Vincent Valley Hospital Orthopedic Case Volume:

Recoupment, Retention, and Expansion

Hope Corsi, Mitch Goth, Ashley Heim, Dana Ibrahim, & Kayla Yun

University of Wisconsin

HCA 740: Healthcare Operations & Project Management

Dr. Jean Gordon

December 11, 2021

 Driving Forces

In any dispute of policy that has occurred in history, there is a side with a vested interest

in change, and a side rooted in keeping things the same. Such is the case of Vincent Valley

Hospital (VVH) and its orthopedic center. VVH has seen orthopedic patient volume drop due to

several external factors, and has sought to rectify this, at least partially, with a more standardized

treatment process. However, physicians and employees in the orthopedic center have pushed

back against the standardization of care. Now, both sides appear to be at an impasse, so let us

first examine the motivational backing both sides have, and where it may source from.

VVH has a strong financial interest in supporting the change in procedure

standardization. When a business leader sees a reduction in volume, it would make sense to

examine the variability of the system and whether its function could be standardized, as

standardization helps achieve optimized production flow, “The theory of swift and even flow

asserts that a process is more productive as the stream of materials flows more swiftly and

evenly. Productivity rises as the speed of flow through the process increases'' (McLaughlin &

Olson, 2017, p. 281). Beyond what the leaders at the hospital may see as a good solution,

standardization is becoming more of a necessity with the advent of the Affordable Care Act

(ACA)’s system of bundling payments. Within that system, standardization maximizes

payments to a greater degree, essentially requiring the system to become standardized if it is to

generate the same level of revenue it did prior. Within the ACA, “the general use of research

dollars and financial payment incentives seeks to alter provider behavior from the bottom-up.

PPACA…represents a major federal initiative to standardize medical practice” (Furrow, 2011, p.

1736). All of this serves to support VVH’s goal of changing their system to allow for greater

standardization. However, even the ACA’s structure and wording anticipated physician
resistance to standardization. So, let us examine the practitioner perspective.

Physicians and associated medical staff also have valid reasons for resisting

standardization procedures. Many are aware of the ACA’s stipulations, and the positive impact

standardization is meant to have on patient outcomes in practice. However, hold-outs are

common. One major reason for this stems from the physician’s interest in maintaining autonomy

over their decision making, “the cultural ideal in the United States, especially among physicians,

is that clinical decisions are based on medical criteria only” (Posner, et al., 1995, 476). However,

with new legislation, including the ACA, changing that decision making landscape, “physicians

have seen costs become an overt factor in clinical decision making” (Posner, et al., 1995, 476).

The physician's belief that only individual medical criteria go into decision making may make

some sense, as patients are individuals and need to be treated as such. Additionally,

standardization removed physician individuality as well, taking their decision making and their

background out of the equation in favor of established processes for given diagnoses. Along with

this perceived lack of autonomy, physicians may resist changes at VVH simply because, with the

new Health North surgery center, they have another option to take their surgical cases to. If they

disagree with one location’s standardization of practices, they could move their caseload to

another location. This reality must be addressed by VVH as it continues to put pressure on its

medical staff to standardize care. Both sides have valid perspectives, and seek to protect those

perspectives from manipulation and successfully reach what they perceive to be best business

practice for VVH. However, these viewpoints supporting and resisting change will need to be

compromised on both sides in order to achieve true operational success.

Surgeon Refusals and Actions

In order to efficiently determine why some surgeons have refused to follow the
standardized procedures at Vincent Valley Hospital, internal research must be completed. This

can be accomplished by conducting meetings with the individuals themselves, as well as the use

of surveys or questionnaires. A well-designed and executed employee survey may provide the

leadership with a wealth of information on how employees feel about their workplace and the

new standardized procedures set in place. When an organization is sensitive to employee input,

retention, productivity, customer service, and employee morale increase, and absenteeism

decreases (SHRM, n.d.). If VVH were to conduct a survey on the new standardized procedures,

it would demonstrate to employees that their input is important. As a result, managers would

gain a better understanding of the difficulties impacting the implementation of new

standardization practices. Personal encounters with resistant doctors would also provide a means

of controlling participation via dialogue. Stakeholder engagement refers to a readiness to

participate in a meaningful conversation about problems that are important to project

stakeholders (Fair-Wright & Juli, 2016).

