Michael 01:29
Hey, Eugene, welcome to the show. It’s great to have you here.

Eugene Litvak 01:32
Thank you for inviting me. It’s my pleasure to be here.

Michael 01:36
So I was really looking forward in speaking to you when your profile came across my desk because I am personally interested in healthcare, and specifically the way hospitals are managed. Now I’ve only had one opportunity to interact with the American healthcare system, because I’m not American, but from everything I’ve heard, people always complain about hospitals in America. How bad is it.

Eugene Litvak 02:03
Let me explain it to you, please. First of all, I would not say that just America. What happens to the hospital? I would call it like international plot against the health care. Oh,

Michael 02:17
I like a mystery.

Eugene Litvak 02:18
The same what I’m going to say it’s true for every country. It’s true for Canada, it’s true for UK, it’s true for Europe, it’s true for Middle East, you name it. So let me I will not be able to list all the problems that hospitals experience today.

Michael 02:40
Well, let’s give us the big ones.

Eugene Litvak 02:43
Yeah, let me give you the big ones, a few big ones. Emergency Departments are overcrowded. Okay, I can tell you, in Canada, for example, they’re periodically closed so the people can drive care, to drive the sick, to drive to the hospitals, you know, 100 kilometers from where they live, because the nearby hospital closed the emergency department for a while. The next why? Next one internationally is no shortage that practically all the countries experience that. The third one I would name, it’s healthcare cost. Obviously the hospitals are being squeezed. Healthcare, at least in the US, dozens of years ago, used to be cost plus reimbursed, yes, not anymore, so the hospitals have still the mindset that has been developed years ago and under financial pressure today, I would let me describe the health the hospital operations, not necessarily again, The US. It’s central for many other countries, what? What I, you know, learning and give work, our institute, non for profit, Institute for Healthcare optimization, where I’m a CEO, working with hospitals, helping them to address those issues on a regular basis. And the more I learn, the more experience I have that reminds me the story like an old gentleman was going to marry and he asked his wife to be. He thought he rather, told his wife to be. I have to be honest with you, I have a problem with my knees. I have a problem with my back. I have a problem with my vision. She interrupted him and say, Tell me what the dog have. And he said, peace. So that describes what is going on today at the hospitals.

Michael 04:55
So you made a point here that it’s happening all over the world. But not just in the United States. What has changed in healthcare that has caused this is something changed in the last few decades.

Eugene Litvak 05:08
First and foremost, I would say that no country that could afford rapidly growing healthcare costs in the US, for example, this year, if I’m not mistaken, it’s between 4.8 and 4.9 billion. Sorry, trillion, 4.84 point 9 trillion. That’s a huge amount of money. 1/3 of this, typically, is being spent for the hospitals. So what I would say that the main problem is that the hospitals are no longer health care reimbursed, yes, and it’s very difficult to change the mentality. If I tell you, for example, that your salary is going to be 10 million a year, and you live like that for a while, but then I say, Okay, starting tomorrow, it’s going to be 100,000 I’m exaggerating to make my point. 100,000 is still, you know, livable amount of money, but you are not used to this amount of money, and your spending habit is remain the same. So that is the problem, that the hospitals under significant pressure. Second reason I remember very well 20 years ago, the hospitals were firing nurses in order to save money. When HMO penetrated the market, Health Maintenance Organizations penetrated the market and started controlling the healthcare costs, the hospitals were looking, where can we save and nurses? Is significant. You know, expenses for the hospital, even now, when we have fewer nurses and cannot afford staffing on a high level to the patient demand, even now it exceeds, conservatively, 50% of the overall hospital budget.

