#2 EMERGENCY ROOM OPERATIONS IMPROVEMENT/REENGINEERING Scenario: Our client, a large academic medical center in a major metropolitan area, has

hired Deloitte & Touche Consulting Group to reduce expenses in their Emergency Room. They have identified the ER as one of their highest costs departments, and have set a target of reducing operating costs by 25% within two years. They would like our assistance in identifying the opportunities for cost reduction, redesigning the operations to eliminate the costs, and implementing the changes. How would you structure an approach to this project? Additional Information Our clients ER operating costs are approximately 40% higher than other ERs in the local community hospitals, but only about 10% higher than other benchmark academic medical centers Many of the local homeless people utilize the ER as a primary care clinic, i.e., they come in when they have colds, cuts and bruises, or just need a meal or a place to sleep There are no urgent care centers or physicians offices that are open nights or weekends within a 10 mile radius The ER is staffed with highly skilled, licensed personnel (e.g., residents, attending physicians, and nurses), that see every patient that comes to the ER. They have not considered using Nurse Practitioners to see less critical patients or Patient Care Technicians to assist nurses and physicians with simple tasks that do not require licensed personnel (e.g., assistance with personal hygiene, simple bandage changes) Use of residents in the ER leads to a high level of testing for many patients with routine complaints Case Discussion This is a fairly straightforward case to assess how well the candidate can peel the onion. The candidate should first attempt to determine whether the clients 25% cost reduction goal appears reasonable. They should mention analytic approaches such as benchmarking and a high level review of workflows and patient flows. Once they determine that based on benchmarks it will be difficult to reduce operating expenses by more than 10%, they should mention that a more radical approach will be required if the client still wishes to eliminate the full 25%. Areas to explore to achieve the first 10% include: 1. Potential to reduce staff based on staff levels versus benchmarks 2. Matching staff to workload by time of day

3. Identifying opportunities to improve skill mix by substituting less costly staff as 4. 5. 6. 7. 8. 9.

appropriate Ability to streamline workflows, leverage technology, etc. to create opportunities to reduce staff further Number of management layers Potential to have more experienced physicians review resident orders to eliminate unnecessary testing Improved triage to identify patients that need to see a doctor versus a lesser skilled provider Improved triage to identify patients who could be encouraged to see their own physician the next day in a less costly setting Ability to reduce purchase price of supplies and pharmaceuticals

10. EMERGENCY ROOM OPERATIONS IMPROVEMENT/REENGINEERING

(cont) Areas to explore to achieve the next 15% include: 11. Developing a fast track system for patients with colds and minor injuries that could be seen by a nurse practitioner instead of a physician 12. Opening one or more urgent care centers in the community to reduce ER visits by non-critically ill patients 13. Developing revenue enhancement opportunities such as opening 23-hour observation beds to generate ER revenues and simultaneously reduce costly admissions from the ER to inpatient units for patients that require extended monitoring (e.g., dehydration, rule out heart attack)