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Anesthesia Information Management Systems: Workflow Engineeringand Return on Investment

Michael O’Reilly, MD, MS, Kevin K. Tremper, PhD, MD, and Paul Baumgart, MBA‡

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ollowing its annual meeting in 2001, the Aesthesia Patient Safety Foundation (APSF

ued the following statement: “The APSF endond advocates the use of automated record-kee

n the perioperative period and the subsequenrieval and analysis of these data to improve paafety.”* This proclamation notwithstandiniven the competition for scarce healthcareources, keen analysis and persuasive argumre required to advance a project for the acquisnd implementation of perioperative informatystems. Return on investment data are centraaking those arguments. The purpose of this p

s to make the case that an anesthesia informystem is worth the considerable investmenime, energy, and money and to present aorma financial analysis. Where appropriate, exience from the implementation of an anesthnformation system at the University of Michigill be included.Determining a return on investment (ROI) for

nformation technology (IT) project is notoriousifficult.1 Traditional ROI analyses measureffects of IT on decreased operational costs

ncreased revenue. However, to the best ofnowledge, such an analysis has not beenished for anesthesia information systems. S

uch of the benefit of IT relates to improvroductivity, a cost and revenue analysis mayeflect the whole picture with respect to the vaf implementing an information system.2 Intu-

tively, it is apparent that paper-based systemsot sustainable. However, the transition to e

ronic information systems is a complex and chenging endeavor. Much of the work involvhanging the way people do their jobs; thatork process reengineering. The required anaill reveal benefits that may not be directly rela

o the implementation of an information systemo the business process analysis and adjustmherefore, the benefits of implementing an e

ronic perioperative process will depend onffectiveness and efficiency (or lack thereof) of

nstitution’s current paper-based systems.

eminars in Anesthesia, Perioperative Medicine and Pain, Vol 23, N

The ROI model for anesthesia information sems is further complicated by the fact that somhe benefits will be to the anesthesiologistome to the institution. But perhaps the mostortant aspect of implementing an anesthesia

ormation system relates to the intangible benen particular, increased patient and provider saaction and improved patient safety and qualityare. Although these are difficult to quantify, thre becoming increasingly important as the cetition for patients and nursing staff increaseThe argument for implementation of an infation system can be summed up as “if you ceasure it you can’t manage it.” Everyone knour paper systems are inefficient at best anderous at worst. However, more specific benust be described, and if possible quantified

onstruct a business case to advance a projeurchase and implement a perioperative infor

ion management system. More importantly, iital to determine the scope of a project andnticipate taking advantage of various opport

ies that may not be readily apparent.Information systems improve efficiency beca

hey capture pertinent information at the pointervice and leverage data already collectedvailable from other information systems. Thatomplete and accurate clinical documentatombined with other digital data, will drive a nuer of downstream processes. For example, chapture and quality assurance data can be gted as reports from the database. In addi

From the University of Michigan Health System, Ann Arbor,ichigan, and ‡ General Electric Medical Systems Information

echnology.Address reprint requests to Michael O’Reilly, MS, MD, De-

artment of Anesthesiology, University of Michigan Medicalenter, 1500 E. Medical Center Drive, Ann Arbor, Michigan8109-0048; E-mail: oreilly@umich.edu* http://www.asahq.org/Newsletters/2002/6_02/subnews_602.htm.© 2004 Elsevier Inc. All rights reserved.0277-0326/04/2302-0011$30.00/0

doi:10.1053/j.sane.2004.01.005

151o 2 (June), 2004: pp 151-157

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152 O’REILLY, TREMPER, AND BAUMGART

nformation is collected once and then reconfirmedy others as the data are carried forward during theare process. For example, allergy information cane confirmed; it is better to say, “ I see you had aevere reaction after taking penicillin” versus “Doou have any allergies to medications?” In oururrent paper-based system, the patient may besked this question five times between admittingnd discharge from the hospital.

