Are You Neglecting the Operating Room?


When it comes to getting a clear picture of your costs, are you neglecting the operating room?

The OR accounts for up to 70% of a hospital’s revenue, between 55% and 65% of its margin, and 50% of a hospital’s costs.

It goes without saying that it’s vital to look at trends in the operating room for improving financial performance.

1. Let’s start with standardization.

Organizations can achieve substantial savings when they limit the number of vendors for functionally and/or clinically equivalent products and implement a system that encourages compliance to establish contracts.

2. OR utilization or value-based selection.

The goal of value-based selection is to meet the needs and expectations of all stakeholders. That includes patients, doctors, hospital executives and, that too, at the lowest possible cost.

Here’s an example:

You’ll see a wide variation in mesh costs, specifically, anywhere from $4,000 to $32,000 or more. You’ll have to decide the right time for which mesh would be appropriate and patient specific. But, that is a $28,000 variation in cost, so by looking at your goals and sitting down with your physicians and your clinicians, you’ll understand when it is appropriate to use that $4,000 mesh and when it’s appropriate to use the $32,000 option.

The “one-size-fits-all” approach could be doing you an injustice! Click To Tweet

3. Cost-per-procedure.

It’s absolutely essential to truly understand what you’re being paid by procedures and understand what the costs are, as well as where the opportunities exist to reduce costs while still maintaining or exceeding patient care.

It’s also important to keep a pulse on owned versus consigned inventory. ORs usually have a tremendous amount of inventory and they’re often mixed between the two. And, when a hospital loses track of this, it can understandably lead to discrepancies or confusion around costs. 

Here’s a final point you can apply very quickly. Research shows that when pricing labels are put on products in the OR, individuals are more price conscious. Consider placing this into immediate effect, and measure the difference this simple practice can make.

There are numerous other angles to consider when it comes to operating rooms.

What’s another important element to look at? Share your thoughts in the comments.

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