PwC Healthcare Roundtable – 1st quarter 2018

This post is also available in: Français

DaisY: Setup and operational management of an outpatient surgery center


Image source

The PwC Healthcare Round tables organized quarterly by PwC, are exchange platforms for hospital directors from French-speaking Switzerland. Topics are announced a few weeks in advance and will cover digitalization, outsourcing, the “supply chain” concept, “fee per procedure” payment, coding and pricing, as well as integrated care.

At our Q1 2018 Round table, we were delighted to host Brian Oosterhoff, operations manager of the DaisY outpatient surgery center of the eHnv (Etablissements hospitaliers du Nord vaudois). Mr. Oosterhoff provided the group with his unique insights and lessons learned on the setting up and operational management of an outpatient surgery center.

Quick overview

Ambulatory (outpatient) surgery is suitable for a large number of procedures and is not limited to minor surgery. All types of patients are eligible for this type of procedure and age is not a limiting factor. Indeed it is even recommended to use outpatient surgery for the elderly to avoid the loss of independence and cognitive decline related to hospitalization. In each case, it is imperative to analyze the patient’s context and environment to ensure that someone is available upon the patient’s return home. The evaluation is done by the surgeon and the anesthesiologist before the surgery.

A little less than 10 years after its opening, DaisY treats more than 3’500 cases per year, has an operational staff of around 15 full-time equivalents (without surgeons) and generates an income of CHF 5.6 million with an EBITDA margin of around 6%.

The most important surgeries in terms of volume are related to ophthalmology and orthopedics, far ahead of general surgery and gynecology. The center receives an average of 17 interventions per day, which results in a room occupancy rate of around 70%. The “length of stay” of a patient is on average 3.5 hours.

Success factors

Brian Oosterhoff draws in part on the 10 key recommendations in making day surgery happen published by the European Observatory on Health Systems and Policies in 2007.

By adapting them to the particular context of DaisY, he mentions in particular the following points as success factors:

  • Separate the flows between outpatient and inpatient surgery. The building of separate infrastructures is the best way to do this;
  • Separate the healthcare teams and combine it with a major investment in staff training. Indeed, specific skills are essential. The branch is organized in MOOC (Massive Open Online Courses) and in congress thanks to the International Association for Ambulatory Surgery. The training goals are multiple and cover the particularities of outpatient surgery such as analgesia as well as the follow-up of the patient so as not to make him/her sick thanks to “care maps” which allow the results to be as predictable as possible;
  • Invest in flexible infrastructure. The flexibility of the staff but also of the equipment is essential. The DaisY centre has been equipped with armchairs that can be converted into an operating table; this saves time. The admission and preparation of the patient are also very important. The medical staff takes care of this task but also of more technical work such as operating protocols script/typing as well as post-surgery follow-up of the patient. Always at the infrastructure level, the positioning of a sterilization unit near the operating theater is important (even if a large part of the equipment is for single use) as well as the open architecture that allows optimization of the work of the anesthesiologist. It should also be noted that surgeons dedicate a full day to the center in order to avoid going back and forth between the center and the hospital.

Challenges

Several major challenges hinder the use of outpatient surgery. We can quote, among others:

  • Pricing: considering outpatient surgery as standard and inpatient surgery as an exception comes up against a pricing problem in Switzerland. The new TARMED has a significant negative impact. Based on the type and number of interventions perfomed in the past, DaisY estimates that its revenues may decrease by approximately 20%. However, it is expected that due to the price decrease, a certain compensation through increasing volumes may occur. Therefore, the actual future impact is unclear at the present time;
  • The setting up of follow-up care of the patient: patients safety net and wellbeing are crucial in the field of outpatient surgery. Medical follow-up by a general practitioner at the patient’s home, often cited as an indispensable relay, is really not necessary if the patient is well informed about normal and abnormal situations in which it is imperative to call;
  • The balance between medical and administrative work: The part of the work dedicated to administrative processes such as the collection of statistics or indicators for medical societies takes up a lot of valuable health professionals’ time. The positive effects of simplifying clinical processes should not be offset by making administrative tasks more complex;
  • The alignment of incentives: this should not cost the patient more (which is fortunately not the case in Switzerland) and the hospital should not earn less for outpatient procedures than it would earn for the equivalent procedure if conducted as an in-patient procedure. The current context requires them to offset the deterrent effect of the tariff by reducing operating costs. This is possible in a dedicated center, separate from the hospital complexity and equipped with an efficient and flexible team.

In addition, the development of outpatient surgery must be accompanied by a reduction in inpatient capacity in order to ensure consistency. There are many advantages to reducing the number of beds. It has long been known that hospitals are particularly problematic places in terms of:

  • hospital-acquired infections (“Up to 7% of hospitalized patients will present with a healthcare associated infection during their treatment”);
  • loss of independence for elderly patients (“Loss of self-control, profound isolation, dependence on others, fear of death, and loss of usual frames of reference (during hospitalization for example), are all factors that can affect the patient’s independence”);
  • medication errors.

Perspectives & conclusion

Brian Oosterhoff stresses the importance of continuing the shift to outpatient surgery by increasing the number of surgical procedures performed on an outpatient basis but also by encouraging a transfer to office-based surgery. The participants were in complete agreement on the concept, even if the implementation remains quite different from one structure to another.

The digitalization of the patient’s journey as well as the simplification of processes (standardization of equipment for example) should continue to support the shift to ambulatory care by improving efficiency. This element was very well understood and anticipated by the participants even if the challenges are considerable, mainly in terms of coordination and integration of the different IT systems. Optimizing resources (mainly purchasing) and strengthening the degree of autonomy of all actors are of course crucial in this context.

In conclusion, the potential of outpatient surgery is still under-exploited in Switzerland but a step in the right direction has been taken with the February 2018 decision by the Federal Department of Home Affairs (FDHA) that six groups of interventions would be covered exclusively via outpatient care in the future. This decision aims to create a uniform regulation of these interventions for all insured persons in Switzerland, with an entry into force on 1 January 2019.

Nevertheless, the exclusive nature of the list may slow-down or limit any industry-wide shift towards ambulatory procedures in Switzerland, which until now has been led by a few pioneering centers. To further incentivize the usage of these innovative acts, DRG-type financing, but without its lower limit, could be the key to success.

Quarterly PwC Healthcare Roundtables

Are you interested in participating at our next PwC Healthcare Roundtable on 16 May 2018 in Morges? Do not hesitate to contact us (pascale.boyer.barresi@ch.pwc.com) and we will be happy to keep you informed of the theme as well as of subsequent events in the French-speaking part of Switzerland. We look forward to seeing you there!

Contact Us

Pascale Boyer Barresi, CFA
Senior Manager
Deals | Valuation & Modelling | Healthcare & Life Sciences
+41 58 792 97 42
pascale.boyer.barresi@ch.pwc.com

Published by

Pascale Boyer, CFA

Pascale Boyer, CFA

PwC
Avenue Giuseppe-Motta 50
1211 Geneva 2
pascale.boyer.barresi@ch.pwc.com
+41 58 792 97 42

Pascale is a Senior Manager with experience in healthcare and life sciences. She focuses on valuation (projects, companies) and financial modelling (especially key performance indicators) for the Swiss healthcare sector. She is a CFA charterholder since 2003.