TACTICAL EXECUTION: MOVING PATIENTSTHROUGH THE SYSTEM

The operating room is a very important sourcef revenue for most hospitals. Increasing the effi-iency and utilization of the operating room hasraditionally been driven by the data available fromperating room scheduling systems. Anesthesiolo-ists and hospitals have vested interests in thefficient execution of the OR schedule, and bothequire documentation of sentinel time stamps inhe perioperative process. This mutual interest infficiency and documentation is evidenced by theonvergence of OR scheduling systems and anes-hesia documentation systems. Perioperative infor-ation systems help move patients through the

ystem and therefore provide some ROI by ensur-ng the required documentation is completed andresent at the point of care; i.e., in the holdingoom prior to bringing the patient to the OR.

PATIENT ADVANCED TESTING

There are three ways an anesthesia advancedesting and evaluation clinic can avoid delays andelp move patients through the perioperative pro-ess efficiently: (1) by ensuring the patient is med-cally prepared or “optimized” for anesthesia andurgery (and hence the case will not be delayed orancelled because of an unrecognized or untreatedr evaluated co-morbidity); (2) collecting andcanning the documents that are required for theatient to get into the operating room, in particular,he consent and surgical history and physical; (3)nsuring the anesthesiologist who will be caringor the patient has all relevant data at the point ofare. The direct return on investment will be re-ated to the number of cases that are delayed orancelled and for what reason at a particular insti-

ution. i

lectronic Advanced Testing Documentationnhances Workflow

The most significant impact of automating thedvanced testing process may relate to reducing theggravation of those involved in the process. Collect-ng all existing relevant clinical documentation, in-luding labs, consultant reports, and test results at theoint of care, is a labor-intensive process in the pa-er-based world. Prior to the implementation of anlectronic system in the Patient Advanced TestingPAT) Clinic at the University of Michigan, threeedical assistants were required to assemble all of

he relevant paper documents. Now, the clinic runsith one medical assistant and their role has changed

o communicating with other clinics and scanningocuments into the database.

Since the patients may move through the systemaster than the paper, it is a challenge to make theesults of the evaluation available to all stakehold-rs (nurses, surgeons, and anesthesia care provid-rs). Providers may be in different locations and,deally, would like to have access to the informa-ion at the same time. This cannot be accomplishedith efficiency in a paper-based system. At theniversity of Michigan, prior to the implementa-

ion of an electronic system, one person had toalk over to the Operating Room from the PAT

linic every day to deliver the paper advancedesting forms. These were placed in a filing cabi-et. An audit revealed that 50% of the paper copiesere never retrieved. It was progressively moreifficult to find the paper copies since they tendedo accumulate. Implementation of the electronicystem was a workflow enhancement for the anes-hesiologist as well as the clerk whose job it was toalk over with the paper copies and file them.

Who likes to file?)When a patient is seen in advance, and it is

etermined they require further tests or evaluation,ow do you ensure there is appropriate follow-upn these results by the ordering physician so thathe evaluation is completed and reviewed prior tohe start of surgery? In our electronic system, out-tanding issues are identified and the database gen-rates an alert three days prior to the date ofurgery. The alert goes to the ordering physician asell as to the anesthesiologist who will be caring

or the patient. Electronic notification continues atpecified intervals until the “fl ag” on the pending

ssue is cleared. This ensures the patient does not

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153ANESTHESIA INFORMATION SYSTEMS

how up in the holding room with unresolvedssues.

With an automated system that includes clinicanagement, providers can immediately deter-ine which patients are in rooms and ready to be

een as well as how many are in the waiting room.oreover, time stamps are applied to each step in

he process and these data can be used to morefficiently manage the clinic in a manner analo-ous to how time stamps generated by surgerycheduling systems are employed to enhance thefficiency and utilization of the operating room.

he Business of Anesthesia Advanced Testing andvaluation

The anesthesia preop evaluation occurs within4 hours of the patient going to the operating roomnd is part of the anesthesia professional fee. Therofessional services for patients with complexroblems who would benefit from advanced eval-ation and testing, that are seen more than 24 hoursn advance of the procedure, are billable. An elec-ronic system greatly enhances the ability to collectll required elements to fulfill payor requirementsor documentation. In addition, since the data col-ected for the advanced testing evaluation are sim-lar to those obtained for the preoperative evalua-ion, an electronic system enhances the efficiencyf how that information is carried forward into thereoperative documentation. An electronic systemlso facilitates the requirement of providing thendings of the anesthesiologist back to the request-

ng surgeon, via automated email.

