Knowledge is Power: Understand Your Hospital’s True Cost Per Case

As a health tech start-up, we often hear of the efforts being made by health systems today, to define true cost per case. A true cost per case evaluation allows for analysis of all physician preferences for the same procedure within a facility and comparison of similar procedures across an entire health system. And believe it or not, that is just the beginning of opportunities it unveils. This level of knowledge provides invaluable insight into hospital spending, ultimately giving way to positive improvements in patient care.

Some health systems, like the University of Utah Health Care, have truly achieved an understanding for equipment and supply costs, making significant strides in containing the rising costs through standardization initiatives. Unfortunately, they are in the small minority that is succeeding. Even the most progressive health systems have yet to comprehensively define their true cost per case. Why? Because reusable, hand-held surgical devices are a complex, multi-variable component of this evaluation, making their value within the total cost per case difficult to define.

Working with some committed clients, we have together cracked the code for automating the process for defining true cost per case and are now applying it across all of their procedures. The critical first step in this process is consolidating and structuring data from multiple systems into one place. This includes:

  • case schedules
  • case logs
  • preference cards
  • inventory detail
  • instrument prices
  • maintenance costs
  • labor wages
  • productivity
  • facility costs
  • lifespan

Once consolidated, we rapidly digest these data sets to custom match a hospital’s cost per case. This data is then calibrated against actual spend overtime to enhance accuracy. Just recently, we took a look at the instrument costs for a Laparoscopic Cholecystectomy:

  • 3-4 surgical sets being utilized in the procedure
  • 130-182 products total (camera, light cord, rigid scopes, laparoscopic instruments, stainless instruments, etc.)
  • 12 doctors performing this procedure

Total Cost per Case for Re-usable, Hand-Held Devices – $195-$270 (range across all 12 doctors)

In defining this cost per case, interest in establishing a benchmark cost for this procedure has risen as well as efforts to reduce it. 

By routinely calibrating your data against actual performance and spend, we provide a comprehensive analysis for measuring facility efficiency. Our goal is to turn the minority of success stories for defining true cost per case into the majority. Providing health systems with accurate information to make informed decisions where it really does matter the most.