The failure of many healthcare transformational project endeavors has been attributed to

employee change resistance. Employees’ attitudes toward change have been suggested as a

major component in determining the effectiveness of these work reorganizations (Dubois et al.,

2013). If healthcare organizations wish to cultivate change-oriented attitudes, they should invest

in a wide range of interventions, not only demand-reduction methods, but also resource-

development initiatives (Dubois et al., 2013). Using a structured change management strategy

from the start of the project, engaging senior executives as active and visible sponsors of the

change, and soliciting support from managers as change advocates is the only way to confront

and mitigate project resistance. During this stage, it is also critical to communicate often and

effectively in order to keep the project duration on track. It is crucial to establish a strategy for
who needs to know, when they need to know, and how much they need to know when launching

a revolutionary change (Gesme & Wiseman, 2010). The strategic reasons for the change should

be communicated first by project management (Gesme & Wiseman, 2010). Then, express the

practice's and patients' visions for what will happen, how people will be engaged, what is

expected of them and their team, and why it is important (Gesme & Wiseman, 2010). Ultimately,

giving staff members the chance to share their perspectives is critical and greatly contributes to

minimizing both the resistance and the duration of the project at VVH.

Loss of Volume

After careful analysis, it was found that the VVH orthopedic center had experienced a 6%

loss in volume in September down from its average case volume of 288.57of surgical cases (see

Fig.1). Equally concerning was Dr. Gupta’s decrease in surgical case volume from his 87.25

average to just 61 patients during September (see Fig. 2). The project team identified that the loss

of volume was the result of surgeons moving their surgical cases to an outside ambulatory

surgery center (Health North). According to ASCA (n.d.), ambulatory surgery centers can relieve

the frustrations of scheduling delays, limited operating room availability, slow operating room

turnover times, and budgeting restrictions for obtaining new equipment that are commonplace in

the hospital setting. Additionally, when VVH had attempted to standardize the procedures and

devices of their orthopedic center to increase the profitability of each surgical case through

Medicare payments, the orthopedic surgeons resisted and took their surgical cases elsewhere.

The ASCA (n.d.) finds that physicians appreciate the autonomy that ambulatory surgery centers

have provided them with from the ease of convenient scheduling, to the specifically-designed

facilities and preferred equipment available for them.

 Retention and Expansion of Volume

Physicians have long operated in fee for service environments and built upon this

knowledge to inform their practice and their approach to everyday work. With the transition to

bundled Medicare payments and the surmounting pressure due to the ambulatory surgery center

competition, physicians are slow to buy into the future and the standardization of practices. The

degree of influence that physicians have on transitioning to this new care structure is large, with

70% of health care expenditure considered a direct result of their clinical judgments (Ogundeji et

al., 2021). Involving the physician partners in the creation of the new or updated standardized

processes under the new payment model will be vital. This idea further emphasizes the Institute

for Health Improvement (IHI) quadruple aim. To be successful in managing healthcare, you must
focus on cost, quality, access, and care team engagement. Furthermore, according to Dr.

Berwick, IHI’s president, competition is not the answer either, it contributes to the problem.

Instead, he says to focus on a common purpose, an aim, and you will succeed together

(MacDonald, 2017).

To address the volume and payment model concerns, the first process suggestion is to

form a project team that will support and provide oversight of the new initiative changes. First,

recruit the key stakeholders. To establish group rapport, complete a listening session with the

stakeholders to better assess the current state of the team. Key questions should be asked to

confirm their understanding of the new payment model, the degree to which this impacts their

work, and their shared goals and priorities for their work. By gaining an understanding through

listening, the project team will be able to identify key gaps, co-design strategies to narrow these

gaps, and better engage the team throughout the process (Thuerbach, 2013).

From the initial assessment, 1-3 aims should be identified for the team to work on. The

aims should be specific, measurable, and contribute to the system or department level goals. An

example of an aim could be, by March 2022, identify, test, and evaluate three care efficiency

process improvement ideas under the bundled payment model. This aim is appropriate because it

will help the team reach their goal of transitioning to the new payment model and engaging the

team in solutions. Using project management tools, identify the key work breakdown structure

and how to report on the progress. Identification of key performance indicators is recommended

and could include metrics like patient satisfaction, average number of surgeries per month,

number of care procedures with process mapping and more. Continue working through the

process of aim identification, assessment, evaluation, and either adaptation or adoption of the

new practices.
 Suggestions for Recapturing of Volume

To address the competition concerns, consider working with VVH’s marketing team to

assess the market. This information will inform the team on how to best design the orthopedic

center to meet the demand. For example, a study by McKinsey cited that a patient profile is a

strong indicator of where a patient will access care. Ambulatory care sites are not always the

patient’s best option, and there may be opportunities to continue capturing the right patient for

the VVH location (Kumar & Parthasarathy, 2021). Consider working with a project team to

better understand the current market and patient mix and create strategies to retain patients and

volumes at their appropriate care access points.

