Reduce supply costs with information

Clear, concise data change physician preferences

Day-surgery program costs can be divided into several neat categories: labor, overhead, equipment, and supplies. Of the four categories, the easiest in which to control or cut costs should be supplies. But how do you control surgical supply costs when your purchase decision maker is a surgeon with specific preferences that may conflict with the best value?

"Surgeons are scientists. Give them clear, concise data that captures their interest and you will see changes," says Cheryl E. Dendy, administrative director at St. John Surgery Center in St. Clair Shores, MI. Changes for her center include a one-year savings of $84,958 in the ophthalmology department alone, she adds.

A benchmarking project that compared her surgery center’s costs to similar facilities throughout the nation led to a project that profiled surgeon’s supply costs per procedure (See article on benchmarking, p. 83). "We learned from comparison to other facilities that our supply costs were the highest in relation to similar facilities," says Dendy.

Dendy and her staff reviewed the benchmarking reports that described specific activities the other facilities undertook to achieve top-performer status. This report included detailed information such as how many drapes are used in a particular procedure and what drugs are used. Staff members from Dendy’s facility also made site visits to a facility identified in the benchmarking study as a best performer to learn about protocols and practices that would help them improve.

One of the most important new tools to address supply costs was physician profiling, says Dendy. "We learned to profile each surgeon’s supply cost by procedure in order to present recommendations for change," she says.

After gathering information by using the operating room’s pick list and prices from the purchasing department, the staff produced a report that outlined each physician’s supply cost by procedure. "We began with our ophthalmology staff because they represent a significant number of procedures and could result in significant savings," explains Dendy. Reports given to all ophthalmologists at a department meeting masked identities by charting costs per case to surgeon A or surgeon B. Each physician, however, received a packet that compared his or her particular costs with the individual costs of the other surgeons. Dendy also included information on the average reimbursement for each procedure.

"We presented the data and the first reaction was surprise," says Dendy. "Most physicians said that they had no idea that supplies represented the amount they did and the physicians were very surprised to see the reimbursement level," she adds.

While Dendy was careful to mask the surgeons’ identities, she points out that by the end of the meeting each physician was volunteering his or her identity. "It became a very productive meeting during which physicians began to discuss the merits and benefits of certain brand items. This initial presentation led to other meetings during which the ophthalmologists standardized their supplies and chose lower-cost supplies if everyone agreed that the item offered equal or better patient care than other items, she adds.

Physician leadership key

Education is important, but having a physician who is willing to champion your cause is the key to success, says John Sparks, RN, CNOR, manager of surgical services for Good Samaritan Hospital in Corvallis, OR.

After presenting information to different specialty departments for inpatient and outpatient cases, Sparks found the most motivated groups were physicians whose compensation was tied to costs per case. "If the clinic changed compensation programs and did not tie the physician’s earning to savings, the physician lost interest in standardizing supplies or cutting costs," Sparks says.

There have been several departments, such as urology, that responded with enthusiasm because of individual physicians who see cost savings as beneficial to everyone, Sparks adds. "These physicians are ready to talk with each other, and to evaluate differences in supplies and practices to find the best way to proceed. In fact, our average savings per urology case during the past year is $125," he points out.

Both Dendy and Sparks offer the following suggestions to day-surgery program managers who are considering a physician profiling program:

Keep the initial reports anonymous.

The most important thing is to avoid pointing fingers or putting someone on the defensive, says Sparks. Anonymity gives physicians a chance to absorb the data before discussing specific practices.

Present clear, concise, documentable data in a summary format.

Physicians want to see the information in a format that can be easily read and understood. This gives them a chance to absorb the information and move on to the steps needed for change, says Dendy.

Offer recommendations.

Suggest some changes that will not greatly affect any one surgeon but will initiate discussion, says Sparks. "If you can focus the discussion on one procedure or one item, you make it easier for the group to reach a consensus," he explains. After one decision is made, it is easier to move on to other areas, he adds.

Start with an issue the physicians have the most control over, such as supplies, says Dendy. Once physicians have reduced costs by implementing changes such as standardizing pick lists, using different drugs, or reducing the number of drapes, you can introduce length of procedure as another cost aspect to evaluate, she says. After physicians are comfortable with changes in the supplies they use, you can ask them to evaluate their practice, she explains. In fact, her ophthalmologists have reduced time in the OR by as much as 15 minutes, after evaluating each other’s practices and making changes in their own processes.

Although Sparks’ cost-per-case reports do indicate overhead costs, he doesn’t present it to physicians because it just frustrates them. "You want the surgeons to be able to implement changes that do affect costs so be sure to choose something like supplies or OR time over which they have control."