Resource Considerations

In order to maintain the system after implementation, staffing resources must be carefully considered. This is a critical decision that must be made up-front, prior to the implementation of an O.R. system. Maintaining the system will require at least one full-time, dedicated position. One point to emphasize when requesting an FTE is the fact that there will be labor savings resulting from the automation of the patient charging process. With full implementation of the system comes the ability to do away with hand-written charge forms. In addition to automating the patient charging process, the system will greatly reduce lost charges and the number of clerical errors. While these savings may be difficult to quantify, they are real significant. Additional savings will come from improved inventory control provided by the system, along with the cost data it provides. These benefits can easily outweigh the costs of the necessary incremental staffing. Further labor efficiencies come from the improvement in staff and room utilization made possible by the computerization of case and block scheduling in the O.R. These benefits should be discussed with senior management prior to implementation so that buy-in is achieved, and the necessary resources obtained.

Uses of Cost Accounting Information

Using the approach described above, the O.R. system can provide accurate and meaningful cost information for use both by the Surgery department and by the organization as a whole. The external uses (outside the O.R.) come through the organization’s Decision Support system, which combines demographic data with clinical and financial information at the patient and product line level.

Within the Surgery department, this information is an integral part of the physician education process, by enabling utilization reporting and identification of cost variances. Likewise, this data supports the education of the Surgery nursing and technical staff. Accurate O.R. costing data will also allow the department to benchmark their costs against costs of other physicians and other organizations on a procedure basis. Critical pathway development is also supported by the cost as well as utilization data provided by such a system.

Outside of the Surgery department, there are numerous uses of this information that benefit the organization. Accurate patient cost information is, of course, critical for managed care evaluation and monitoring. Any analysis of costs and profitability by product line requires accurate cost data we well. Without an accurate costing approach for the O.R., the breakout of costs among the surgical product lines represents nothing more than a best guess. Accurate cost data is key to the planning process, and supports the business decisions made by the organization.

In the scenario described at the outset of this article, accurate cost data enabled the hospital to identify the contribution margin provided by the group of orthopedic surgeons (see Exhibit 2). Although this particular group of surgeons make up 21% of orthopedic surgery cases, their cases make up 30% of the contribution margin. It is in the best interest of the organization to prevent their departure, or to bring in other orthopedic surgeons to offset the loss.

Exhibit 2
Orthopedic Surgeons

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