Cost containment in the OR is a struggle for many organizations. It requires the combined efforts of executive leadership, supply chain, and clinical staff to identify opportunities for savings through standardization and cost-conscious procurement. But before any steps can be taken to meet these ends, organizations need a clear understanding of what they’re spending on which items and for which procedures.
In a survey conducted by Okike et al., published in 2014 in Health Affairs, 503 physicians across seven academic medical centers were asked to estimate the cost of 13 commonly used orthopedic devices. It was found that attending physicians were only able to correctly estimate the price of devices 21% of the time, demonstrating the need for greater cost awareness.
Bethany Daily, Senior Administrative Director of Perioperative Services at Massachusetts General Hospital, says that physicians are not entirely to blame for the problem; they simply do not have the mechanisms to access that information.
In order to better inform physicians and executive leadership on costs associated with surgical procedures, Mass General established the OR Cost Awareness (ORCA) initiative, which has three primary functions:
- Raise awareness of supply spend levels and major cost contributors
- Use data to identify cost savings opportunities
- Enable discussion about product and preference card standardization
Daily says that in order for ORCA to have an impact, it needs to be informed by accurate and actionable data.
ORCA’s data gathering strategy is multifold. The first line of defense is the physician preference card, since it dictates which devices are being picked and shipped to the OR. Each procedure has a base card, and many cases require no deviation. However, there are always exceptions, such as multispecialty cases, which are given a “high-touch review,” Daily says.
After the preference cards have been established, nurses track items using a combination of radio-frequency identification (RFID) technology and manual counts. The RFID system stores all of the information regarding the details of the case and which devices are dispensed to the patient, sends it to the electronic health record, and reconciles any unused devices that are returned post-procedure. Nurses review nonRFID tagged items in the case kit, such as screws and pins, and record what was used and what was left unused.
Once the data has been aggregated and analyzed, the members of ORCA discuss its potential applications.
“We don’t try to mandate specific changes,” Daily says. “We let the data and the variation that might be discovered in the data lead us to useful changes.”
ORCA has successfully leveraged the data to standardize and find alternative items with similar efficacy at lower price points. For example, it was discovered that in the laparoscopic service line different physicians were using different devices with different prices. This is not uncommon, but the discovery led to a successful product standardization to a more cost-effective device.
With similar outcomes in other service lines, per case cost at Mass General has dropped by $230 over a period of nine months. For a hospital that sees 37,000 cases performed per year, this is an outstanding savings.
What is your organization doing to promote cost awareness in the OR? Taking the time to gather data on a per case basis can be the first step toward greater transparency and more effective cost control.