AnesthesiaHealthcare DataRevenue Cycle Management
January 28, 2025
The Potential Value of OR Utilization Metrics

The Potential Value of OR Utilization Metrics

Hospital administrators love to believe that anesthesia providers have significant potential to enhance their productivity by virtue of how they work and how quickly they turn over cases. While it is certainly true that some providers may be faster and more eager to fill their downtime with productive activity than others, the reality is that it is operating room (OR) utilization that is the primary determinant of provider productivity. Anesthesia providers are most productive in ORs that are busy and well scheduled. They are most profitable in ORs with a favorable payer mix. In other words, anesthesia providers are essentially captive to a system over which they have little control.

The Potential Value of OR Utilization Metrics

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The real anesthesia goal is to use OR-driven data, provider expertise and practice experience to influence the factors that affect profitability. Because of all the data that is captured to generate appropriate bills for every service rendered, the anesthesia database is an invaluable resource. It is often said that anesthesia practices typically have more and better data regarding what actually happens in the operating room and how surgeons use their time than any other source. Knowing how to utilize this data and how to use it to engage effectively with administration can prove to be invaluable.

Two concepts are essential in the determination of utilization metrics: the designation of anesthetizing locations and normalized data. Every physical location where cases are performed should be clearly identified so that activity can be clearly tracked and evaluated. While this might seem simple, it can be tricky. The main operating rooms are always obvious, but non-OR services may be confusing. It is always important to remember what the objective is. It is often necessary to exclude some activity, such as OB, emergency services and radiology. It is also important to ensure that anesthetizing locations are consistently captured and entered by the billing staff.

Meaningful Metrics

Most management reports provide raw data: cases, units, minutes of anesthesia time and collections posted during a specific period of time, such as a month. While this may be useful to identify practice trends, it is of little utility for any comparative assessment. To determine OR utilization, it is essential to divide the relevant data by the number of locations. If your objective is to compare the billed units of various operating rooms, you would divide the units billed by the number of locations. The goal is to derive a common metric that is meaningful and relevant.

Such metrics can have at least three applications that would support useful dialogue with administration: staffing, optimization and subsidy calculations.

When determining appropriate staffing for a facility, the goal is to base the number of providers needed on the number of anesthesia locations to be staffed. Ideally, each location generates sufficient revenue to cover the cost of the necessary staff. Although in the current market this is not always possible, the goal should always be to match staff to locations based on the cost of the staff and the productivity of the locations. Shortfalls will ultimately be addressed in the calculation of a financial subsidy.

Hospital administrators are always looking for ways to reduce the cost of anesthesia. In other words, they want to keep subsidy payments as low as possible. To accomplish this, they will often hire a consultant to perform a fair market value analysis. The consultant will essentially request the same data needed for a staffing analysis. This is why it is most useful to have prepared and carefully reviewed this analysis before the data is shared with administration.

Increasingly, anesthesia practices are expanding to multiple sites. Such expansion always requires an evaluation of the potential profitability of taking on new venues. To accomplish this, every practice should develop benchmark metrics for the purpose of evaluating new sites. Ideally, each new venue meets or exceeds practice benchmarks.