To address the recapture of physicians, seek to understand the physician’s apprehension

and concerns. Having a true understanding of their wants and fears with the changes will be key

to developing a plan to overcome them. Consider using a coach, or someone who has a good

relationship with the physicians, to capture the information. Identify key themes and prioritize

concerns together. It is extremely important that leadership and physician values are aligned;

professional satisfaction was higher for physicians when values aligned with the leadership’s

(American Medical Association, 2013).

The second suggestion would be to prioritize physician autonomy and flexibility when

working through new initiatives (American Medical Association, 2013). A great place to start is

with transparency. Providing physicians with clear expectations on how their work will be

impacted and giving them autonomy to choose in areas that matter most is a suggestion from an

AMA report. For example, if the standardization plans require paring down to only one type of

device or medical supply for a specific set of surgeries, create a subcommittee to research and

choose the best fit for the majority. This approach will create buy-in by having the team
members complete the work and provide suggestions to the larger team, versus telling them

which supplier or device is correct. Establish regular meetings with physicians to understand

and support new initiative work. To stay ahead of any potential issues, establish regular feedback

loops that address concerns and barriers timely.

The last suggestion would be to consider a referral network or preferred location contract.

This will require some creativity on VVH’s legal and contracting teams, but there may be an

opportunity to recapture volume and maintain physician autonomy. VVH could consider

contracts with third-party payers or through employers directly. NOVO Health is a great example

of bundled payments, preferred provider networks, simple billing, and built in incentives

(Patient App Experience, 2021). They have built programs that connect patients, employers, and

providers for speciality care, like orthopedics.

 DMAIC table

The VVH project team developed a DMAIC table to assist them in developing a plan to

resolve the loss of surgical case volume. The project team defined the problem as three primary

challenges: the loss of volume, the surgeon dissatisfaction with VVH’s change to standardization

of procedures and defection to North Health, and the need for VVH to standardize their

operations to maximize Medicare payments. The quantitative data provided was the patient

caseload numbers for the year that demonstrated a decrease from the average case volume of

288.57 per month down to 272 in September. Specifically Dr. Gupta’s caseload number

decreased significantly in September from his average of 98 patients per month down to 61 in
September. Analysis revealed the root cause of the problem was concluded to be surgeon

dissatisfaction with VVH’s facilities and changes for standardization of procedures, and the

perceived loss of autonomy. To improve the current situation at VVH it was determined that a

market analysis will need to be conducted, input and feedback on standardization of operations

will need to be collected from stakeholders, physician autonomy will need to be prioritized, and

the implementation of a preferred location contract/referral network considered. Following these

changes, there will need to be controls in place to monitor. Monitoring of VVH’s KPIs, patient

satisfaction surveys, and case volumes will ensure the new processes are meeting all stakeholders

needs and identify if any changes are required.

PMI Project Charter

Project Charter

Project Mission Statement

This project for VVH will turn around decreasing patient volumes to the orthopedic services center
and standardize services as necessary to maximize reimbursement, while also working to retain
orthopedic department staff and physicians.

Project Purpose and Justification

Vincent Valley Hospital and its orthopedic center have seen its patient volume drop due to several
factors and have sought to rectify this volume drop. New reimbursement and payment regulations
created by the Affordable Care Act have
made it necessary to standardize the procedures of orthopedic services to maintain profitability for
companies like VVH. Additionally, care standardization can help streamline the patient care process
and increase scheduling availability for more patient volume by decreasing overall time patients
spend in the care of the orthopedic center. The project team will work with the existing staff of the
orthopedic center to determine best means to standardize care. The project team will reach a
resolution in which standardization is put in place to maintain adequate reimbursement for
orthopedics without jeopardizing the work requirements of the orthopedic medical staff. This
project is part of a larger necessity for VVH to optimize its treatment processes to abide by new
ACA-related guidelines regarding bundled payments.
High-Level Requirements
· Meet patients’ orthopedic service needs in a timely manner while retaining both orthopedic
medical staffing and overall profitability through reimbursement
· Strong financial interest in supporting the change in procedure standardization.
· Examination of the practitioner perspective, the physicians and associated medical staff
· Adherence to new laws and the Affordable Care Act's stipulations
· The federal initiative to standardize medical practice
· Addressing competition from other medical centers and factors that continue to put pressure on
its medical staff to standardize care.
· Communication with the surgeons to gather input and feedback to determine their preferences
for operations and devices to achieve stakeholder support and retain their service commitment to
VVH while still maximizing Medicare payments per case.
· The project team will need to study VVH orthopedic center's operation rules and procedures and
compare the results to those of Health North's operations.
· Minimize case losses to Health North.

