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The value proposition of health care reform is simple: Greater collaboration will result in better care for less money. So far, the attention has been on cutting the cost of chronic disease. But in the hospital, one of the biggest challenges lies in the operating room.

Surgical services account for about two-fifths of hospital expenses and more than two-thirds of hospital income. At the same time, surgery is a considerable source of outcome risk. If collaboration falters in the OR, hospital-led accountable care organizations will be unable to deliver fully on the "more for less" value proposition.

What is standing in the way? A century of poor relations between hospitals and surgeons.

For nearly a hundred years, surgeons and hospital executives have not played well together in the surgical services sandbox. Surgeons have a reputation for demanding the latest technology, easy access and excessive staff support with no regard for cost. Administrators have had little choice but to meet surgeon expectations or risk losing valuable business. This "relationship" has led to high costs, low productivity and mixed quality.

To make accountable care work across the enterprise, hospitals must develop a collaborative dynamic in the OR. Fortunately, an effective model is as close as the nearest surgery center.

A Time-Tested Model

Hospital leaders typically see surgeon-owned ambulatory surgery centers as a competitive threat. But if you focus only on market rivalry, you will miss a valuable point: ASCs prove that surgeons can take a responsible approach to managing a surgical services organization.

Although it is well-recognized that surgeon-owned ASCs provide service to a select group of patients, these facilities run with incredible efficiency. They maintain high levels of quality and productivity and deliver excellent surgeon and patient satisfaction. They also are profitable, despite receiving much lower reimbursement per case compared with hospital ORs.

This time-tested model of surgeon leadership is the kind that hospital ORs now need. The good news is that hospitals can replicate much of the ASC dynamic. The key is to let surgeons take on a much more active role in managing the OR through a surgical services executive committee.

An SSEC is a multidisciplinary OR governance committee that hospital administrators and the hospital board of directors sponsor. An effective SSEC is led by clinically active surgeons as well as representatives from anesthesia, nursing and senior hospital administration. Typically, surgeons make up more than half the membership of the committee.

An SSEC is not a medical staff-sponsored surgery committee. It is a true operational board of directors for the OR that directs front-line operations. Key activities include reforming the block schedule and staffing models to ensure better surgeon access and high utilization, reworking perioperative processes to ensure quality and efficiency, and creating a strategy that builds OR business by serving surgeons better.

Results from hospitals across the nation demonstrate that a well-designed SSEC can break down operational barriers and transform any OR into a data- and value-driven organization.

Works in Many Settings

One exciting thing about surgeon-led collaborative governance is that it works in many different kinds of hospitals.

I recently visited a community hospital in the South with serious OR problems. Poor schedule access and low efficiency led to low utilization, a high cost structure and declining case volume. In 2010, the hospital created an SSEC with a mix of surgeons and other clinical and executive leaders. The committee collaborated to develop a more efficient block schedule and to redesign perioperative processes. Within one year, access problems had been eliminated for the surgeon staff. Surgeons also enjoyed a more efficient working environment and better nursing support. Overall utilization increased from 48 to 73 percent, with an 8 percent increase in monthly case volume.

Large university hospitals also can benefit from surgeon governance. At an academic medical center in the Northern Plains, poor pre-op processes were leading to numerous cancellations and delays. Three years ago, the center established an SSEC that brought surgeons together with their colleagues in anesthesia, nursing and hospital administration. One of the committee's first initiatives was to create a dedicated pre-op clinic with a consistent assessment process. Within approximately one year, first-case delays were reduced by 60 percent and same-day cancellations were cut in half. These improvements supported higher utilization, helping to control costs and improve overall financial outcomes.

Many hospitals have found surgeon leadership critical to improving clinical quality and outcomes. A large urban hospital in the Midwest suffered from multiple problems in OR efficiency and clinical performance. In 2009, surgeons and other stakeholders came together in an SSEC to tackle these challenges. The committee pushed for a culture of safety, including the use of aviation safety principles and the adoption of the World Health Organization's surgical safety checklist. The OR achieved broad improvements in efficiency and costs associated with significantly improved quality and safety. It is difficult to determine precise causes, but the total effort improved clinical outcomes. As evidence, surgical patient length of stay was reduced by 11 percent.

In the last example, collaboration-driven improvements made a big difference to hospital financial performance. Within two years, surgical volume increased 22 percent and the hospital's surgery market share grew 3 percent. During this period, the hospital's net income more than doubled.

Why It Works — and How It Can Fail

The SSEC model works because it gives surgeons a defined, major role in the collaborative oversight of surgical operations. In most hospitals, surgeons do not have a sense of ownership of the OR — but they do see it as a necessary resource. Involving surgeons in collaborative governance allows them to balance their needs for quality, access and service with the hospital's need for improved productivity. Under an SSEC, surgeons now see themselves as both owners and valued customers.

One avenue to success is providing the SSEC with accurate and extensive data on quality, operations and costs. When they have reliable data, surgeon leaders almost always make wise decisions about the OR. In fact, the only time collaborative leadership fails is when hospital administrators falter in their support of the SSEC.

Not long ago, I helped a specialty hospital in the East establish an SSEC. The committee created a collaborative environment within the surgery department and achieved significant improvements in efficiency, productivity, costs and quality. Pleasing everyone is impossible, of course, and one surgeon disagreed with a certain change enacted by the SSEC. He complained stridently to hospital administrators. Finally, instead of supporting the governance committee, the administrators backed down and overrode the SSEC decision. Several committee leaders stepped down in frustration, and the SSEC was nearly dissolved. The committee is now rebuilding, but the OR as a whole lost progress.

The lesson: Hospital leaders who create a physician governance committee must not succumb to end-around maneuvers from individual surgeons. An SSEC's consensus on operational issues must be binding.

What We Know

There is little proof that accountable care actually works. There is even less proof that it can work within a hospital surgery department. What we do know is that if accountable care is to succeed in the OR, surgeons and hospital leaders must work together to manage resources and quality. Effective collaborative leadership is the only way to bend the cost curve in surgical services.

Thomas Blasco, M.D., M.S., is an anesthesiologist/intensivist and a managing partner of Surgical Directions in Chicago. He also serves as medical director of the Illinois Sports Medicine and Orthopedic Surgery Center in Morton Grove, Ill.