From Every Angle: Capacity

By Erin Cristales, Kayla Green and Randena Hulstrand, Vizient

As the demand for emergency care and hospital beds — along with an aging population with more complex comorbidities — continues to increase, healthcare systems face what seem like insurmountable challenges.

Now more than ever, healthcare leaders are forced to think outside of the box to solve for these capacity challenges. That means boosting access for different levels of care, optimizing pharmacy services and construction of new spaces, and ensuring effective management of supplies and equipment.

A recent Vizient report, Overcoming capacity constraints: Top healthcare leaders share their strategies, highlights different approaches healthcare systems have implemented to help lessen the burden of capacity.

Here are a few more perspectives from our Vizient experts.

Create more access points to care.

Mike Strilesky, Senior Principal, Sg2 Consulting

Why it matters: Academic medical centers (AMCs) are especially suffering from capacity constraints since they are often the clinical safety net for their communities. Adding to that, the ability for leaders to create more space is limited by workforce constraints and access to capital or on-campus space to expand capacity.

There are no easy answers, says Mike Strilesky, senior principal, consulting at Sg2, a Vizient company. But leaders who are focused on improving hospital capacity by redirecting lower-acuity patient care back into a community setting can realize more appropriate, cost effective and scalable care delivery models for their health system.

“Capacity is all about creating different access points to prevent unnecessary or lower-acuity admissions to a constrained AMC,” he said. “It could be utilizing virtual capabilities more effectively or redesigning clinics to prioritize higher-acuity patients with care teams that can help manage the coordination of care to avoid emergency department visits and non-emergency admissions.”

Because of the local market conditions, organizations will face unique sets of issues around capacity. It’s up to each health system to determine how many new access points can be funded and staffed and to prioritize where community partnerships may be necessary to create capacity in the near-term.

Strategies to consider:

• Assess breadth and depth of services. Take stock of the services you have and the level of patient acuity you can accept by service line. Determine what gaps in services you need to close or where you have underutilized capacity. Think about where your current challenges are across your market and determine if or where you have “relief valves” such as re-locating a program to a new ambulatory campus or community hospital, expanding clinical capabilities in the community or centralizing services in one location to create additional efficiencies with the existing capacity.
• Consider patient acuity. While disparities in acuity levels, capabilities and scope of service make patient load leveling challenging for systems, start by determining where the ideal location is for your highest-acuity patients. For example, while AMCs are at capacity, often community hospitals are sub-optimized. Look for opportunities to shift lower-acuity care to community hospitals and centralize tertiary and quaternary care to the AMCs.
• Look at the competition and market opportunities. Think about where your footprint requires you to (at least) match your competitors’ services but also decide where it makes sense to cede to their strengths. On the flipside, investigate what markets are the greatest opportunities while calibrating to volume thresholds needed to drive high performance and quality care. 
• Review quality and safety metrics. Assess the current state of your quality performance (length of stay, mortality, readmissions, etc.) and then find opportunities for operational improvement before facility expansion opportunities are pursued.
• Grow sites of care and access. Look for opportunities to increase your ambulatory and/or post-acute infrastructure such as skilled nursing and care at home, which can improve length of stay and patient throughput. Also map out what your future footprint will look like in relation to forecasted growth, to determine if a new hospital presence is necessary or whether ambulatory expansion can drive downstream acute care market capture.
• Ensure organization and physician alignment. As you implement new care models to address capacity and access across clinic sites, new compensation models and incentives for support physicians and providers are necessary. Medical group organizational structures that consider academic and community models will be needed to ensure there is ample physician coverage to care for patients.

Design a more effective ambulatory strategy.

Chad Giese, Principal, Sg2 Intelligence

Why it matters: Keeping pace with capacity issues requires organizations to use their resources in the most effective way across the entire care continuum, paying close attention to their ambulatory strategy.

Capacity management is often focused on hospital protocols and throughput, but the ambulatory space may be the place to start when optimizing inpatient resources. 

“Leaders need to be thoughtful in their ambulatory strategy. The bigger your ambulatory footprint, the more patients who will be referred for a procedure or care, which can really benefit high-acuity programs.” said Chad Giese, principal at Sg2, who is an expert on service line strategies and a contributor to the annual Impact of Change® forecast. “But the reverse also is true: The more providers who can manage low-acuity patients effectively in the ambulatory space, the more they mitigate the use of high-acuity resources and capacity. Building out an effective ambulatory strategy is a must-have for providers.”

