Targeting Operating Room Costs and Waste

By Todd Francis, MD, PhD, and Ajit Krishnaney, MD

Implementation of the Affordable Care Act has presented physicians and hospital systems with a significant challenge — the reality that soon we will be reimbursed less for many of our services. These changes have prompted hospital systems to re-examine their operating costs and search for new ways to lower daily expenditures without impacting the quality of care.

Evaluating ways to reduce or reuse certain materials in the OR figures prominently in such efforts, and Cleveland Clinic’s Center for Spine Health has introduced a novel program we call “Check Please” that is helping lead our institution’s initiatives in this regard. This article briefly profiles the Check Please program after reviewing the factors that prompted its development.

Materials Cost in the OR: All About Scale

The OR is a natural place for surgeons to begin the quest for cost savings, and there are undoubtedly savings to be found there. Data from two decades ago suggested that roughly $200 million worth of prepared equipment in the OR was wasted annually in the United States; imagine what the cost of such waste amounts to in today’s dollars.

Most of this waste is in the form of prepackaged materials such as sponges, gowns, gloves and so forth. A large amount of this material is opened in the OR before a case, not used during the case and simply discarded afterward. While the cost of material waste for any single case is minimal, when added up over all cases in several ORs throughout the course of a year, the collective cost is significant.

Until recently, the typical surgeon had little knowledge of — or interest in — this type of surgical waste. Yet if efforts to prevent the waste of unused OR materials are properly organized and streamlined, they can potentially save hospitals millions of dollars annually.

A Surprising Study Finding About Cost and Outcomes

A frequent concern is the typically wide variation in cost for a given surgery among different surgeons in the same institution. A recent Cleveland Clinic study1 looked at 652 lumbar diskectomy procedures performed at our main campus by nine different spine surgeons over the course of 47 months. Each surgeon performed an average of 70 lumbar diskectomy procedures during that time.

Results of the analysis were striking: Not only was there a significant difference in mean surgical cost (disposable materials and implants used) among the nine surgeons, but there was a significant positive correlation between worse outcomes and higher mean surgical cost.

As surgeons, we have traditionally been led to believe that lowering operative cost by using cheaper or fewer materials would lead to worse outcomes. Yet the data from this study argue for critically revisiting that notion.

Search for Solutions Leads Beyond the Individual Surgeon

A major problem today is that surgeons are not able to readily check the cost of their individual procedures or how these costs stack up against those of their colleagues. Furthermore, there is no easy way to correlate these costs to patient outcomes, short of the surgeon pulling his or her own outcomes data and running a linear regression analysis between cost and outcome. Such data would be a powerful tool in the quest to standardize spine surgeries across the institution and keep operative costs at a minimum while maintaining good outcomes.

Fault also extends beyond the control of the individual surgeon in that surgeons’ lists of preferred items are not routinely reviewed unless a problem arises, and often multiple packs of disposable materials are opened and billed automatically for a given case with little knowledge or appreciation by the surgeon. While this may not significantly impact costs for the given case, when added up over time for several surgeons, the costs become significant.

Enter ‘Check Please’

The Check Please program was developed to increase surgeon awareness of hospital cost per case and the cost of every item used in the OR. This is information that has never been available to surgeons before.

The program allows surgeons to review the cost of any surgery they perform in near real time.

When surgeons log on to the online Check Please system, they are able to see the individual costs of all disposable items charged for during a given surgical case, as well as the total cost of the case. The system also allows surgeons to compare the cost of a particular case with similar cases managed by other surgeons throughout Cleveland Clinic. The program likewise enables comparison of the cost of OR materials (e.g., disposable items and implants) for given Current Procedural Terminology (CPT®) codes among surgeons and by location.

To date, Check Please has been implemented for spine surgeries at Cleveland Clinic’s main campus and will soon be implemented at community hospitals in the Cleveland Clinic health system. Data generated from this powerful tool can be used to correlate surgical outcomes with material costs and to measure trends in cost variability among different CPT codes.

A Quest for More Cost-Effective Choices

The goal of the Check Please program is to give surgeons information that will allow them to make more cost-effective choices in the OR and avoid opening (and triggering charges for) items that are not necessary for optimal care. By providing accurate cost data about the items that Center for Spine Health surgeons use as well as insight on how they compare with their peers, Check Please is empowering surgeons to make more cost-effective choices while maintaining high-quality care. We look forward to reporting the effects this initiative has on costs and patient outcomes in the months and years ahead.

Drs. Francis and Krishnaney are spine surgeons in Cleveland Clinic Neurological Institute’s Center for Spine Health.

References

1. Rosenbaum B, Modic M, Krishnaney A. Increased surgical costs are not correlated with improved outcomes in lumbar discectomy. Submitted for publication.