Wilson Shores Up St. Ed?s Surgeries

Monte Wilson has turned St. Edward into St. Efficiency.

The vice president of cardiology, imaging and surgical operations at St. Edward Mercy Medical Center in Fort Smith, Wilson estimates the hospital has saved $500,000 since 1999 by improving its supply chain and perioperative surgery management.

Dr. Stephen Heim, an orthopedic surgeon at Fort Smith’s Cooper Clinic, said that a half million dollars is probably even a conservative estimate.

“Traditionally, hospitals are really bad about managing surgery supplies and OR time,” Heim said. “What Monte has been able to do is pretty well tell you what a minute of OR time should cost per case. A lot of other hospitals don’t have a clue, so when they negotiate a contract, they don’t know if they’re making money or losing money on a case.”

The humble Wilson debunked the notion that he has personally helped improve St. Edward’s profitability. He credits a robust Cerner Corp. software system the hospital integrated in 1999 and the cooperation of nurses, physicians and staff.

Regardless of where the backslapping belongs, chunks have been carved out of St. Edward’s supply waste on Wilson’s watch. During the second quarter of 2003 alone, the company identified between $50,000 and $70,000 of savings related to improved efficiencies.

St. Edward was the most profitable hospital in Northwest Arkansas last year, recording nearly $8.4 million in net income. It was one of only two area hospitals that cracked the state’s most profitable Top 10, along with sister company Mercy Health System of Northwest Arkansas Inc. in Rogers (see chart, p.14).

St. Edward booked $249 million in 2003 assets, or about $40 million more than the next largest local entity. The 349-bed hospital employs about 1,600 people at its 952,814-SF facility and serves patients from 14 counties in Arkansas and Oklahoma.

John Hoffman, St. Edward’s CEO, said Wilson and the surgery staff involved with joint-venture St. Edward’s Mercy Outpatient Surgery Center LLC have worked to improve both efficiency and safety in the operating room.

“Money we save on the bottom line is money we’re able to put back into purchasing new technology that we need to stay on the cutting edge of bringing better health care to the community,” said Hoffman, who plans to retire at year’s end.

Wilson pointed out that St. Edward, which completed a $70 million expansion in July 2003, has made and additional $10.5 million worth of local capital investments in the last year.

That’s the direct result, he said, of being able to control costs.

“Our supply costs increase every year, but we don’t automatically pass those on to consumers,” Wilson said. “Our reimbursements are not skyrocketing. When you hear health care costs are up 20 to 30 percent, we’re not getting that.

“There are pressures on the market that are beyond our control, but what we can do is improve our own operational efficiencies.”

According to Owens & Minor, 30 percent of the average hospital’s inventory chain is on the books, 20 percent of surgery supplies are obsolete and 83 percent of those supplies are slow-moving or dead stock.

Price Waterhouse Coopers estimates that annual American medical/surgical costs exceed $75 billion, and that the supply chain process accounts for 38 percent, or $29 billion of that.

The accounting firm estimates there is room for $11 billion worth of improvement in the segment.

Managing Overhead

Wilson used to be responsible for tracking 8,000 pieces of medical supplies per day. Just in the last year, he’s cut that number to about 7,000.

The Fort Smith native still oversees more than 250 staff members including 74 surgeons, and his departments still perform more than 25,000 annual surgeries. The difference is he has worked with physicians to standardize more of the products the company uses.

Instead of stocking five different brands of surgical bone screws for a particular surgery, for instance, St. Edward may have whittled that down to two brands. Wilson said the hospital sat down with its surgeons and worked through evaluating products together. Maybe there are two brands of sutures that are the same quality, but one is $5 less. It’s about cooperation, he said.

“You can’t anticipate everything you’re going to come up against in, say, the trauma ward,” Wilson said. “You have to have a variety of products at different levels there to ensure quality care. But you don’t have to have every brand of every piece in the world.”

Obsolescence is another inventory battle. Technology and medicine are advancing so fast, sometimes a whole line of supplies might become outdated. And tracking the dispersal and use of supplies throughout the building used to cause overstocking. Now St. Edward’s new system juggles everything and prompts efficient restocking.

Better volume control has also enabled Wilson to negotiate better with vendors.

“I know for a fact other hospitals in the area pay far more for things such as surgical implants than St. Edwards does,” Heim said. “Monte has worked to get us some of the lowest prices in the country.”

Casting SurgiNet

Wilson’s secret is the SurgiNet software suite by Cerner, a health care information technology firm in Kansas City that provides clinical IS data over a unified architecture. The systems cost about $500,000 for an average hospital, but St. Edward declined to say exactly what it spent.

Even prior to St. Louis-based Sisters of Mercy Health System starting its Genesis Technology initiative, St. Edward began using electronic medical records (EMRs) to streamline information and safety precautions. The hospital worked with Cerner to tailor the system for its needs and became the alpha test for the software.

Sue Tarkka, marketing manager for Cerner’s SurgiNet Perioperative Solutions product line, said Wilson played a lead role in advancing the technology that will eventually benefit other hospitals.

“Monte’s leadership style is such that he creates collaborative environments with key stake holders and makes it everyone’s business to care about the results they achieve, whether it’s caring for patients or managing the bottom line,” Tarkka said.

A fully automated system of “preference carts” is used to keep a steady, yet super organized and monitored, flow of supplies into the OR. Carts are created by doctor requests, and OR suites are also stocked with additional items to ensure safe care.

Faster Turnaround

Tarkka said much of the return on investment St. Edward has experienced has been through inventory management. But operational metrics are also on the upswing.

Wilson agreed OR turnover times, or the time it takes to re-setup an operating suite between patients, has improved dramatically. It’s not that St. Edward is trying to wheel patients through the doors, but it’s about making the best use of resources and time management.

Wilson said if St. Edward’s OR turnaround time was 25 to 30 minutes, it’s more like 10 to 15 now because of SurgiNet and Cerner’s Materials Management component.

“If we say we’re starting at 7 a.m., we’re starting at 7 a.m.,” Wilson said. “One orthopedic surgeon here used to start at 7 a.m. and not finish until 2 p.m. Now, he’s out of here by 10 a.m. or 11 a.m. What has happened is the satisfaction of the patients, families, doctors, nurses and staff has increased. So the hospital is not just saving dollars, it’s improving service.”

Oil Rigs to Bed Pans

Wilson earned his bachelor’s degree in business accounting from the University of Arkansas and started work in the oil and gas industry. In 1989, he began a six-year stint with National Surgery Co. in Nashville, Tenn., the largest surgery firm in America. It was eventually bought out by HealthSouth, where Wilson stayed on until 1999.

That’s when St. Edward recruited him home. He joined the hospital as president of the joint surgery venture, and has been promoted multiple times since then.

“There used to be a lot of fat in the system in medicine,” Dr. Heim said. “But with the demands insurance companies and government have put on the average person who has to reach into his pocket, we just had to get better. Monte has been a big part of making that happen here.

“He was a businessman first, and then he learned the medical field. Because of that, he can talk on such a higher plain. He’s the fourth director of surgery we’ve had in my 20 years, and it’s scary how much he knows. He knows more than the other three combined.”