Armed with better cost data on implants and other supplies, surgeons cut the median direct costs per case by 6.54 percent.
Operating room (OR) costs typically account for 40-50 percent of hospitalization costs for surgical patients, in part because of the high cost of implants and other supplies, says Corinna Zygourakis, MD, neurosurgery chief resident in the Department of Neurological Surgery at the University of California, San Francisco (UCSF). Yet many surgeons lack a basic understanding of how their supply selections affect the cost of care.
“As a junior resident, I was shocked that the attending physicians were largely unaware of how much supplies cost,” Zygourakis says. She had a simple idea: to develop a tool that would help surgeons become more aware of surgical supply costs, such as implants, sutures, and hemostatic agents that control bleeding. So Zygourakis and her colleagues developed a monthly scorecard that shows a surgeon’s median surgical supply direct cost for each procedure type.
“The idea was not to force surgeons to change, but to give them the price information to see how they might change their behavior with that knowledge,” Zygourakis says.
See related web extra: Using Scorecards to Help Surgeons Understand Supply Costs
Initially, Zygourakis and the project team considered developing a scorecard that would rank physicians in order by supply spend. “We decided we weren’t quite ready for that,” she says. Ultimately, they chose to develop monthly scorecards that would show physicians their median supply costs and compare that with their baseline and the average of all UCSF surgeons doing the same procedure.
The scorecard also detailed the 10 most expensive supplies by unit cost and the top 10 most frequently used items. In addition, it included a list of “bang for your buck” items, which were frequently used expensive supplies, that represented the greatest potential cost savings. “If surgeons really wanted to reduce their costs, they could substitute these items with less expensive supplies,” she says.
The scorecards were distributed each month to all 63 attending surgeons in the orthopedic surgery, otolaryngology-head and neck surgery, and neurological surgery departments. These departments were selected because they had surgeon champions to help create buy-in for the project. Other surgical departments, including general surgery, vascular surgery, and cardiothoracic surgery, served as the control groups.
Big Savings from Implants
The results of UCSF’s initiative were recently published in JAMA Surgery. After one year, the departments that received monthly cost scorecards cut their median surgical supply costs by 6.54 percent, saving more than $836,000 overall in surgical supplies. In the control group, costs increased 7.42 percent, boosting spending by more than $3 million. After adjusting for specific surgeons, departments, and patient factors, the scorecard group saved nearly 10 percent in OR supply costs compared with the control group.
The biggest cost savings came from switching surgical implants, such as screws, rods, and cages, in neurosurgery and orthopedic procedures. “If a hospital is intent on decreasing their costs, they can decrease the variability in the cost of those items,” Zygourakis says.
Surgeons also found significant cost savings by selecting less expensive hemostatic agents used to control bleeding and more affordable “glues” to stop spinal fluid leaks.
According to Zygourakis, standardization was not a goal of the project. “Surgeons like to make their own decisions, so we wanted to provide them with the cost information and see what they would do before we enforced rules, such as restricting them to use only a few implant manufacturers,” Zygourakis says. She concedes that while standardization efforts can be effective at many hospitals, they may not be appropriate for every organization.
“Our culture at UCSF is to be on the leading edge, and surgeons will often try new implants, which means we have a lot of vendors in our system,” she says. “There’s a lot of choice, and surgeons don’t like to be mandated to go from a lot of choice to little choice. We wanted to see what they would do on their own.”
UCSF also offered a small financial incentive—$50,000—to each department for academic or research projects if surgeons cut their median supply costs by more than 5 percent after one year. Two of the intervention departments and one of the control departments earned this bonus, yet its effect on incenting behavior change was likely minimal, Zygourakis says.
Zygourakis offers the following advice for organizations that want to lead similar efforts to UCSF’s to control their OR supply costs.
Take the organizational culture into account. Culture can make or break the success of these types of projects. “At UCSF, it was important that this initiative be led by the surgeons and not by the administration,” Zygourakis says.
Make your intent clear to surgeons. “We recognize that there are a lot of factors that drive what a surgeon needs in the OR—how they were trained, what they are comfortable with, the scientific literature, and their specific patients,” Zygourakis says. “Cost is also a factor, but it was never really considered part of the equation up until now. Our goal was not to make cost the main focus, but rather to give surgeons more information so they could be more cost conscious.”
Appoint a physician champion in each department to promote broader adoption. Zygourakis served as the physician champion for neurosurgery, while two of her colleagues took the roles in orthopedic surgery and otolaryngology. Each physician champion discussed the project at faculty meetings to create surgeon buy-in and make the initiative more of a grassroots effort.
Ensure the data are credible with surgeons. At the beginning of the project, Zygourakis and other project leaders had to fix some bugs with the data. One particular challenge was addressing the heterogeneity of surgical cases. For example, brain tumor resections can range from two to 14 hours, requiring vastly different amounts of supplies. The same is true with spinal fusion surgeries.
“That heterogeneity is also a problem on the national level as we try to compare physician costs as well as outcomes,” she says. “It’s very hard to account for those differences just using coding data, which presents a challenge if you are trying to compare apples to apples. That is where you lose a lot of surgeon buy-in because they can say their patients are different.” Risk-adjusting for the type of surgery and patient can help overcome this concern, she says.
Measure costs and quality at the same time to ensure there are no negative effects on patient care. Zygourakis and colleagues tracked patient outcomes and found no major differences in 30-day readmission rates between the departments that received the cost scorecards and those that did not. Mortality actually improved in the scorecard group.
A Lasting Impact
Designing a cost savings intervention that recognized physician autonomy helped create greater cost consciousness among surgeons at UCSF. A post-intervention survey found that surgeons who received scorecards reported greater cost awareness, compared with those who did not receive them.
Today, the scorecard’s impact continues to affect how physicians consider costs in their overall patient care strategies. At grand rounds, for example, neurosurgeons might discuss the cost differences of various shunts used for patients with hydrocephalus. “It’s clear that our surgeons are thinking about costs in ways they have not before,” she says.
Interviewed for this article:
Corinna Zygourakis, MD, is neurosurgery chief resident in the Department of Neurological Surgery, University of California, San Francisco.