For example, there are varying projections of some service lines having high demand driven by an aging population that's pushing growth on the inpatient side, such as complexities with cardiovascular disease and stroke patients. Other service lines, such as cancer and orthopedics, are experiencing an outpatient shift as more treatments can be provided outside the hospital due to new technologies and pharmaceutical advances.

“How does your ambulatory footprint either mitigate downstream inpatient admissions or create the funnel to an inpatient or hospital-based treatment or service?” he said. “Ambulatory access is part growth, part mitigation and part capacity management — there are pushes and pulls that will be unique to service lines, clinical programs and market needs.”

Strategies to consider:

• Leverage data and analytics: We're using Vizient’s Clinical Data Base to help providers identify procedures where there are clear volume and quality relationships — meaning the more they do, the better the outcomes for the patient and operational efficiencies for the provider. This helps create a proactive approach to managing not just what is delivered but where those services are delivered, and makes it possible for health systems with multiple hospitals to better optimize these services. This volume quality analysis helps to determine the best location across a system to provide certain services for certain types of patients and ascertain where services need to consolidate and where they can be distributed across a system. Analytics often take the emotion or politics out of some of the decisions leaders must make to best maximize assets across their system.
• Create alternatives to the emergency department: In the annual Impact of Change® forecast, we saw emergency department utilization tick up 4% between 2022 and 2023 while also seeing the percentage of emergency visits that convert to inpatient stays remain the same — meaning inpatient discharges have also increased. The emergency department is an expensive front door for our health systems, so the goal is to see volumes drop and patients coordinated more effectively outside the hospital. Patients normally come to the hospital because that's the way they've always been triaged or treated, but healthcare leaders need to assess if that’s really the right place for their care.
• Address length of stay and discharges: Reducing unnecessary emergency department and inpatient utilization alone will not be enough to combat capacity issues. The discharge forecast from 2024 over the next 10 years will rise by 3% largely driven by an aging population with increasing complexity and comorbidities that are entering health systems. But the inpatient days forecast is projected to increase 9%, which is often hard for facilities to absorb due to current capacity constraints. Leaders should carefully look at their inpatient portfolio and consider transferring low- to medium-acuity patients to other sites of care to optimize care delivery.
• Shift to other sites of care: Utilizing other sites of care — such as other hospitals and hub-and-spoke models that better manage lower-acuity patients — is one piece of the puzzle. Leaders should incorporate a multipronged approach that includes care at home, virtual or remote patient care, appropriate use of systemwide resources and assets, and leverage the ambulatory setting to mitigate possible acute exacerbations. Yes, decrease length of stay, but also address lower-acuity care that shouldn't be in the hospital to begin with.

Lean on pharmacists' crucial role in enhancing capacity.

Jennifer Taylor, Pharmacy Executive IV

Why it matters: As we all know, pharmacists are responsible for managing the safe and effective use of medications. However, many may not know that every patient who comes to a hospital will interact in some way with the pharmacy department — which is why it’s critical to consider pharmacists when solving for capacity constraints.

“Ensuring patients get the right medication at the right place and time, and that they understand how to take that medication, helps reduce readmissions and costs and improve overall quality of care,” said Jennifer Taylor, pharmacy executive IV.

Strategies to consider:

• Adopt a ‘meds to beds’ approach. Looping a pharmacist into a patient’s transition of care plan early can help the process run smoother and safer. When clinicians work with the pharmacy team to ensure the patient’s medications are ready to go at discharge, the patient’s length of stay is shorter, they receive proper instruction on how best to take that medication, and they get the right medication at the right price, right place and right time — ultimately leading to a decrease in the likelihood of readmission.
• Add a pharmacist to pre-surgical planning. Surgeries often can be delayed or canceled due to a lack of medication reconciliation of current medications such as anticoagulants, antihypertensives, GLP-1 inhibitors and some over-the-counter and herbal supplements. Proactively adding a pharmacist to surgical planning helps ensure the medications needed for surgery are approved and held aside in time for the scheduled procedure. “If there isn’t a good pre-surgical plan in place, surgeries can be delayed or canceled because — without the medication review — the patient isn’t ready,” she said.
• Include pharmacists in outpatient care and chronic disease management. Pharmacists also can serve as physician extenders in outpatient settings, particularly for patients with diabetes, hypertension, those who take statins, those taking high-cost drugs, or those who have challenges with medication adherence. As part of the team, the pharmacist can manage and monitor those medications where quality care gaps exist, helping to enhance patient care and reduce the burden on physicians.

