Standardization Decreases Surgical Supply Costs by 69 Percent

ANALYZING SURGICAL SUPPLY COSTS

Operating room (OR) costs account for 40 percent of hospital costs, and while surgeons have control over disposable supply costs, they frequently lack insight into how their supply decisions impact costs. This leads to supply costs that often vary between surgeons but can’t be explained, depending on case volume, surgery length, or surgeon practice experience.¹

COMPARING COST VERSUS CLINICAL OUTCOMES

CHOC believed it had excessive variation in supply costs for appendectomies—its most commonly performed procedure. CHOC suspected the increased costs weren’t producing higher-quality outcomes, but it couldn’t be confident since it didn’t have a good way to correlate actual cost data with clinical outcomes. Because the organization’s cost and clinical systems didn’t “talk” to each other, it impeded improvement efforts. CHOC needed a solution that would allow it to assess and understand drivers of variation and identify opportunities for improvement.

INTEGRATING COST AND CLINICAL DATA

CHOC established an improvement project to make laparoscopic appendectomies safer and more cost-effective. The organization leveraged the Health Catalyst® data platform and a robust suite of analytics applications to integrate cost and clinical data, gaining new insight into the actionable, high-quality data and analytics required for improvement.

The organization identified the highest-cost supply items, comparing the clinical outcomes for patients who received care with high-priced items to those who received care using lower-priced items. There were no meaningful differences in outcomes, increasing confidence that surgeons could move to lower-priced supplies without negatively impacting patient care or outcomes.

CHOC surgeons standardized their surgical supplies and preference cards, adopting lower-priced supplies. It now uses an analytics application to visualize patient outcomes over time, paying particular attention to the impact of supply changes on operative time and complication rates. After implementing the lower-priced supplies, the organization’s cost data didn’t immediately demonstrate a reduction.

Leaders dug into the data, identifying an opportunity to improve documentation and charge capture processes. The organization audited OR charge processes, identifying gaps in the processes, including outdated and missing charges that often resulted in inaccurate charges and underpayment. The organization then redesigned OR documentation processes to ensure that charges accurately reflect supply utilization for each case.

RESULTS

CHOC’s data-informed supply standardization effectively reduced surgical supply costs while maintaining high-quality patient outcomes. Results include:

• 69 percent relative reduction in supply costs for laparoscopic appendectomy in just a few months, avoiding more than $400K in unnecessary costs annually.
  • The reduction in surgical supply costs didn’t result in increased surgical case length, and patients didn’t experience any surgical complications or unnecessary admissions to the hospital.
• In addition to the confirmed reduction in surgical supply costs, the supply standardization efforts are generating additional savings by improving OR efficiency and decreasing labor costs.

“The Health Catalyst data platform allowed us to obtain the actual cost data correlated to clinical data in real-time. Without high-quality data and analytics, we wouldn’t have been able to effectively reduce costs and improve charge capture.”

David Gibbs, MD, Medical Director Trauma and Pediatric Surgery, Children’s Hospital of Orange County

WHAT’S NEXT

CHOC plans to roll out this data-informed improvement methodology to more commonly performed procedures. The organization plans to partner with additional surgical medical staff, connecting them to their cost and resource data in a productive and meaningful way, improving the value of the care for the patients they serve.

REFERENCES

1. Acker, S. N., et al. (2022). Variation in cost of disposable operating room supplies at a children’s hospital. J Pediatr Surg. 58(3), 518-523. Retrieved from https://pubmed.ncbi.nlm.nih.gov/35973858/

ADDITIONAL READING

• Analytics Driven Improvement Efforts Reduces Surgical Supply Costs by $3.2M
• Improving Data Integrity Leads to Lower Supplies Costs
• Operating Room Excellence: How One Hospital System is Driving Improvements with the Use of Advanced Analytics
• How to Improve Appendectomy Care Outcomes Using Advanced Analytics in Healthcare
• How Healthcare Cost-Per-Case Improvements Deliver Big Bottom-Line Savings