to prove its value, St. Joseph’s submits benchmarking data to the Center for Health Care Industry Performance Studies in Columbus, OH.

If a same-day surgery program can improve its performance, it often can lower some of its costs, Edwards says. For example, Henry Ford is looking at its orthopedic cases to identify best practices. The object is to reduce nursing time and physician time and thus cut costs.

"There will be good that comes from it, and that good will be that we’ll be able to identify some best practices and do things in a more organized process, instead of everyone having their own way to do things," Edwards says.

However, she expresses concerns that as same-day surgery programs identify benchmarks and best practices, some patients won’t fit the mold.

"Are there provisions for that?" she asks. "Some people fall out of the guidelines, or they have an unusual disease. It’s expensive to take care of those people."

Still, best practices have made same-day surgery what it is today, Edwards points out. Consider cataract patients 20 years ago, for example.

"They lay in bed for a week with sandbags around their heads," she says. "Now they go home an hour after surgery, and they can see. That came from looking at best practices and what works. We have really improved care."