Robotics, cost control earn accolades for Baldrige winner St. David's HealthCare

A decade ago, St. David’s HealthCare in Austin, Texas established three linked goals that it determined to live up to: Deliver exceptional care, retain customer loyalty, and ensure financial strength. Consistently meeting these objectives required that the health system establish robust strategic planning processes and highly focused methodical reviews of every component that factored into these ends.

Last November, St. David’s success was recognized publicly when it was named a recipient of the 2014 Malcolm Baldrige National Quality Award in the healthcare category for performance excellence through innovation, improvement and visionary leadership.

A health system can spend between $1.5 and $2 million for a robot that assists in operating procedures.

The health system is a partnership between St. David’s Foundation, Georgetown Health Foundation, and Hospital Corporation of America (HCA). Its relationship with the latter is central financially: HCA owns and operates 165 hospitals and 115 freestanding surgery centers, and St. David’s HealthCare can tap into the economies of scale HCA gains when contracting for medical supplies.

But continuing to operate as a financially strong organization rests largely upon the monthly and quarterly reviews for financial, quality and service performance that are conducted by the six hospitals, six outpatient surgery centers, four emergency care centers, and nearly a dozen institutes and other centers that comprise St. David’s HealthCare. These reviews are aimed at ensuring that none of its facilities get off-target.

Each facility measures its financial performance with an eye to remaining debt-free and to maintaining and improving margins. Each is also accountable for “keeping a very intense focus on managing costs through our labor and performance improvement processes,” as well as through supply management, said Cindy Sexton, senior vice president and CFO for St. David’s HealthCare. Among the financial metrics underscoring how its work has paid off is net revenue growth, which has increased more than 70 percent between 2007 and 2013. Additionally, the health system says that return on assets has increased from approximately 17 percent in 2007 to 33 percent in 2013.

Consider, for example, the strides St. David’s HealthCare’s Texas Institute for Robotic Surgery has made in robotics operating room turnover. A health system can spend between $1.5 and $2 million for a robot that assists in operating procedures, so it’s important to get the most out of such assets. In most facilities, it takes longer to turn over a robotic OR than it does a regular OR. “That causes delays for patients and it also means that you can’t use the robotic equipment as much if you can’t turn the room as fast,” said Sexton.

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Given the high cost of robots, “you want to make sure that equipment is used consistently” to optimize the investment in such assets, Sexton said. To accomplish this, St. David’s created new management engineering processes, including placing only the supplies that are used 90 percent of the time for a particular type of procedure in the room. The effort made it possible to turn robotic ORs faster even than regular ORs. “That’s pretty unheard of,” she said. As a result, more surgeons come to the robotic institute’s doorstep, “because they can be more productive,” Sexton said. St. David’s HealthCare’s Texas Institute for Robotic Surgery is now the top program by volume in the state, with all the positive implications that has for revenue.

Because St. David’s worked closely to get agreement among physicians on what supplies are necessary for particular procedures, per-case costs have gone down drastically. This has led to millions of dollars in savings, Sexton said.

An ecosystem of goals

Sexton is careful to point out that St. David’s HealthCare committed to its performance improvement effort knowing that it couldn’t successfully meet any of its goals if it wasn’t meeting all of them. “You can’t have one goal without having all three,” she said. “You can’t be too wedded to one, or you’ll get off-balance.”

Indeed, the health system’s quality and performance management processes often have a positive impact on financial objectives. St. David’s inpatient market share has grown along with the system’s reputation, from approximately 42 percent in 2008 to 48 percent in 2013. As an example of goal interdependency, a large OB-GYN practice moved its hospital affiliations to St. David’s from a competitor institution, Sexton said, “because of our clinical reputation. They moved their entire book of business to us.”

St. David’s has leveraged the processes it put in place for listening to customers, patients, physicians, other healthcare staff, and vendors to develop programs and strategies that help it better support patients’ needs and bring in more revenue. The organization has become “data-rich,” Sexton said, taking information from all these sources and analyzing it to understand “what goes on in our market and with our customers. We use that to figure out which service lines we need to invest in or make more robust. For instance, we’ll analyze whether patients are traveling outside our area for other services that we should be providing.”

The investment in business intelligence and analytics technology to paint that data picture has been worth it, as St. David’s has developed some very high-end services lines as a result. Dave Thomsen, St. David’s HealthCare vice president of quality, said the health system’s focus on data has supported other strategic planning efforts as well. Its emergency room department, for example, is critically important, with data showing that it typically is the source of 60 to 70 percent of inpatient volume.

A few years ago, new competition began emerging from urgent care centers in Texas, a state that doesn’t require certificates of need to establish healthcare facilities. These facilities were beginning to negatively impact traffic and therefore inpatient volume. That led St. David’s to set a new goal for ER patients to be seen by a doctor in less than 10 minutes, Thomsen said.

“We collaborated with physicians and staff and decreased the overall wait time by over an hour over the last few years in the ER,” he said. As a result, ER volumes have been steady and in the past year have actually grown. 

Next up at St. David’s

More comparative data from external sources – such as clinical outcomes information collected and made available by the Centers for Medicare & Medicaid Services or facility performance benchmarks from other third-parties – have additional potential to impact new metrics St. David’s sets for its three organizational goals. Once the health system hits a defined mark – say, making the top 10 percent in a particular quality category, as it has done for the American College of Cardiology’s “door-to-balloon” time in treating the most severe form of heart attack – it strives to make it to the next level, such as reaching the top five percent.

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“We set new goals each year based on a lot of insight,” Thomsen said. “Part of the Baldrige criteria is how do you select relative comparative data and how do you use it.”

St. David’s HealthCare  has firm intentions to continue to raise the bar on both quality and finance. The health system previously used HCA performance improvement SWAT teams to help it move its goals forward, but recently built a dedicated in-house team to do the job for clinical, emergency department, operating room and other key areas of the health system. “We all think about this every day but we have a lot on our plates,” said Sexton. “This new team will wake up thinking process improvement.”

That’s a significant boost, she said, as the key to continuing success “is focus, oversight, measurement and follow-up. We are always happy but not satisfied that we are done until we are the best in the world, like our vision says.”

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