1. Re-engineering Cardiac Catheterization at Cornell Medical Center
$8M deficit in 1997
$5M surplus in 2000
1997 Balanced Budget Act average 20% reduction in reimbursements
Objective:
Do more procedures without adding expenses!
8M in the summer of 1997
5M in the black in the summer of 2000
Average 20% reduction in reimbursements, higher for many big ticket items.
Build-out of three new cath labs, acquisition of several new pieces of imaging, opening of two off-site facilities, renovation of waiting room.

2. The Rules of the Game:
Competitive Industry – lots of providers in the NY Metro Area
1997 Balanced Budget Act reduced reimbursements by 20% on average
HIPPA – Health Insurance Portability and Privacy Act of constrained options for managing information and monitoring
Billing requirements for specific information (Medicare, private)
Institutional constraints on salary, bonus
Social and cultural position of physicians, nurses, techs, secretaries, administrators

3. Physicians had all the decision rights
The Problem:
Physicians had all the decision rights
Secretaries lacked specific information about schedules
Pre-op and lab lacked decision rights
No communication at all with billing (no accountability)
Everything on paper
No standardized procedures for scheduling
Physicians had decision rights over everything
Billing had accountability but no information or authority

5. Scheduling Pre-op Procedure Billing
Specific Knowledge (costly to transfer)
Patient anxiety
Scheduling difficulties (e.g. transportation)
Patient status
Updated lab, bed, staffing schedules
Emergencies
Patient status
Equipment status (including inventory)
Procedures
Contract requirements
Coding requirements
Paper records and lack of accountability made these costly
Cannot monitor secretary interactions – to frequent, time, cannot record due to patient confidentiality
Schedules used to be specific knowledge prior to computerization!
Much of the insurance requirements used to be specific knowledge too
Paper medical records made it more costly to transfer all types of information!
General Knowledge (NOT costly to transfer)
Insurance
Demographics (name, etc.)
Lab schedule,
MD & Staff schedules
Pre-op procedures
Lab procedures (what happened in the lab)

6. Insurer & Vendor Contracts Billing Procedures Lab procedures
MORE types of goods
Secretarial Support
Waiting rooms
Inventory
Insurer & Vendor Contracts
Billing Procedures
Lab procedures
Chart from p. 645 with overlay picture examples from the hospital
Electronic Medical Record
Billing Systems
Scheduling Systems
Cath Lab
Pre & post-op beds
Medical Records
Inventory

7. Decision Rights Monitoring Incentives Patient Scheduling
Periodic reviews
Trouble-shooting
Monthly service awards
Annual raises
Patient clearance
Day-of schedules
Staff schedules
Periodic reviews
Trouble shooting
M&M meetings
Monthly service awards
Annual raises
Procedures
Equipment
Staff schedules
Periodic reviews
Trouble shooting
M&M meetings
Weekly inventory
Specific compensation contracts based on productivity
Billing codes
Question team members
Daily reconciliation
Monthly audits
Billers on site!
Productivity bonuses
Promotion
Administrative staff can schedule without checking with doctors first.
Doctors responsible for updating on-line schedule
Pre-op nurses have final call on patient readiness – do not have to check with doctors first
Charge nurse has final call on daily schedule, Administrator resolves conflicts
Techs and doctors have total autonomy in the lab.
They are expected to know the insurance requirements (automated) and manage inventory
Billers have final call on billing codes – do not have to check with doctors
Administrator has final call on overhead, scheduling conflicts, performance reviews
Overtime
Scheduling conflicts
Insurance contracts
Budgets
Annual reviews
Trouble shooting
Monthly & annual reports
Annual raises
Career advancement

8. 2. Visibility, horse trading and trust-building
Implementation
A Crisis never hurts…
1997 Balanced Budget Act
Budget Act has teaching hospitals awash in red ink
2. Visibility, horse trading and trust-building
3. Employee training and turn-over
4. New Technology

9. Summary
We were forced to do more with less, which means we needed to be FASTER and more EFFICIENT.
Speed and Efficiency required a dispersion of decision rights and new information technology to transform specific knowledge into general knowledge.
Crisis, personality and persistence.