Assigned Project Manager and Authority Level

Karen Blumn (CNO) will lead this project. Karen is responsible for managing all project tasks,
scheduling, and communication regarding this VVH project and has the authority to make changes
to patient care processes and work closely with orthopedic medical staff to develop a workable
solution to standardization and optimization that works for all associated parties and continues to
provide positive outcomes for patients.
Summary Milestones

Start Date Project Milestone

1 November 2021 Project start.

1 December 2021 Weekly project meetings scheduled with the project team and
orthopedic center staff.

1 January 2022 VVH offers the potential solution of physician retention and
volume loss. A preliminary implementation map of
standardization procedures should be developed for July 1 roll-out

1 March 2022 Finalize development of implementation map of standardization

for project team and orthopedic staff approval.

1 June 2022 Test roll-out of standardization procedures in VVH orthopedic

center to gauge impact on operations.

1 July 2022 Start of new fiscal year: Full roll-out of approved standardization
procedures.

1 October 2022 Review of project outcomes and current status of standardization

process to identify any needed changes or updates

1 December 2022 Roll-out of updates. Possible referral program implementation.

 Stakeholder Influences
The following stakeholders will influence the project:
· VVH Orthopedic surgeons and staff: They will strive to do the best possible work both for their
patients and for their careers and seek a hospital or health system they believe capable of adequately
supporting that goal.
· VVH Leadership: Will strive to optimize the performance of their orthopedic services center
and glean maximum reimbursement for these services under the new payment and bundling system
created by the ACA.
· Patients / community: Will demand sustained and affordable access to necessary health services,
including orthopedic services, and the nature of this demand will dictate to both VVH and Health
North the levels of service supply required to support the community’s health needs.

Functional Organizations and Their Participation

· American Medical Association
· Health North surgery center
· Affordable Care Act’s system of bundling payments.

Organizational, Environmental, and External Constraints

· Success will depend on flexibility of orthopedic physicians and medical staff to adapt to
necessary changes in standardization
· New laws, regulations, and Affordable Care Act (ACA).
· VVH leadership will have to work within the bounds of restructuring allowed by the orthopedic
staff to make necessary standardization changes without losing staff.
· Loss of autonomy and freedom to care for individual patients in their preferred ways leading to
physicians’ resistance to changes at VVH.
· VVH leadership will need to consider its impact on local competing organizations, as Health
North will remain a direct competitor for orthopedic services.
· Patients will need to understand the changes being made, why they are being made, and the
impacts/changes that may come about with the process of their care.

Business Case: ROI

A budget of $100,000 should be anticipated to manage needs associated with regular meetings and
the production of necessary marketing and PR materials to inform project associates, the broader
VVH employee base, and the public about changes in care processes that come about as a result of
this project’s completion. If a referral program is necessary to recapture lost patient volume, we
would anticipate a budget of $50,000 to initiate and market this new program.

Proposed Project Sponsor

Susan Francis (CEO), Vincent Valley Hospital

This project depends on compromise between groups and increased communication and

transparency. The project process itself will involve regular meetings and communication
sessions between VVH executive leadership and the medical staff of the orthopedic services

center. Meetings should be held weekly or every two weeks to ensure all parties are informed on

the project’s progress and what can be expected in the near future. These meetings would be

pivotal to gaining the orthopedic physicians’ perspective on this and understanding why the

previous attempt resulted in some of them leaving VVH. Additionally, the open meeting forum

this charter allows for would also allow for VVH leadership to explain the necessary nature of

these changes to the physician, as every healthcare organization will have to roll out case

standardization sooner or later in order to maintain profitability during the expansion of ACA-

mandated payment bundling. Not only would this allow for the orthopedic team to see the VVH

leadership perspective, but it may provide rationale for them to not move their caseload to Health

North. With the increased transparency, and ongoing open lines of communication, the project

outcomes should prove more positive than previous attempts. Additionally, this project makes

space for further changes if needed, including a referral program rollout to help recapture

volume, though this is placed near the conclusion of the project to ensure it (and its associated

costs) would only be utilized if it is needed to recapture lost volume and revenue. In all, this

project charter would help to keep the long-term goals of the project on track, keep

communication lines open throughout, and manage costs and resource usage, to ensure a net

benefit for all parties upon project completion.

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