Exhibit 1
Surgery Costing Approaches
Salary
| Approach |
Example |
Advantages |
Disadvantages |
| Time/Team Category
ACTUAL |
Team A (2RN, 1 Tech) 1 min. |
- Detail by team
- Patient/MD variability |
Assumes entire team is on the case for the same duration |
By Time by Jobcode
ACTUAL
(Recommended) |
Scrub Nurse 1 min.
Tech 1 min. |
- Detail by team
- Patient/MD variability
- Specific times by position |
(None) |
By Procedure
PROSPECTIVE |
Lap Chole. |
- Address differences in teams
- Built from preference card |
Lose patient/MD variation.
Requires staff time estimates for all procedures |
Supplies
| Approach |
Example |
Advantages |
Disadvantages |
Actual supply usage
ACTUAL
(Recommended) |
catheter type XYZ |
- Accuracy
- Patient/MD variability |
Significant expansion of charge master. |
Total supply costs
by patient
ACTUAL |
Supplies: $537.40 |
- Accuracy
- Patient/MD variability |
Lose detail on specific supplies used. |
By Procedure
PROSPECTIVE |
Lap Chole. |
- Detail by type of procedure
- Built from preference card |
Lose patient/MD variation.
Moderate expansion of charge master. |
Integrating O.R. Data Into DSS
In order to use the O.R. system data for assigning patient costs, it must be brought into the cost accounting or Decision Support system. (Although many O.R. systems include cost accounting functionality, it is advisable to keep cost accounting in the organization’s Decision Support/Cost Accounting system, so that patient cost data will include all departments.) This can happen in one of two ways: the data can be interfaced directly in to the Decision Support/Cost Accounting system or into the billing system, which in turn interfaces in to the DSS. The latter approach is recommended, since this interface can often be automated (most O.R. systems have the capability of linking directly to a patient accounting system).
It is important to note that the interface of detailed O.R. data in to the billing system does not imply that the hospital will begin to charge patients at this detailed level. As new charge codes are set up in billing to capture the detail from the O.R. system, they can be set up with a price of zero. Most likely these and other statistical (i.e. zero-price) charge codes can be suppressed from the printed patient bills. In the costing process, it is important to discuss patient charging and patient costing as two separate issues. Some organization have adopted the terminology of charge codes and cost codes to the patient level.
Labor Costs
Although the O.R. system data can be used in several ways to assign labor costs to each case (see Exhibit 1), the recommended methodology, and the one that is the closest to actual costs, is one in which staff times by position or labor category are used. The advantage of this approach over a time/team approach is that it can reflect staff members moving in and out of the case (a laser tech, for example, may float in for a portion of the case). Each member on the team must clock their time in and out of the case. Although the O.R. system is capable of tracking each individual team member’s time on the case (by employee name), the detail by labor category (Scrub Nurse, Tech, etc.) is sufficient for costing purposes. Based on each staff member’s labor category, his/her time on the case is represented by the number of units on the patient bill, as in the following example (in the example a circulating nurse clocked 150 minutes on the case, and a scrub tech clocked 175 minutes):
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