Growing Operating Room Contribution Margin:
Lessons from the Airline Industry
The OR is a hospital’s largest revenue source, but block time often goes unfilled.
Can overbooking help?
Software vendors provide solutions that use machine learning to identify block time likely to go unused. Finding more time, getting it released earlier, and getting it into the hands of those who can use it are all excellent reasons for adopting such a solution. Hospitals can make real gains with this approach.
However, in most compensation scenarios, a surgeon has a financial incentive to hold on to any OR block time allocated to them. Although some portion of unused time is collected via proactive nudge reminders and the ad hoc efforts of the scheduling team, diverging incentives unnecessarily limit the amount of time that can be recaptured and repurposed.
Hospital ORs and Airlines: Common Themes
What if we thought of a hospital as an airline and an OR block as a flight? The airline knows that some seats on flights will go unfilled, even if booked to capacity. They use predictive analytics to intentionally and confidently overbook the flight to account for this. The hospital should consider a related - but different - process because the block holder often won’t fill an entire block with cases. To be clear, you wouldn’t be overbooking since the chunks of time into which you’d schedule cases are empty and predicted to remain so. By adopting this strategy, hospitals can fill much more time in their OR blocks with a high degree of certainty that the block holder won’t need it. This approach bypasses the behavioral challenge of seeking permission from the block holder early enough for the unneeded time to be usable, resulting in more usable OR time and more contribution margin.
To view the full guide, please provide your email address.
For more information about the predictive analytics of OR optimization visit copienthealth.com
Show me the full guide!