Michael 07:19
Wait, let me just unpack that for a second. Did I hear that correctly? That the labor cost for nurses is 50% of the budget at least,

Eugene Litvak 07:26
At least, that’s a big number. It’s a big number. And what happened many years ago, it was much more so. If you look at the hospital bedrocupans, it reminds EKG with the alternating peaks and wells. So again, dozens of years ago, we used to staff at the peak level. Not anymore. People cannot afford it anymore, so the hospital for two reasons. First of all, we don’t have resources again, even now, we don’t have resources. When we staff approximately on the level of average demand, we still don’t have resources. It’s 50% plus of the hospital budget. But those good times when we were able to staff at the peak are gone. So the hospitals, when they stop based on the average demand, they experience problems. So whenever a patient bed occupancy, the number of patients that occupied hospital beds, whenever it is greater than the staffing level. It has been documented in dozens and dozens of scientific studies. You experience nursing burnout, shortage, medical errors, mortality, readmissions, practically everything so that’s a problem that every hospital experiences today, and what happened to the nurses, by the way, if you are subjected to excessive workload, what would you do about that? You could if your boss, you would start demanding. You would start demanding adequate patient per neurostocking ratio. For example, it has been documented over 20 years ago that for surgical post operative patients, the good safe, I should say, number of patient per nurses form. Practically nobody has this, you know, luxurious staffing ratio and the regular surgical floor. So nurses are getting burned out. They’re taking care of many more patients than they should. They cannot provide adequate quality of care. But. Obviously you’re running this podcast, your host of this podcast, what if somebody would ask you to simultaneously, simultaneously host another podcast at the same time as we thought would not be possible for you? The same is true for a nurse. They cannot provide adequate care and what they nurses, how they should react. They are looking at the job outside of the hospitals. They keep demanding nurse staff, increasing in patient staffing ratio. But, you know, it does not happen. So they’re getting burned out. There were two episodes, if I’m not mistaken in California that two nurses committed suicide and attributed that to their door.

Michael 10:49
Now I have a question, if I may, is to help the listeners follow, and it’s also personally interesting to me, right? So we’re spending more on health care in the United States. Big numbers, four or 5 trillion. You mentioned that nursing used to be a bigger portion of the labor cost. It’s now around 50% at the same time, we have fewer nurses per a patient, or the ratios are big, fewer nurses caring for more patients. So if all those costs are being born by customers, we’re all paying more every year. And if this money is not going to nurses, where is the money going?

Eugene Litvak 11:24
First of all, let me try to explain. That’s a very good question. Sergey, why does it have the very important contributor, baby boomers?

Michael 11:35
Baby Boomers,

Eugene Litvak 11:37
absolutely,

Michael 11:38
I’m one of them. One of the zero experts,

Eugene Litvak 11:41
yeah, I’m the guilty part.

Michael 11:44
You’re guilty as Chad. So how a baby boom is driving this boom in healthcare costs?

Eugene Litvak 11:49
Yes, but that’s not it. I can tell you that COVID contributed a lot to that. So many nurses were living profession, okay, some of them because of the workload, some of them because they didn’t want to be vaccinated. Some of them were concerned about bringing infection into their families, etc, etc, so and then what nurses learn that there are other places to work for them. They could work at school, they could work somewhere else. They could retire. Many nurses who were not planning to retire, COVID prompted them to retire, and that is why we have national growing shortage of nurses. And now what nurses? What else they were doing? That’s an interesting effect. If you’re a nurse and you work with your peers and a particular floor and one of your colleagues going to the nursing agency and becoming a becoming traveling nurse. So they pay much more than you do, at least twice, and she does the same. She comes back to your hospital. She’s next to you, doing what she was doing yesterday, and being paid twice. What would you do? You do? You would follow your footsteps. So more and more nurses went to this company for traveling nurses being hired as traveling travelers, and that is much more expensive for the hospitals. The hospitals cannot afford it. So when the nurses asked for adequate patient per nurse staffing ratio frequently, frequently. That results in finger pointing, saying that the hospital C suite, they don’t care about nurses. They don’t do what they should do and they should provide adequate number of nurses. They can’t they can’t because they cannot afford and they cannot make nurses out of the thin air. You have shortage of nurses and shortage of funds in this environment. They simply cannot deliver

Michael 14:14
you mentioned boomers. How are boomers linked to this?