THE OPERATING ROOM: PROVIDINGANESTHESIA SERVICE

The operating room is where most anesthesiaare is provided. There are a number of ways anlectronic system provides a ROI for anesthesiaervice and associated costs in the operating room.

apture of All Professional Fees

Concerns about concurrency may lead providerso be conservative regarding how they documentnesthesia start and stop times. In addition, inad-ertent logging of times that reflect overlapping theare of cases can eliminate the ability to bill for allhe cases. In most practices, the concurrencyhecks are done after the fact by billing systems.oncurrency problems can be eliminated with

lectronic systems because they tell the provider, c

n real time, the cases for which they are respon-ible. In addition, complete and accurate clinicalocumentation will identify and capture relevantodifiers such as field avoidance and positioning,

s well as special techniques such as induced hy-othermia and induced hypotension. In addition,omplete capture of all perioperative proceduresill be captured, such as transesophageal echocar-iography and invasive monitoring line placement.There may also be procedures, such as place-ent of arterial lines, central lines, epidurals, and

ain blocks, that are performed but not billed dueo inadvertent omission by the anesthesia care pro-ider. Linking the clinical documentation to theharge will solve this problem. Ensuring completelinical documentation can be accomplished byroviding alerts and reminders based on other data.or example, if there is an arterial waveform trac-

ng but no arterial line procedure note, an alert cane generated.

orkflow: Efficiency of the Billing Office

The professional fee reflects services providedo the patient; therefore, complete and accurateoint-of-care clinical documentation should gener-te a bill with minimal human intervention. Anlectronic system should improve the efficiencynd productivity of the billing office. However, asentioned above, the impact of an electronic sys-

em will depend on how well or poorly this is beingone with a paper-based system. Further efficien-ies will be realized when systems are able toransmit these data directly from the point of careo the payor, totally eliminating the billing officend significantly decreasing the accounts receiv-ble.

orkflow: Charge Capture

The communication between the billing officend the anesthesiologist can be greatly simplifiedith an electronic system. Procedure and otherocumentation that are not signed can automati-ally appear in a pending work cue. In addition,lerts (email and paging) can be incorporated tonsure documentation is completed in a timelyashion. For example, if the preoperative assess-ent documentation is not completed at the time of

ncision, a page may be sent to the care providereminding them to complete the documentation. Ifhe documentation is not completed at the end of a

ase, the alert can be sent to the supervisor.

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orkflow: Clinical Care

Most surgery management systems provide pa-ient tracking functionality, analogous to airportype displays that provide the status of variousperating rooms, holding room slots, and PACUPhase I and Phase II) beds. These systems havehe potential to significantly improve efficiency asell as to reduce the aggravation associated with

he entire perioperative process. Examples include:utomated notification that the patient has arrivedn the holding room; the OR is ready for the nextatient; the patient is assigned to PACU slot X, etc.hile it is difficult to put a dollar value on this

unctionality, it is likely to result in enhanced pro-uctivity as well as enhanced provider and patientatisfaction. The same systems can be linked to theaiting room so families can follow the perioper-

tive process, thus allaying anxiety and eliminatinghe many phone calls required to determine theurrent location of the patient or the progress ofheir procedure. Moreover, the data may be scru-inized to identify bottlenecks and to further im-rove the process and, ultimately, throughput.

