Stony Brook hospital finds $2M in savings
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Administrators in surgery at Stony Brook University Hospital had two goals: to more efficiently schedule operating rooms and to save money on surgical implants and supplies.
In unusual collaborations, the hospital tackled both issues, saving $2 million and receiving a $5,000 national innovation award in October from The Advisory Board Co., an international research, technology, and consulting firm.
Although the hospital has 30 operating rooms, too often Dr. Kenneth Rosenfeld, medical director of the ORs, said he was faced with scheduling overlaps. That meant lost time and lost revenue. He wanted to figure out the best way to give the hospital's 230 surgeons in 15 specialties the right amount of time for each procedure.
So, in what Rosenfeld said is the first collaboration between the university's hospital and business school, he went across campus to the college of business. There, he met weekly for about three or four months with Thomas Sexton and Herbert Lewis, experts in efficiency theory, and with Melissa Dolan, a director in the hospital's continuous quality improvement department.
They came up with a complex mathematical formula that, when implemented early next year, will allow Rosenfeld to figure out which surgeon should get which operating room, when and for how long.
He believes it's the first of many such business school-hospital partnerships.
"The economics have changed," Rosenfeld said. "Now we have to look at business models."
The other part of the award came from cutting $2 million each year from the cost of surgical implants and supplies, the result of a collaboration between surgeons, nurses administrators, and purchasing and inventory managers.
Mary Catalano, administrative director for perioperative services, said the hospital had little sense of supply costs per case in the operating room.
The hospital used the Advisory Board's profitability business system, which took Stony Brook's disparate data and merged them into one reporting system. That allowed the hospital "to identify the cost of doing business and opportunities to reduce those costs," Catalano said.
The hospital cut down on the number of items used in the operating room, used less expensive alternatives and, by comparing costs with other hospitals, negotiated better prices with vendors, she said.
"Stony Brook University Hospital has created over $2 million in cost savings based on their unyielding approach to mastering best practice, to performance tracking and improvement, to being great at all the habits that need to be a part of hospitals' daily routine," said Yaw Fellin, managing director of performance technologies at the Advisory Board.