Eugene Litvak 14:18
People live longer, and they’re becoming acutely ill. And you know, the world, there is a person more acute like this person likely to be so their diagnosis, their disease, has taken longer to stay at the hospital, typically.

Michael 14:40
So I’m just unpacking these things for the audience, right? So the whole healthcare system is trying to keep people living longer, but the longer they live, the more likely they’re to have problems. And this takes up time and capital and the time of nurses in the hospital system, yeah, oh, I can imagine how bad it must be. Dependent.

Eugene Litvak 15:01
Yeah, correct. And you, if you they do have shortage of nurses in Japan. They do have this problem acutely. Now, if you compare baby boomer, this 20 years old, who also has happened to be admitted to the hospital for whatever reason, you understand that the level of acuity and the length of stay and the resources they require would be very different, typically, and

Michael 15:27
this is interesting. When we started the discussion, I had assumed that we would be talking about the rising cost of medicine, the rising costs of doctors salaries, and the advent of private equity, getting involved in hospitals. But are these not the main drivers?

Eugene Litvak 15:46
I cannot say. So there are other drivers among those, everyone that you mentioned. Yeah, it’s, first of all, it’s new medication that are expensive and everybody wants to get the last the most you know, effective one, and it happens to be the last one that costs money. Second is medical technology, different equipment that keeps growing and ask for more and more resources. However, while we mention all this, I will say, quote, unquote, legitimate expenses. There is a waste, and the waste, let me quote a couple of numbers. I happen to serve in 2012 on the Institute of Medicine. Now it’s a National Academy of Medicine Committee on the Future of United States health care, and we found that probably 25 plus everybody, when it was 25% waste than those who health policy analysts, prominent People in the US, they told me that I’m underestimating that. Yes, so but let me, let me underestimate. Let’s do it. Let’s face 25% 25% of the healthcare cost waste, if we spend today 4.8 trillion, we are talking about 1.2 trillion waste,

Michael 17:24
waste, W, A, S, T, E, waste

Eugene Litvak 17:27
correct. And I can tell you this waste is greater than the overall I believe last year. Don’t quote me on that, but I’m almost short on the time correct the over overall expenses on the military military budget. Defense budget in the US was less than 1 trillion.

Michael 17:53
Yeah, I think it was 880 billion last year.

Eugene Litvak 17:56
Yeah. So we are based in more than time military constraints.

Michael 17:59
That’s a shocking statistic.

Eugene Litvak 18:01
And what do we get for this money? Okay, let us look what different sources, what different numbers? The one that I’m familiar with is between 250 1440 1000 avoidable deaths per year.

Michael 18:19
That’s a big number, but break down the waste for me. How are we defining waste?

Eugene Litvak 18:24
Yeah, that’s expensive. That could be avoided, okay, but I’m not an expert in other types of waste. I’m more familiar with the area where I’m working, is the waste due to mismanagement of operations.

Michael 18:45
So when you say operations, you mean the general running of a hospital?

Eugene Litvak 18:51
Yes. And to be more specific, is patient flow. The patient comes to the hospital either for surgery or for emergency. Yes, yeah. And then the person you know travels through the hospital from emergency, potentially to intensive care, and then potentially to the regular medical ward, then the discharge, going home, etc. So this patient journey through the hospital is patient flow, and this is what is definitely mismanaged in the at the vast majority of the hospitals.

Michael 19:30
So this are unpacked things for the listeners, right? The one issue is the significant nursing labor costs, which are at least 50% but they have come down from 1020, years ago. It used to be higher than 50%

Eugene Litvak 19:46
it wasn’t shy. Look, you know that when you have a demand capacity equation, when the demand significantly greater than capacity? Yes, then the cost of this, I shouldn’t say, product, whatever we are talking about, goes up.

