How an affinity for efficiency saved Virtua Health $25M

In an in-depth look at how hospitals are radically transforming the way they operate, Reuters news service today turns the spotlight on Virtua Health — a suburban Philadelphia hospital chain that has been working with GE since 2000 to find new ways to boost efficiency. The doctors at Virtua embraced management tools such as the ones GE uses to make its factories hum, and combined them with new work flow technologies — helping Virtua save $25 million thus far. As the story notes, “Virtua has made scores of small changes to the way it operates, from better staff scheduling to slashing by two-thirds the amount of time it takes to treat a woman who discovers a lump in her breast, which can be a warning sign for cancer.”

The more the merrier: Virtua is also building a new $460 million new facility designed with efficiency in mind. They estimate they’ll be able “to deliver another 2,000 babies per year — a 35 percent increase — in the new facility with just one more labor and delivery room, thanks to changes in work flow,” Reuters reports.
The more the merrier: Virtua is also building a new $460 million facility designed with efficiency in mind. They estimate they’ll be able “to deliver another 2,000 babies per year — a 35 percent increase — in the new facility with just one more labor and delivery room, thanks to changes in work flow,” Reuters reports.

“Back in the ’70s and ’80s, healthcare was basically cost-reimbursed, so whatever hospitals spent, they got paid,” Richard Miller, president and CEO of Marlton, New Jersey-based Virtua told Reuters. “The mind-set was not about cost control and keeping an eye on margins and cost, because it didn’t matter. Now you’re taking a major, massive industry and telling them to be businesslike.” And as the story notes, “When it comes to fat, U.S. hospitals are in need of extreme liposuction. The nation’s healthcare system wastes $505 billion to $850 billion a year on medical errors, administrative inefficiency and redundant paperwork, a Thomson Reuters study released in October found.”

However, Virtua’s efforts are bucking the trend — and the health system now has the highest operating margins of any hospital in New Jersey. “Its 10.3 percent margin is almost three times the national average of 3.7 percent, according to research by David Koepke, senior scientist in the Healthcare & Science business of Thomson Reuters.”

In October, Virtua announced that it’s adopting GE’s AgileTrac system, which tracks and reallocates medical equipment — or operating room schedules — in real time so that usage increases and patient wait times decrease. That technology is also helping Bon Secours Health System in Richmond, Virginia dramatically change its operations. In the video below, Dr. George Parker explains how the AgileTrac system is being used at his Bon Secours’ hospital.

Dr. George Parker explains how his hospital is using GE's AgileTrac technology to better use equipment and operating rooms.

Read Reuters’ story: “U.S. hospitals turn to GE for surgical cuts”
Read “Manufacturing precision leaps from factories to the ER” on GE Reports
Read “GE systems boost cancer center case capacity by 900” on GE Reports
Learn more about the GE Healthcare Performance Solutions team
Learn more about GE’s work with Virtua
Learn more about GE’s work with Bon Secours Health System
Read “Inside the revolution at Intermountain Healthcare” on GE Reports

http://www.gereports.com/how-an-affinity-for-efficiency-saved-virtua-health-25m/

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Posted on December 4, 2009
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One Comment

  1. john Stenson says:
    December 4, 2009 at 1:22 pm

    Agile Trac is a proprietary closed system….Why would I want that on my network, and the support of IT for this……
    in addition, the hardware configuration is limiting, from what i understand…

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