Wouldn't it Be Nice? The True Cost per Case of Instrument Processing and What it Means for You

The two words that daily ring in the ears of  every CS/SPD leader in the country: "Cost Center."

As valuable of a service as our Sterile Processing teams provide to the surgical suite and the rest of the hospital, at the end of the day and the end of the ledger, we are still represented by a giant minus (-) sign. 

That is one reason (among many) that cost-saving initiatives in the CS/SPD world are so critical for department success. A leader who can pinch a penny without compromising patient safety or service quality will go far, and that right quickly. The budget is a clear baseline and the story of improvement through cost-savings is easy to tell.

But just as important as cost-savings is to the success of a department, there is something to be said for data management as well. And not just any data - the kind of data that can help the surgical services team make informed decisions that can drive financial efficiencies throughout the entire periOperative service. We can call this kind of information cost-data. Although there are many areas of the SPD process that could benefit from this kind of cost-data, one of the biggest opportunities for most departments is knowing their cost per unique procedure for instrument reprocessing. 

It's Not What You Think, It's Not That Easy

I know, I know. You're sitting there thinking, "Well, I've already got that data. I just need to take my annual spend and divide it by annual surgical volume and voila! -- cost per procedure for instrument reprocessing." Done and done. 

Well just hold your horses there, John Wayne. You did just calculate something, but it wasn't quite what we're talking about and not near as helpful. A simple Spend/Volume formula only tells you what it costs you to staff, supply, and process the diverse case mix you happened to have that calendar year. Every type of case, every type of tray, every surgeon, every SPD shift all mixed into one pot. Is that worth knowing? Sure. Is it actually that helpful? Eh, not so much. 

Mine Those Surgical Instrument Data Gems

But let me tell you what is worth knowing and what will give you the financial keys to the proverbial Sterile Processing kingdom -- true cost per unique procedure for instrument reprocessing. As I alluded to above, the mass of annual budgetary data you have at the end of the year has to be spliced up and linked to particular trays, cases, and surgeons to really sing a song your VP and CFO will want to listen to. So let me explain how you would gather this data and then what you could do with it. 

How To Do It

As with the previous Wouldn't It Be Nice?  posts in this series (1 and 2), this data gathering comes down to a smarter asset management / instrument tracking system for Sterile Processing departments. Some tracking systems do allow you to input cost per instrument into the instrument database section of their software (thus telling you how much it would cost to replace a certain tray, say a Major Vascular set). But what none of them currently provide is a means to gather instrument-specific processing supply & labor costs for each of your unique trays -- and to do so in a real-time fashion.

Once we have a software that is meaty enough to allow you to input your static costs per tray (i.e. - disposable lumen brush, integrators, instrument wrap, soaker sheet, sterilization tape, and labels), then the real-time labor hour tracking kicks in to tell you how many labor hours it takes your team to process that Major Vascular set in particular, not just "a" tray in general. Typical Spend/Volume numbers just tell you how much it costs you to have an atmosphere where a year's worth of processing went on. The kind of cost-data I'm pitching would tell a much clearer story about what it costs your team to support 23 of Dr. Smith's ORIF procedures, with 4 sets, 2 peel packs, and 3 loaner sets each. 

So What? Why Does This Matter?

What could you do with that kind of information? Well, for starters, you would have an entire department worth of budget forecasting data at your fingertips. Have a new orthopedic surgeon coming on board? If he's planning on doing 3 procedures a week, you just happen to have some fine numbers to give to your CFO for the percentage increase in costs that are about to hit your budget. Are you going into trauma season? Now you'll have an idea of what to expect for that particular change in case mix.

On top of that, you'll have a data goldmine of instrument optimization opportunity just waiting for someone to come along with a pickaxe and a spreadsheet to make some magic happen. Once you're able to bring comparative cost-data to bear on different physicians who are performing the same procedures with dramatically different costs per case, the stage is set for the kinds of instrument/set optimization conversations that every CS/SPD leader dreams of. Does Dr. Puckett's Ortho Instrument tray really need 120 instruments or could we standardize it with the regular Ortho set that only has 75? With real data, you're more likely to walk away from these questions with real results.

And finally, because our departments are characterized as cost-centers, this kind of data would open up a whole new world of budget baselines to show how freaking awesome you are at saving your facility money. Do you want to purchase a new sternal retractor that takes half as long to wash, inspect, and assemble? Now you can click a button and show your purchasing department why it is a slam dunk for your budget. Did you sub out a single peel pack for an instrument tray on all of Dr. Lobe's CV cases? You'd now be able to send a friendly email to him and your boss talking about why that decision is going to save the organization $500 over the next two years. 

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At the end of the day, your Sterile Processing department may always be a cost center -- but there's no reason that it can't also be the epicenter of smart data management for your facility. This is just one idea that could push our teams into the next generation of processing excellence.

What say you?

W. Hank Balch ? May 2016

This article is the sole opinion of the author and in no way reflects the position of any employer or facility.

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Additional reading:

Oregon hospitals will give consumers quick estimates on procedure costs