Michael 20:06
Yeah, for the listeners, it’s a classic problem. If you look at an airport, for example, when you build an airport, you build it to manage peak traffic, but that peak traffic doesn’t last the whole day. It may last only 10% of the day, and you’ve got the rest of the facility, which is basically just they’re doing nothing, and I’m assuming hospital would have the exact same problem, and you’ve got to manage. Is it not the same?

Eugene Litvak 20:30
Not necessary, but it does happen. It does happen. But at the hospital, it’s worse. Why is it worse? Let me try to explain it. Imagine that you are going in February, when it’s cold. I do not know which country you’re talking.

Michael 20:51
Okay, let’s imagine, yeah, it’s cold in February.

Eugene Litvak 20:55
Yeah, it’s cold, yeah. So February you’re coming. You’re driving on the three or four lane shy way to the place where you would like to be in the hot day. So, and let’s describe it, this scenario, as February, two o’clock in the morning on the three lane shy way you’re driving to the sea, ocean, forest, whatever you like. Again, it sounds like a crazy scenario, but I’m doing that for a reason. Okay? And suppose that on one of the lanes at that time, two o’clock in the morning in February, you see a car accident, and the cars are being surrounded by police, ambulance, etc, again, three to four line lanes highway. How it would affect your driving time to your point of destination?

Michael 21:52
Make it longer only if you’re curious,

Eugene Litvak 21:55
because there are three to four lanes and nobody else on the highway at that time,

Michael 22:01
but most people tend to be curious.

Eugene Litvak 22:03
Okay, then it would now imagine the same scenario, 10 o’clock in the morning, August or July on Saturday. So you have a very dense traffic, and then any car accident would result in a huge delay. The police would need time to get the regulars would need time together through the traffic it would take would make a significant delay. Yes, and that is our hospitals today. We used to staff at the peak of patient demand, of bed occupancy, of number of patients occupying the beds. Sometime, I was surprised to learn that historically, sometimes even above the potential peak. Now we overflow. So it’s practically this Saturday, July or August, 10 o’clock in the morning scenario, when you have a dense traffic you cannot unload it very quickly.

Michael 23:08
Well, let me unpack this for the listeners, right? So what you’re saying is that the hospitals are now working past their peak all the time.

Eugene Litvak 23:16
Mainly, I would say most of them, most of them have, I shouldn’t say they work all the time. That’s not true, but most of them, they do have peak that hit the ceiling of their capacity. That is true. Whether those pigs happen every day, absolutely not. Although, if you will talk to the hospital leadership, they will say that they have it every day. Now that’s not correct,

Michael 23:45
But it doesn’t change the fact that, as you say, We’re sweating these assets significantly. If we are running them close to at their peak, or more than they were designed to be running,

Eugene Litvak 23:56
they should not be run at the peak period. It’s man made that they’re running at the peak.

Michael 24:02
So my last question would be, seem like an obvious question that I’m sure all your students at Harvard ask you, what is the solution you can’t de bottleneck this thing because you can’t turn away patience. I’m sure it’s not one solution. But what should be the mindset shift that we would need here?

Eugene Litvak 24:18
First of all, let me get back to this pattern, that hospital bed occupancy practical. Every hospital bed occupancy is the same. It looks like EKG with peaks and valleys, yes. Then I would ask the question, typically, what a healthcare does when healthcare industries faces the problem, it starts trying, it tries to solve this problem, and rarely it addresses the cause of the problem. It just reacts to any problem as it was. Given that you cannot get rid of this problem, we have to just manage and address not necessary. What is important to get to the root cause of the problem? So let’s try to do it jointly. You have those periodic peaks and bad occupancy. What is the source? What is the cause of those peaks? Let me provide some additional information over typically, it’s not always, but typically, over 50% of all hospital admissions take place through the emergency department, the next big portal through the hospitals are scheduled admissions. Let’s say 30% those scheduled admissions are mostly surgical. Schedule surgery, but not always it will be catheterization, etc. So you have again, two quartiles responsible for about 80% of all hospital admissions. More than 80% the remaining ones are Medical Referrals, transfers, etc. And if I go on the street and ask a stranger, each one out of these two is the main source cause of those peaks. What do you think would be the answer? They would say that that’s probably arriving to the emergency department. We cannot control when people break their legs and come into emergency department, but surgery, schedule surgery you can control. It’s up to us when to schedule again, unscheduled emergent surgery. They’re coming through the emergency department, so this 30% scheduled patient demand. So they would answer this question that Ed emergency department is a guilty party. So so called based on the common sense, but the common sense and the healthcare delivery are not always compatible ahead of knowledge. Yeah. And in fact, every single hospital that we started, and we started this international and not just in United States. We found that the main course is scheduled admissions.

