Collect cost information in three categories
January 1, 2000 2 minutes read
Collect cost information in three categories
Setting up a process to collect and analyze cost information may seem like a daunting task, but it can be done if you keep it simple at the start, says R. Craig Lind, managing director of Lind/Fitzsimons, a San Francisco-based management consulting firm.
The three areas suggested by Lind are staff costs, supply costs, and all other costs. Collecting this information and allocating the costs to certain procedures can be handled several ways, he says:
• Staff costs. "Collect the salary costs of the staff members who are involved in surgical procedures such as all operating room nurses or surgical techs," says Lind. Allocate their salary cost to individual procedures according to length of time in the operating room to obtain a basic idea of salary cost for each procedure, he suggests.
Do not include administrative staff such as patient admissions personnel or scheduling clerks in this category because their time is not really based on a procedure. Those staff spend the same amount of time admitting a patient or scheduling a time for surgery regardless of the complexity or simplicity of the procedure, he explains. The staff costs for personnel not directly involved in surgery should be included in the "all other costs" category.
• Supplies. "Most surgery programs have an inventory control program that can produce reports on the costs of supplies actually used in specific procedures," says Lind. If your same-day surgery program doesn’t have this capability, you can use physician preference cards to produce a predicted inventory list. "Work with materials management to assign costs to your predicted inventory to compile a cost profile for supplies for specific procedures."
• All other costs. Costs within this category are mostly fixed costs that don’t fluctuate according to numbers and types of surgical procedures, he says. Rent, depreciation, equipment costs, administrative staff salaries, utilities, and insurance are the most typical costs included in this category.
There are two ways to allocate these costs to arrive at a per procedure or CPT level cost. Because these costs are mostly fixed, you can allocate the cost equally to all procedures, regardless of the type of surgery, he says. The second way to allocate the cost would be based on the length of time of procedure. This would mean that a cataract procedure would include a smaller amount of "all other costs" than a lengthy orthopedic procedure, he explains. Either way of allocating costs to procedures will give you a good idea of your costs.
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