We think our hospital has come up with a solution to the challenge facing most every OR: How to align the incentives of surgeons and anesthesiologists who are paid by the case with those of staff who are paid by the hour. We've found you can do just that by

• creating special incentives for your surgical services team in such areas as turnover time, first-case starts and supply costs, and
• motivating your doctors to be agents of change and to help with the cause.

Nothing we wouldn't try
The surgical services department here at St. Joseph's Hospital in Orange, Calif., is the fourth busiest in the state. In 26 rooms, we perform more than 24,000 cases per year. Over the years, we've tried all the usual things to improve the performance of our surgical teams. We created a turnover team and made up games to educate staff on the cost of supplies. We formed our share of committees and hired our share of consultants. And yet we could never sustain whatever progress we made.

Finally, it dawned on us: To truly succeed over the long term, we needed everybody - doctors (more on them later) and staff - rowing in the same direction. We needed the support of the entire surgical team. We proposed to our OR committee that we establish a surgical services staff incentive program that included nurses, OR techs, support staff, sterile processing, pre-op and PACU. Everyone would receive the same bonus, regardless of job classification.

The program's objective was to reduce three of our biggest drags on efficiency: supply costs, turnover times and delayed first-case starts. Twice a year, we review our performance in each of these categories and award each member of the surgical team a bonus based on what percentage of our target they hit:

• $87.50 for 50 percent;
• $135.25 for 75 percent; and
• $175 for 100 percent.

For hitting 100 percent of the supply cost, turnover time and on-time start goals, each member of the surgical team receives $525 ($175 x 3), the maximum payout possible, every six months. We all agreed this was a meaningful incentive.

Money well spent
After the first six months, we paid out $81,203 in incentive bonuses to 270 employees (an average of $301 per employee). Consider these results:

• Supply costs. We decreased our supply cost per minute (divide supply costs by OR minutes) in the outpatient OR from $2.92 to $2.86.
• On-time starts. On-time outpatient starts improved from 67 percent to 73 percent; on-time inpatient starts went from 71 percent to 84 percent.
• Turnover times. We lowered our outpatient and inpatient turnover times in the first six months, but they remained the same the second six months. Deciding that the initial target was too aggressive, we changed the incentive target for turnover time on the outpatient side from 11 minutes to 12.5 minutes in the second six months.
• Attitude adjustment. Anesthesiologists and surgeons made significant efforts to change their behavior. This was the most interesting byproduct of the pilot program. Before we started the incentive program, surgeons came late to cases because they figured the anesthesiologists would be late. Anesthesiologists, meanwhile, didn't show up on time because they figured the surgeons would be late. It was a vicious cycle.

When the incentive plan kicked off, the culture in the ORs began to change. With the promise of monetary bonuses, nurses put peer pressure on the surgeons and anesthesiologists to start cases on time. The medical director also tracked tardy physicians and had discussions with offenders after three late starts. It was amazing to see everyone - from techs to surgeons - improve their performances because of standards set by colleagues.

Self-funding
Our incentive program is now in its second year. We've retained supply costs as an incentive and added preference card accuracy as a new goal. This enables the program to be self-funding; the money we save on supplies will help us pay for the bonuses we pay the surgical teams. We're also monitoring to make sure our staff maintains the improvements we've gained on turnover times and first case on-time starts.