Michael 27:33
They scheduled admissions.

Eugene Litvak 27:37
Very counterintuitive.

Michael 27:38
Why is that?

Eugene Litvak 27:40
Oh, let me explain it to you, but one detail, you can test what I said. You can come to any emergency department at any country, short of the pandemic, epidemic or a bus crash in front of the hospital, ask in the emergency department today is Thursday, four or five Thursdays from now, how many patients approximately would be admitted to your hospitals through your emergency department? Nobody would give you exact number, but they would give you more or less accurate number in every emergency department, they will give you a number of patients that they anticipate would come unsourced again for a given season, and assuming there is no no pandemic, epidemic or a bus crash in front of The hospital. So now let us address your question, why? Why schedule admissions are less predictable than our Mother Nature? I’m not exaggerating. At some hospitals, it is easier to predict when patient would come to the emergency department with a broken leg than when it’s scheduled, surgery will take place, and

Michael 29:04
that’s very counterintuitive, so I’m going to be interested to see what the reason is.

Eugene Litvak 29:08
Yes, every boy myself, when I discover it with my colleague, reacted that this is very bad, but it gives us a glimmer of hope, because it’s fixable. So but let me first address why does it happen? Typical? Again, it’s not different. Surgeries require different lengths of state after the surgery, post surgical. But imagine that you are surging and typical surging patient, surgical patient. Length of stay is about three days. If you are short, when would which weekday you would prefer to operate. Don’t forget that once the surgery is done and before the patient is about to discharge, first of all, if you. Have to visit the patient next day and the time of discharge. You should visit the patient as well. You not you should, but would be nice, yeah, go in and visit your patient before they discharge home. So which day you would prefer to operate, I can tell if you want to spend the weekend with your family, you would prefer to operate Monday and Tuesday, because by the weekend your patient will be will already be discharged. That’s it. That’s explanation. So the surgeons prefer to operate at the beginning of the week, and the poor cousin in the emergency department typically is getting overcrowded.

Michael 30:48
That’s the main reason, because the surgeons prefer to work front load their surgeries at the beginning of the week. So given the unpredictability of rest time and recovery time, they want to give a few days so they get their weekend off, correct? Wow, they must really like playing golf on a weekend.

Eugene Litvak 31:06
Maybe, maybe I should shadow some.

Michael 31:10
There’s something on point out to people here, because it’s very important, right? In a lot of work I’ve seen across sectors, a lot of issues come down to human behavior and human preferences and a lot of analysis cannot indicate what human behavior is. All you see is a number. You need to almost be like an anthropologist and watch them for a week and see what they do and why they do it, because if they explain it to you, they’ll try to make it sound very analytic and thoughtful.

Eugene Litvak 31:40
I call it forensic pathology.

Michael 31:44
Oh, I love that. Forensic pathology. Yeah, like, that’s a good one. I was used that.

Eugene Litvak 31:50
So let me try to elaborate on that one may listen to that and say, Oh, those bad surgeons, you know, they those are greedy guys, you know, and they want to have good time off, etc, I would argue with that. Now look how surgeons are becoming the victims of this design.

Michael 32:18
Who’s become the victim?