ost Per Case

One significant advantage of an electronic sys-em is it provides the ability to determine provider-pecific information about the cost per case. Cap-uring all commodities used by the anesthesiologistan be derived from clinical documentation or bar-ode scanning. This further reinforces the impor-ance of accurate and complete clinical documen-ation; if it is not documented, a bill will not beenerated and the associated commodity and drugharges will not be accounted for. Most institutionsharge payors for at least some individual consum-bles. Since this may be done electronically, laborosts can be saved with the elimination of manualcanning of paper records to determine charges. Inddition, more detailed analysis will be possible toore accurately determine the cost per case.inked with outcomes, practice guidelines can berovided. Dave Lubarsky, using the Arkive systemt Duke University, showed that practice guide-ines decreased the cost per case to $32.00.3

iability Expense

While the impact of an electronic system oniability has not been clearly established, it appears

hat the use of an electronic anesthesia record s

eeper that produces a complete, accurate, andegible version of events may reduce liability. Howhis translates into reduced expense for malpracticensurance has not been established. While this mayppear to be a benefit to the anesthesiologist morehan the institution, the institution is almost alwaysrought into a lawsuit. Whether the use of annesthesia information system is the basis for ne-otiating a decreased rate with their insurance car-ier has not been established.4

HOSPITAL AND ANESTHESIA RELATEDOVERHEAD

In a manner analogous to how hospitals chargeor the use of the operating room, hospitals have aharge for anesthesia drugs, commodities, and thequipment required for anesthesia service. Thelimination of manual entry to capture theseharges may have a significant impact on associ-ted labor costs. Moreover, reference the sectionbove, the ability to actually determine the cost perase may make it possible to adjust fees. Theseata provide important information in determininghe potential profitability of service contracts.

ANESTHESIA INFORMATION SYSTEMS:BENEFITS TO THE HOSPITAL

The benefits of accurate and complete clinicalocumentation, captured electronically, may haveore value to the institution than to the anesthesi-

logist. Some of the benefits have been describedbove; for example, savings associated with theecreased labor required to review paper charts toapture drugs and commodities and other fees.nother significant benefit of the data provided by

n anesthesia documentation system involves Di-gnosis Related Groups (DRG) coding. The abilityo capture all co-morbidities and complications isikely to add DRG-based reimbursement. Gordonibby at the Shands Hospital and the University oflorida showed a 1.5% increase in DRG-basedeimbursement simply by including a laser jetrinted version of the anesthesia preoperative eval-ation.5 The premise was that anesthesiologists areery good at documenting co-morbidities (it isntegral to the practice of anesthesia) and it isasier for the coders to identify co-morbidities thatre printed versus those that are handwritten.gain, complete and accurate point-of-service doc-mentation and logic applied to the database

hould generate the appropriate DRG class, thus

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educing associated labor. To change the DRGlass based on a co-morbidity or complicationCC), it is not sufficient to document that a patientimply has a co-morbidity or a complication; itust have either been treated or required further

esting and evaluation. Linking tests and clinicalare with each co-morbidity may make the processf DRG classification more efficient, accurate, andomplete. In addition, an underlying goal of anes-hesia and clinical information systems is to beble to close the loop between what we do foratients and their ultimate outcome. Toward thisbjective, it is vital to identify complications. Withomplete and accurate clinical documentation,omplications will be generated as reports basedn logic applied to the database. Examples includeeports based on lab values (elevated troponin,ndicating a possible myocardial infarction or ele-ated creatinine, indicating possible perioperativeenal insufficiency); medication administrationnaloxone, indicating possible narcotic overdose,pinephrine in ASA I or II patients, indicatingignificant cardiovascular instability) or events (re-ntubation in the PACU; bronchospasm). This willssist quality improvement areas as well as DRG-ased reimbursement for the hospital.

STRATEGIC IMPROVEMENT: WINNINGTHE COMPETITION

Health care is competitive. There is competitionor patients and competition for skilled employees.

argins are small. Increasing the margin from 1%o 2% has the potential to double income, thusmall improvements can have a large impact. In-ormation is power, and computer systems are theools of the age for managing information. Thosenstitutions that effectively implement and lever-ge IT systems are likely to lead the competition.

