Hospitals likely will see a large influx of new patients as health care reform goes into effect, and should implement measures to streamline patient flow to accommodate those new patients without the need for additional beds, according to an expert in health care efficiency.

With efficient management, U.S. hospitals should be able to achieve at least an 80%-90% bed occupancy rate – at least 15% higher than the current average – without the need to add beds, which costs around $1 million per bed, said Eugene Litvak, president and CEO of the Institute for Healthcare Optimization in Newton, Mass.

To achieve that level of efficiency, hospitals need to manage elective admissions, Mr. Litvak said in an interview. "We analyzed well over 100 hospitals around the world, and elective admissions are more variable and less predictable than arrivals to the emergency room," he said.

Mr. Litvak and Maureen Bisognano, president and CEO of the Institute for Healthcare Improvement in Cambridge, Mass., coauthored an article in Health Affairs (2011;30:76-80) laying out a blueprint for increasing hospital efficiency to meet the increased patient needs created by health care reform.

According to Mr. Litvak, the vast majority of admissions to the hospital come either from elective admissions or from the emergency department. Perhaps surprisingly, almost all of the volatility stems from elective admissions, not from emergency admissions, he said, adding, "when you have a peak in elective surgery, they take over the beds," causing a logjam in the emergency department.

If a hospital is well managed, hospital bed occupancy fluctuates about 10% or 15% between its highs and its lows, Mr. Litvak said. If a hospital is poorly managed, however, it can fluctuate as much as 80% from its highs to its lows, he said.

Extreme deviations in bed occupancy can cause medical errors, as nurses become short-staffed and overworked during times of vastly increased occupancy, Mr. Litvak said. Patient satisfaction and staff satisfaction also suffer, he said.

To better manage hospital bed occupancy, Mr. Litvak suggested several steps. First, he said, hospitals should create separate rooms for scheduled and unscheduled surgery. This enables the institution to determine how many operating groups are needed without being overstaffed.

Next, surgeons from different specialties should be asked as groups to perform similar numbers of surgeries each day, Mr. Litvak said. For example, one orthopedic surgeon could perform several surgeries in one day while a colleague might have a light surgical day; the next day, those two – or others in the same specialty – might switch off, he said. Once the surgery schedule has been "smoothed," the hospital can determine with some accuracy how many beds are needed on the floor, Mr. Litvak said.

"What happens when you smooth those peaks?" he asked. "You can afford a much higher census without hitting the ceiling" and producing overcrowding.

These techniques can provide a 5% increase or greater in surgical volume while reducing operating room staff overtime by 50%, he said.

At Cincinnati Children’s Hospital, where Mr. Litvak helped to implement this system, the hospital had an average census of 76% prior to the changes. "Compared to the U.S. average, they’re in pretty good shape," he said.

But after the "smoothing" of the surgical schedule, the hospital has an average census of 91% – "and they’re not overcrowded," Mr. Litvak said. "If you know the average length of stay and number of surgeries, you can go well above 95%."

Following the changes, surgical volume at Cincinnati Children’s Hospital Medical Center rose by 7% annually for at least 2 years, with no increase in staff, according to Mr. Litvak, who also said the hospital expects to generate $137 annually in additional revenue as a result of the higher patient throughput, and has realized savings of $100 million in avoided capital costs. Quality of care also improved, he added.

Other hospitals have seen improvements using similar systems, he said. For example, after Palmetto Richland Hospital in Columbia, S.C., started performing scheduled and emergency surgeries in different operating rooms, surgical volume increased 3% and weekday waiting times for nonelective surgeries decreased 38%. In addition, "anticipated efficiencies could add $8 million to its annual margin while improving services to patients," Mr. Litvak and Ms. Bisognano wrote in Health Affairs.

If the 5,700 hospitals in the United States achieved just 10% of the financial improvement that Cincinnati Children’s Hospital achieved, they would save $57 billion in avoided capital costs, the authors wrote. Assuming that the currently uninsured population will have hospitalization rates similar to the rates of the insured population, an increase in average hospital bed occupancy from 65% to more than 80% would be enough to provide hospital care for 40 million Americans who currently lack health insurance, they wrote.

Mr. Litvak said these strategies can help hospitals cope with the anticipated influx of newly insured patients without needing to expand. "There is no need to build those beds if you’ll only address these issues," he said, adding, "there’s absolutely no way you can cover the uninsured without doing this."

Hospital Occupancy Can Be Increased With Improved Surgery Scheduling