Eugene Litvak 32:20
I mentioned emergency patients and the patient themselves, but surgeons and surgical patients becoming the victims of this scheduling system themselves. So if you talk to the surgeons at many hospitals, you will find them complaining on the phone.

Michael 32:37
So they’re complaining about it as well.

Eugene Litvak 32:41
Absolutely, they don’t understand the cause, most of them, but they complain about the outcomes. So what are the outcomes for surgeons? Imagine again that you’re surgeons. You schedule your operations, and then the ambulance comes and you cancel it because somebody will rupture the appendicitis should be operated first, so you’re being bumped, postponed, or sometimes canceled if a couple of ambulances come, you cancel. So you wasted your time at the hospital. Your patients were did not have not eaten since the midnight of the last day. Yes, they’re hungry, and they are told, oops, you’re not going to be operating today. And that would happen more than once. So patients are getting bombed, and surgeons and surgeons surgery, surgeons come to the hospitals to do the surgery, and instead, they should wait and do their email that they’re very end when it happened. That happens on a daily basis.

Michael 33:51
Yes, because it’s a limited number of facilities and support staff pre booked, you can’t just decide the night before you’re going to do a surgery. You got to have the anesthesiologist on the hand and all the support stuff Absolutely.

Eugene Litvak 34:03
So now suppose that ambulance comes, but all operating groups are already occupied. The surgeries are under ongoing there. Then what happened that this patient should wait this emergent or urgent patient should wait. And it has been documented that this waiting time increases on average, increases mortality by over 20%

Michael 34:38
just because of the delays,

Eugene Litvak 34:39
just because of the delay for emergent and urgent surgeons

Michael 34:43
this emergency planned surgeries, right? Yeah, besides a big number,

Eugene Litvak 34:49
big number, besides the lacks of staff, such patients who already deteriorated before the surgery would be significantly longer. We. About one day and one day increase of the length of stay. You’re talking about the multi million waste for the hospital, just one day, just one day. But that’s not it. Let’s talk about patient placement. So you’re a surgeon and you perform a wonderful procedure, yes. So that is what happened in 2000 with a teenage boy in South Carolina. I read a lot about this boy and learned from his mother about that very talented person. I would say I’m usually talented. I could elaborate. I just don’t have a time to talk about both his talents. Yeah, so he’s supposed to do the surgery on Monday in 2000 however, on Monday in 2000 it was Halloween, so he asked his parents to reschedule his surgery on Thursday, and they did. But on short, on Thursday, the hospital is already full. The hospital is being emptied on the weekend, so surgeons have access to the beds, but on Thursday, the hospital is full, so he’s supposed to go to thoracic surgical ward. It was no bed. There was a peak. So he had been placed in a pediatric oncology that was Thursday. After very successful surgery, he started complaining on abdominal pain. Yes, yours there cannot be trained in thoracic surgeon, and they were not able to accurately diagnose the problem. Besides, as I mentioned to you on Friday, Saturday, there is no attending surgeons on your residence

Michael 36:59
for the listeners explain the difference between attending,

Eugene Litvak 37:02
Yeah, the residents are those who are still in the process of training. Okay, while attending, surgeon is typically a good one with multi year practice.

Michael 37:12
Okay, so one’s an expert and one’s kind of Exactly, exactly.

Eugene Litvak 37:16
And that was the surge Incorporated, and he’s Louis Blair. This boy named Louis Blair, so after successful surgery, to make a long story short, after success, successful surgery on Thursday, the boy died on Monday,

Michael 37:32
and the cause is because two

Eugene Litvak 37:35
cause. One, those peaks that makes hospitals overcrowded, and second that the surgeons are absent and weakened, because

Michael 37:45
if his attending physician had been there during the week, they were more skilled, and they knew the patient better

Eugene Litvak 37:52
as well, yeah, and they would recognize the problem.

Michael 37:56
So the issue of managing the operations seems to be the foundation in which everything sits here.