Access to good management and clinical dataill give anesthesia decision makers, administra-

ors, and perioperative service directors the infor-ation needed to make recommendations and pro-

ess improvements across the entire perioperativeontinuum. Best practices, outcomes, and improve-ents in ways of doing things can be evaluated and

etter understood. But more importantly, thehange process is accelerated by a system’s abilityo build change recommendations into the guidingemplates, menus, “virtual” forms, scripts, and pro-ess pathways that system users come to depend

pon. In this way, the data and performance anal- a

sis are the drivers for change, changes that willecome manifested in the system throughout therocess. This data-gathering—data analysis—pro-ess modification loop gives real substance to thebility for information systems to help strategicallyrive change and organization performance.Patient satisfaction is likely to be enhanced for

he reasons described above. In addition, systemsre likely to employ web-based portals to allowatients access to their medical records as well aso information to facilitate visits, such as on-linechedules, maps, and so forth. In addition, web-ased portals provide excellent tools for diseaseanagement by providing context-sensitive refer-

nce materials and possible reminders and alertsased on a patient’s individual medical conditionnd lab results.

rovider Satisfaction

People are what make an organization thrive.roperly designed and implemented systems haveignificant potential to enhance working conditionsor all stake holders, nurses, surgeons, anesthesi-logists, CRNA’s, residents, clerks, and others.

atient Safety

As noted in the Institute of Medicine report Torr is Human,6 information systems are required toake improvements in patient safety. We musteasure our errors and we must reengineer our

ystems for enhanced safety. Decision support andmart alerts hold great promise for the reduction ofedical errors. It is likely the next major advances

n anesthesia patient safety and quality will involvehe application of information technologies. In ad-ition, the FDA recently proposed the requirementhat all drugs be labeled with bar codes. This willikely drive the placing of computers at the point ofare. It will not make sense to bar code read drugsf it does not interact with the rest of the clinicalnformation system.

onfidentiality and Compliance

Information systems provide the only practicalay to comply with the security and transportationf confidential patient information as specified inhe Health Insurance Portability and Accountabil-ty Act of 1996 (HIPAA). They enforce behaviorshat ensure compliance and accurate charge cap-ure. In addition, the records are clear, legible, and

ccessible from anywhere. Most importantly, man-

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Table 1. Pro Forma Return on Investment Analysis

Dollars

Anesthesia Provider Benefits1 Professional Fees $150,0002 Concurrency 15,0003 Procedure Charge Capture 50,0004 Billing Expense 40,0005 Time Value of Money 10,0006 Liability 15,0007 Charge Capture Advanced Testing 100,000

380,000Hospital Related Benefits

8 Delays and Cancellations 120,0009 Charge Capture-Anesthesia Facility 10,0000 Charge Capture-Pharmaceuticals 50,0001 Co-morbidity and Complication (DRG) Capture 1,000,0002 Improved Pre-op Evaluation Process 20,0003 Practice Guidelines/Commodities/Cost per Case 50,000

1,250,000Intangibles

4 Workflow Improvements 10,0005 Provider Satisfaction 10,0006 Patient Satisfaction 10,0007 Patient Safety 10,000

TOTAL $1,630,000

1. Professional Fees: Assume one additional unit is captured for every other case. For 10,000 cases a year, an additional 5,000nits will be captured. At a reimbursement of $30 per unit, the expected additional income is $150,000 per year.2. Concurrency: Assume avoiding concurrency results in the capture of an additional case every other day. Assume 100 cases

er year times five units per case times $30 per unit for an additional $15,000 per year.3. Procedure Documentation: Assume there is an average of 1 procedure for every 4th case. Assume 2,500 procedures are done

ach year and that 10% are missed for a total of 250 procedures at $100 each for additional revenue of $25,000 per year.4. Billing Expense: Assume that, for a group doing 10,000 cases per year, the gross income is $2,000,000. Also assume the

illing expense prior to the implementation of an electronic anesthesia system is 8% of revenue for a total of $160,000 per year.ssume that the billing expense can be reduced by 25% to 6% translating to a billing expense after the implementation of annesthesia information system at $120,000 for a net decrease of expense of $40,000 per year.5. Time Value of Money: Assume that accounts receivable will be reduced by the implementation of an electronic information

