How you can reduce your anesthesia costs
April 1, 2000 4 minutes read
How you can reduce your anesthesia costs
By Stephen W. Earnhart
President and CEO
Earnhart & Associates
Dallas
It’s not often that we associate anesthesia with cost containment or cost control. When it comes to the supplies and medications associated with putting patients to sleep (forget that — waking them up!), we want to be assured these folks have whatever they need.
But on the other hand, some of their equipment and supplies are pretty expensive and typically average about $40 in supply cost per case. Multiply that $40 by 3,000 cases, and we end up with $120,000 in supplies for the average hospital or surgery center. How much of that is wasted? Probably not a lot — while some anesthesia personnel can leave a rather messy area after their cases, they usually don’t waste all that much compared with the average back table.
How can they improve their costs? Simple: Write down what they use, and price it. Making the individuals aware of the cost is the best thing. Most just do not know the cost of the agents or pharmaceuticals they are using. Should they stop using them just because they are expensive? Of course not. But it will make a difference in how they approach the procedure and in their decision making about the agent of choice for the patient.
Auditing anesthesia procedures is not all that difficult. You can typically break it down into four groups:
• general anesthesia — major case (laparoscopic cholecystectomy);
• general anesthesia — minor case (bilateral myringotomy with tube placement);
• local with sedation;
• spinal.
It is confusing in these days of cost containment that systems pay people to enter a 45-cent supply item into a computer system. We recently observed four man-hours of work to record a total of $13 in charges into the computer system! The average wage per nurse is $22 an hour. Think about it.
If you want to control cost with anesthesia, consider standardizing the cost per groups mentioned previously. (They are only an example. You might have better categories.) Consider a flat fee for each category: for example, $60 for a general anesthesia — major cases and $40 for minor, etc. Check your costs, do the math yourself, and come up with a flat fee. The industry is going the way of flat fees anyway. Stop wasting valuable resources on mundane tasks.
Yes, you will lose some revenue on some cases. So be it. We must stop running our operating rooms on the "exception" and start dealing with the "norm" or typical situation. The majority of your cases will cost $40 or less. The ones that go over that amount are not worth the time involved in chasing down the costs. This may be a major issue for your accounting people, but it is time to be realistic. We just cannot afford to continue to pay highly skilled and talented personnel to run around after pennies.
Another way to control cost is to increase efficiency. Whenever people talk about cost, they seem to speak of supply cost or equipment cost; however, your biggest cost is inefficient operations. Cases that go over or start late, keeping people on overtime, or paying pool nurses — that is where the money is going. If you want to control your cost significantly, reduce your turnaround and start times. There are many ways to reduce cost of supplies, equipment, etc., but let’s look at the not so obvious. How can anesthesia help us control cost via increased efficiency?
If your anesthesia group is fee for service, you have a good opportunity for significant support. They have an incredible desire to finish the schedule as early as possible to release their people. They have staff who were on call the night before who need to go home, have other hospitals or centers to cover, or just plain want to get out of the operating room. Empower them to assist you in "running the board" to expedite case turnover. You don’t have to do it forever, but meet with the groups and elect a leader from them to assist you for a period of time in working together. Compare your benchmarks. Are you better or worse than when someone else did the scheduling? Chances are, you will be better off than you were. The sooner the cases are done for anesthesia, the more money they make. They are constantly looking for ways to be efficient. Give them the opportunity to prove it!
(Earnhart and Associates is an ambulatory surgery consulting firm specializing in all aspects of surgery center development and management. Earnhart can be reached at 5905 Tree Shadow Place, Suite 1200, Dallas, TX 75252. E-mail: [email protected]. Web: www. earnhart.com.)
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content