Eugene Litvak 38:02
Now, let us look from the position of patient, every patient for trying or his love, your loved ones supposed to undergo surgery, how they approach this problem? They are looking for a good surgeon that their friends, relatives, neighbors could recommend, right? And surgeon cooperated on Louis Blackmon was very good, yes. So even after successful surgery, you are not guaranteed that you are not going to follow the footsteps of Lewis Blackmon, I would say, unless you come home from the hospital, you cannot say that your surgery was successful,

Michael 38:47
Yes, because it could be complications thereafter, like what happened,

Eugene Litvak 38:50
absolutely, the patient for two reasons, two main reasons, I would say, decide of surgeon absent. There first is patient misplacement in the wrong word, and that what happened to Louis Blackman, and that surgeons are very angry when it happens, because surgeons are doing miracles. In my opinion, I work with many. They are doing miracles. And after that, somebody ruined that, and the patient dies, they’re very angry. So that is this kind of stick associated with this type of schedule. But two other reasons are again wrong patient placement, the wrong floor, and the second one is the number of patients per nurse.

Michael 39:43
Yes, we’ve discussed that earlier. The ratio is way out of control. Yeah,

Eugene Litvak 39:47
if the nurse is taking care of many more patients than she should, then the chances that the patient would have a different outcomes, you know, increases just. As a couple of numbers studied by Linda Aiken. They studied and colleagues from Pennsylvania, they studied 300,000 if I’m not mistaken, surgical patients. And they figure out that one knots per four patient is safe in post surgical surgery.

Michael 40:19
But is that actually happen? One to four ratio.

Eugene Litvak 40:22
You’re asking professional question rarely,

Michael 40:25
rarely, I’ve not seen that correct, but,

Eugene Litvak 40:29
but what she what they documented, then each additional patient. So for example, nurse taking care of four patient, this is safe, but then nurse taking care of five patients, the mortality extra patient will increase the mortality for all five of those patients by 7% extra two patients would increase it by 14%

Michael 40:56
etc. But there’s obviously the cost component of having more nurses, and the second one is they’re suffering from burnout. There’s not enough nurses.

Eugene Litvak 41:07
We can pay either this money, this funds, or we can pay this wise management. We can pay with smoothing those schedule, and when you even those schedule, the results are astonishing. I can tell you the book, the results are astonishing. I just want to show you the book that is going to be published that requires the story of Louis Blackman and several others. There is a solution to that, when you smooth those speeds, when you help surgeons to smooth those speeds. They’re receptive when they see the outcomes. Look what happened at the Cincinnati Children’s Hospitals, for example, they significantly increase surgical volume significantly. It’s like again, a highway if you send from point eight to point B, 20 patient, then 100, then zero, then 10, you will have a throughput. You will send many fewer patients, many fewer cars. I should have said that is to send them in a steady state law. So at Cincinnati children, they dramatically increase their surgical case volume, treating more kids, and financially they benefited. They reported 130 7 million a year plus.

Michael 42:31
And this is purely around operations management, of smoothing

Eugene Litvak 42:34
on this intervention, and that is in public domain, besides, in order to accommodate those artificial peaks that we discussed, they already budgeted a new tower, pet tower, of 75 beds for the cost of over 100, 102 if I’m not mistaken, million in capital costs.

Michael 42:59
So by smoothing out the peaks, they increase the cash flow, which allowed them to increase their capacity.

Eugene Litvak 43:05
Yeah, and they actually abandoned this tunnel already budgeted

Michael 43:11
in terms of what they did with nursing. Did they do anything different with nursing staffing issues?

Eugene Litvak 43:16
Very good question. Thank you for asking another hospital that we were working with as a Mayo Clinic in Florida, when you talk about nurse shortage, there are not all nurses are equal. There are nurses that is more difficult to get, even if you are ready to pay Yes, and those are typically intensive care, but even more, operating room nurses. Why? Because they work like like a team, the sergeants and anesthesia, and if a new nurse comes, it takes time for them to become an efficient team. It makes sense. So even if they have money to hire the traveling nurses, it would take time before they would get back to normal efficiency,

Michael 44:04
before they learn how to work with their team Exactly.

