Several steps are necessary to enable this approach to assigning labor costs. Use the checklist below as an outline of these steps, and to determine the organization’s readiness for using this approach.

Checklist: Labor Costing

1. Confirm the availability of staff times by labor category, by case. (Surgery/I.S.)
   
2. Identify the labor categories defined in the O.R. system. (Surgery)
   
3. Determine the charge code scheme to be used. One charge code would be set up for each labor category. (Finance/Patient Accounting)
   
4. Develop and test the interface of items from O.R. system into billing or DSS. (Cost Accountant/I.S.)
   
5. Calculate average rates for each labor category and load into cost accounting system. (Cost Accountant)
   

Supply Costs

The ideal approach for assigning costs of surgical supplies to the patient level is one in which actual supply usage, by item, is interfaced from the O.R. system into billing or into the Cost Accounting/Decision Support system. A well-implemented O.R. system will track all supply items used, so this usage data will include both chargeable supplies as well as non-chargeable supplies. The source of this information is the preference card within the O.R. system edited to reflect the actual supplies used for each patient. In other words, two steps are necessary to collect this data: a). Preference cards must be implemented for all case-types, and b). An O.R. staff member tracks the actual supplies used on the case, including any times used in addition to those on the preference card, as well as deletions of items on the preference card but not actually used. Below is an example of a patient’s record:

Use the checklist below as an outline of the steps necessary to accomplish accurate costing of supplies using O.R. system data.

1. Checklist: Supply Costing
   Clean up the Item File as necessary, to ensure that all items ordered by Surgery are in the Materials Management system, with an accurate cost per unit. (Surgery/Purchasing)
   
2. As necessary, revise the preference cards in the O.R. system, in order to minimize the number of exceptions to be documented for each case. (Surgery)
   
3. Accurately document the supplies used on each case, by adding or deleting items on the preference list. The tighter the preference list, the easier the task is for the O.R. staff. (Surgery)
   
4. Add charge codes to billing as necessary, for non-chargeable supplies as well as for additional chargeable items. (Patient Accounting)
   
5. Develop the interface from the O.R. system into either the billing system or DSS. (Cost Accounting/I.S.)
   
6. Interface supply cost by item (i.e. the item file itself from the Materials Management system into DSS/cost accounting. (Cost Accounting/I.S.)
   

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