Ask yourself whether construction is right for you.  

Theresa Brigden, Senior Principal, Indirect Spend

Why it matters: Often, when healthcare systems run out of beds, leaders question whether to build more space. And with high-cost projects and tight margins, it’s imperative that systems be more strategic with their spatial needs. 

“It’s no surprise that many systems are faced with the dilemma — to build or not build,” said Theresa Brigden, senior principal, indirect spend.

Strategies to consider:

• Understand your community’s needs. Before embarking on any construction project, it’s crucial to understand the specific needs of the community and populations your health system serves. This includes considering factors such as demographics, healthcare needs and potential growth. For instance, an aging population may require more long-term care facilities, while a younger, growing community might need more pediatric and maternity services. “Understanding the communities and populations you’re serving should inform whether you expand, revitalize or reimagine your healthcare spacing needs,” Brigden said.
• Consider build, buy or partner options. Healthcare providers should evaluate whether to build new facilities, buy existing ones or partner with other organizations. Each option has its benefits and challenges:
  • Building new facilities allows for customization (as well as standardization of materials systemwide) but requires significant capital at a time where margins are tight.
  • Buying existing facilities can be quicker and less expensive but may require renovations, and a challenge here may be in standardizing products or materials or creating consistency across facilities.
  • Partnering with other organizations — such as sharing a warehouse or building a shared central sterile plant — can lead to additional resources and improved operational efficiencies but requires negotiation and agreement on use.
  “There are a lot of considerations providers should look at before automatically sticking a shovel in the ground,” Brigden said. “It’s a complex decision with many, many factors.”
• Focus on flexibility and adaptability. The COVID-19 pandemic required healthcare facilities to be flexible and adaptable, and now we’re seeing providers design spaces that can be easily reconfigured to meet changing needs. For example, the addition of modular walls to new construction builds or renovation projects allows for different room configurations and spaces that can quickly switch from general medical use to specialized care, such as with infection disease treatment.
• Prioritize energy efficiency and sustainability. Energy efficiency and sustainability are becoming increasingly important in healthcare construction, especially given the growing regulation around it. Implementing energy-efficient systems and using sustainable materials can reduce operational costs and environmental impact. There also are often financial incentives available for energy-efficient projects, which can help offset initial costs.

Ensure you have the right number of, and access to, supplies.

Sarah Herrmann, Director, Program Services, Novaplus Brand Management

Why it matters: Assurance — particularly when it came to prioritizing supplies on hand — was top of mind during the pandemic, but as the dust settles, many providers are going back to their historic procurement practices. With both inpatient and outpatient utilization expected to increase over the next decade, it’s essential you have the right number of, and access to, supplies that will effectively address ever-growing patient needs.

“Supply assurance is so important when thinking about capacity because you must have a consistent and reliable supply of essential medical products to take care of patients,” said Sarah Herrmann, director, program services, of Vizient’s Novaplus and Novaplus Enhanced Supply Program.

She noted that Novaplus recently implemented enhanced supply language in supplier agreements (which includes 90 days supply on hand), increased supply chain transparency, redundant manufacturing plans, two additional raw material supply sources and sharing inventory on hand. The program currently has more than a dozen enhanced supply agreements in place that cover over 135 essential medical products where provider customers are partnered with suppliers to have a designated amount of supply on hand in case of a demand event. To date, the program has guaranteed more than 650 million additional units of essential supplies.

“By prioritizing supply assurance, you can better respond to demand surges and unexpected events like the pandemic,” she added. “It’s about ensuring you have the right supplies available in the right place, at the right time — and at the right price.”

