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Yes, You Can Do Accurate Case Costing

OR Excellence 2017

Bassam Kadry, MD, MS, Stanford Anesthesia, Stanford, Calif.

Two questions you probably don't know the answers to:

  • How much are you (really) spending on each case?
  • How does it compare to the revenues you're earning?

You'll leave a special OR Excellence pre-conference workshop armed not only with the know-how to answer those 2 questions, but also with the secret formula to determine the cost of each minute patients spend in your facility. Pretty valuable information to bring back to your facility, right?

 

Yes, You Can Do Accurate Case Costing

A conversation with OR Excellence speaker Bassam Kadry, MD, MS, of Stanford University on the secret to case costing down to the minute.

Bassam Kadry, MD, MS, is the director of perioperative analytics at Stanford (Calif.) University School of Medicine and a case-costing wonk who knows how to collect the hard data that's needed to determine exactly how much you spend on surgical care. His proven formula involves combining operating room block allocations with process-of-care mapping to calculate not only the cost of each case you host, but the cost of each minute patients spend in your facility. Dr. Kadry recently discussed why making the effort capturing accurate expense figures is essential in this era of value-based health care.


Q: Do most facility leaders lose focus on how much care costs?

Dr. Kadry — Yes. Administrators often focus on the difficult challenges they face — changes in policy, reimbursements and compliance requirements — instead of on the obvious task of determining the exact cost of surgical care. Most want to understand how much they spend on each case, but the process is complex and challenging — especially for surgical leaders with a clinical background.


Q: Why is operating room block utilization essential to accurate case costing?

Dr. Kadry — If you don't have a good mechanism to manage operating room block allocation, it's almost meaningless to determine case expenses, no matter what you do from a cost-accounting perspective. It's in those blocks that surgeons and facility leaders determine how many procedures to perform, the staff needed to work the cases, and the supplies and equipment that will be used. When you gather the cost data for each block allocation, you'll be able to determine the cost-per-minute of the resources used. You'll also discover where to find additional value along the entire patient care pathway.


Q: What's involved in mapping out processes of care?

Dr. Kadry — So much of surgical care is multi-disciplinary. You have to meet with administrators, members of the business staff, anesthesia providers, leaders of the clinical team and physician schedulers to understand exactly how patients are referred to your facility and how each step of the perioperative process is performed, from admission to discharge. You then must determine who touches patients along the way, the equipment and supplies they use, and precisely how long each step takes.


Q: That sounds daunting. Is it?

Dr. Kadry — Yes, it takes time and effort, but outpatient surgical facilities have a slight edge in determining the details of block allocations, because the surgeries they host are often narrow in scope. You can more easily measure the entire range of the cost of care, including the many variables that can impact it. Performing the exact same procedures in a single room over time creates the very real possibility of cost accounting down to the penny. Adding multiple surgeons and procedures with many variables to the mix makes the process more difficult, but it's a worthwhile exercise. Even though understanding the way business is done provides zero value to patient care, it's essential to running a successful facility.

   

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