ystem saving $1,000 per year.6. Liability: Assume a 5% reduction in the malpractice premium expense. Assume the malpractice premium for each physician

s $20,000 and there are a total of 15 anesthesiologists in the group doing 10,000 cases per year, with a 5% reduction in theremium the savings will be $15,000.7. Charge Capture Advanced Testing: Assume no charges are currently generated for advanced testing. The amount of revenueill depend on the proportion of visits that are charged as office visits versus consults. Assume additional collections of $100,000er year. During a one-year period, the Patient Advanced Testing Clinic at the University of Michigan saw 4,087 patients. Thisctivity generated charges of $867,940 and revenues of $393,514.8. Cancellation/Delay: Assume the current rate is 2% and that this can be reduced to 1%. If you assume that there are 10,000

rocedures per year and that each cancellation or delay saves one hour at a cost of $1,200 per hour, then the total savings are120,000 per year. Reduced delays can also equate to higher OR throughput or productivity which can relate to placing moreases on the schedule in the same period of time, creating the opportunity to bill more time as patient revenue rather than idle time.9. Charge Capture Anesthesia Overhead: Assume a savings of .3 FTE at an annual salary of $25,000 per year for a net savings

f $8,333 per year.10. Charge Capture Pharmaceuticals: $5 per case in improved capture and reduced cost to capture data.11. DRG Based Reimbursement: Assume the hospital does $200,000,000 in DRG based reimbursement and 50% goes through

he operating room and therefore co-morbidities would be captured with the anesthesia information system and that an impact of% can be made for additional revenue of $1,000,000 per year.12. Improved Pre-Evaluation Process: Assume saving of one-half FTE at $20,000 per year.

13. Practice Guidelines and cost per case. Assume the cost per case can be reduced by $5 per case.

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157ANESTHESIA INFORMATION SYSTEMS

ging and auditing access to an electronic record isnfinitely easier than in a paper-based system.

ADDENDUM

ro Forma Return on Investment Analysis

A proper return on investment analysis wouldresent data derived as a result of actually havingmplemented a system and measuring the costs andenefits. Such an analysis is a significant amount ofork, which may be why one has not been reported

o date. Based on the descriptions provided above,able 1 is a Pro Forma Return on Investmentnalysis that may be used as a template for further

nalysis and construction of a business case.A central theme of this analysis is that the po-

ential benefits relate to how well or poorly (ie,fficiently) each function is executed in a particularnstitution. Also, it is important to include thenvestments required to realize these returns, in-luding investments in implementation, training,nd computer support personnel. Systems gener-lly cost between $20,000 and $40,000 per oper-ting room, depending on functionality and thexisting infrastructure.

In addition, some returns are based on volume,nd this analysis presents data for a hospital andnesthesia practice performing 10,000 procedureser year.

REFERENCES1. Forrer D, Anderson T: The dichotomy of measurement:

nformation technology return on investment in the public sec-or. Professional Operations Management Society Conference.rlando, Florida, 20012. Jorgenson DA, Ho MS, Stiroh KJ: Lessons from the U.S.

rowth resurgence. First International Conference on the Eco-omic and Social Implications of Information Technology.ashington DC, January 27-28, 20033. Lubarsky DA, Glass PS, Ginsberg B, et al: The successful

mplementation of pharmaceutical practice guidelines. Analysisf associated outcomes and cost savings. SWiPE Group. Sys-ematic Withdrawal of Perioperative Expenses. Anes 86:1145-160, 19974. Feldman JM: Medicolegal aspects of anesthesia informa-

ion systems. Perioperative information systems. Semin Anes-hesia, in press

5. Gibby GL, et al: Computerized preanesthesia evaluationf surgical patients increases secondary diagnosis noted byospital coders. J Clin Monit 11:268, 19956. Kohn LT, Corrigan J, Donaldson MS: To err is human-

uilding a safer health system: Washington DC, National Acad-my Press, 2000