Strategies to consider:

• Diversification is key. One strategy that works particularly well is to utilize products from a secondary supplier (perhaps a diverse or domestic supplier — or both) in specific areas of the hospital. For instance, assign gowns purchased from the secondary supplier to the emergency room and intensive care unit, and use gowns from the primary supplier in all other departments. This allows for:
• Standardization in specific departments while keeping a broader array of diverse, domestic and nearshore manufacturers afloat.
• Continued access to products that have already gone through value analysis. Investing 10-20% of spend with a secondary supplier means those products have been vetted by your clinicians and supply chain professionals, allowing for faster, and worry-free, access to domestic and nearshore suppliers if a shortage arises.
• A trusted partner during crisis situations. Building a pre-established relationship with a secondary supplier means you can easily go to them with requests for volume adjustment.
• Taking baby steps in low-pressure areas. Many providers face financial and staffing challenges that make it hard to shake up their normal supply chain routine. But diversification doesn't have to be an enterprise-wide endeavor. Start with hospital departments that are more fully staffed or with non-acute or specialty locations like infusion therapy.
• Consider third-party logistics (3PL). Health systems with larger volumes can look to strategies like 3PL to help manage their PPE inventory. For providers, a direct sourcing strategy tends to require logistics expertise, dedicated resources, the development of new internal processes, and capital investments in systems, storage space and labor. Using 3PL services minimizes those needs and brings expertise in warehousing, inventory management, regulations and compliance, labor and systems. One advantage of using 3PL vendors is that they don't take title to the inventory, meaning the provider retains ownership of products. This can be important for maintaining control over the supply chain. 3PL vendors' capabilities range from moving product via air, sea or ground; storing and rotating inventory in temperature-controlled warehouses; and when providers call, transporting inventory to their facility.

Plan for the proper equipment — stat. 

Patrick Melone, Associate Principal, Medical Equipment Planning

Why it matters: In an era when clinicians are more primed than ever to expect the unexpected, hospitals are laser focused on “future proofing” their facilities. While that strategy now includes preparing for huge crisis events like another pandemic, it also entails anticipating the smaller (but undeniably exhausting) everyday issues like surges in capacity.

Medical equipment planning plays a significant role in ensuring the healthcare setting is ready for whatever comes its way. To solve for increasing inpatient and outpatient volumes, providers must incorporate flexibility and efficiency into their equipment planning approach — and experts like Patrick Melone, associate principal, medical equipment planning, are committed to helping them do exactly that.

“It’s important when faced with any kind of capacity challenge that you have the infrastructure in place to provide uninterrupted service to patients,” he said. “The biggest thing is understanding what you are planning for today, defining how far into the future you think you can effectively impact, and where you want to be at that time in the future to ensure your space and equipment will be functional for that length of time.”

Strategies to consider:

• Ensure shorter turnaround time. Equipment on rolling carts allows for greater flexibility (especially in cases where you may need to quickly increase patient care capacity in areas such as the emergency department), and ceiling-mounted equipment booms in surgical suites support operational efficiencies by reducing room turnover times in surgery departments. In addition to simply planning for the correct type and quantities of equipment, the sterile processing department must also understand and plan the staffing model to achieve reprocessing production needs. Balancing the proper mix of traditional SPD equipment, automation/robotics, instrument tracking systems, staffing and physical instrument inventory levels will ensure an efficient operation and the right instruments available at the right times to support provider and patient satisfaction.
• Make your spaces comfortable — but not too comfortable. Big-screen TVs with streaming services and beds or stretchers with plush mattresses are great, but they’re often not conducive to encouraging patient discharge. Many surgery centers, for instance, do not install televisions in recovery areas so that patients won’t want to linger in the facility for longer than necessary.
• Look for easy maintenance options. Supplies with software and hardware that can be upgraded remotely or with field upgrades that require little or no construction mean shorter offline time for equipment (and less revenue lost in the process).
• Embrace automation. It can help alleviate workforce challenges that inevitably arise with capacity constraints. Some hospitals, for example, use robotics to augment surgical procedures, dispense medications, deliver supplies and meals, and perform routine housekeeping. And while it may sound cost prohibitive, the financial impact is often neutral. Areas like surgical robotics might add expense, but that cost is typically offset by the value those technologies provide such as enhanced precision; smaller incisions; reduced hospital-acquired infections, pain and scarring; and faster patient recovery.

Read the recent report, Overcoming capacity constraints: Top healthcare leaders share their strategies, to learn more about how healthcare leaders are working to improve capacity challenges at their organizations.