Eugene Litvak 44:08
So what happened at the mayor clinic in Florida in the very first year? They cannot even completely smooth the peak. There was another intervention that kept the nurses there, their nurse retention increased by 43% 43 fewer nurses were living in the operating room. That’s a big number.

Michael 44:31
That is a very big number. That’s also a situation where nurses sometimes move if a surgeon they’re working with moves.

Eugene Litvak 44:40
I’m not funny. I cannot elaborate on that that I don’t know.

Michael 44:45
Fact is, it takes time, even if you can hire the nurse, to get them to work the way they’ve always worked, because they need time to integrate into their teams, and that’s a process you cannot force.

Eugene Litvak 44:56
And I would say that in this case, the efficient. See of the pro of this process may not be the only downside. Another parameter would be the quality of this sort if you have a nurse who never worked with surgeon or anesthesiologist, I do not know how it would affect, I never seen the publication, so I don’t want to speculate, but I would assume that that would affect the quality of surgery as

Michael 45:22
well, if you think about it as a team sport in inverted commerce Exactly. Teams take time to form. They don’t just form immediately, exactly. And there are many things that cannot be communicated. So you observe and you try to predict what’s going to happen exactly. So that’s not something you could ever write down in a rule book, because every surgeon is going to do things differently, and teams naturally compensate for weaknesses other team members have, and you only will know they have to working with someone over a few operations.

Eugene Litvak 45:53
So again, there is a solution to that in details. There’s multiple case studies discussed in the book with the hospital CEOs, who were exhibited real leadership and did that at one hospital in Canada, they reported, in the first year, annual life saving of 40 patients per year for Zero attributed to this intervention so

Michael 46:21
it can be done. Is not easy. What’s very fascinating to me is when we talk about health care, when we talk about any sector, I speak to many executives, everyone tells me my sector, my company, is unique. But then when you start digging into the issues, it’s the same issues come there’s issues around operational management, there’s issues around financial discipline. There’s issues around understanding that a lot of the things cannot be documented because humans make human decisions, and you have to watch them, and it’s the same thing is happening in healthcare as well. I

Eugene Litvak 46:54
can tell you our approach. Yes. So this problem is exactly what you just mentioned, you want to make sure that every party is going to benefit. Surgeons benefit. And in that book, you will see their opinion internationally, from the not just us, but Canada, UK, prominent surgeons commented on their experience once this has been implemented, this interventions for smoothing, nurses are happy, as I just gave you an example, fewer of them live in the hospitals. Physicians are happy. Emergency Department patients, patients and physicians and nurses are happier because they do not have to board dozens of patients who are supposed to be admitted, but there is no bed for them because there was a peak in schedule surgery. So everybody benefits, including hospital chief operating officers, I should say

Michael 47:56
yes, Eugene, thank you so much. I thoroughly enjoyed that. I think that is one of those episodes where you come in assuming you know the layout of the land, and then you realize it’s very different from what you assumed it would be like. I want to thank you for that.

Eugene Litvak 48:13
Thank you for inviting me. It was pleasure to be here.

Michael 48:15
I’m sure we’ll be in touch again soon, because I think this episode is worth having a follow up in terms of how some of these things are done.

Eugene Litvak 48:23
Thank you.

Michael 48:24
We’ll be happy to continue take care. Eugene, have a good day. You too. Bye, bye. As we wrap up, today’s podcast is sponsored by strategy training.com if you want to strengthen your strategy skills, you can get the overall approach using well managed strategy studies as a free download. Go to firms consulting.com forward slash overall approach. And if you’re looking to advance your career and need to update your resume, you can get a McKinsey and BCG winning resume template example as a free download at www dot firmsconsulting dot com forward slash resume PDF.