Truly significant cost reduction comes from efforts at scale. We will come back to this.
In Preference Card Optimization 201: Surgical Supply Cost Containment – Part 1 we conceptualized how to leverage preference cards to lower expense through the Preference Card Optimization Pyramid. This concept involved three interdependent tiers of optimization strategy for reducing surgical supply cost.
Let’s take a closer look at Tier 1: Surgeon Review and Increased Price Transparency by looking at a couple of published studies, as well as at the efficacy of a digital tool as a force multiplier!
Preference Card Optimization Pyramid
To begin, Harvey et al. demonstrated in a simple study that simple, manual review of preference cards could result in both direct (items removed) and indirect (labor, etc.) cost reduction. Twenty-one surgeons were asked to perform a cost-blind review of 81 preference cards representing their most commonly performed procedures and were instructed to keep, discard or hold items depending on perceived need. Only 59% of cards were reviewed and only 66% surgeons participated, but nonetheless measurable savings were recorded.
Could a digital tool have helped increase compliance and bolstered cost savings?
In a more involved study by Zygourakis et al., surgeons from multiple specialties were shown monthly, itemized supply costs in an itemized, preference card-like format for commonly performed procedures along with aggregate, median monthly costs. While the format was not actionable, i.e. individual surgeons could not make changes to their surgical supplies, changes were made at the department level based upon individual surgeons responding to their cost feedback.
Engagement was high, indicated as illustrated below that surgeons were both interested in cost data and that their utilization decisions were influence by cost data.
The intervention group saw a 6.54% decrease in direct surgical supply costs versus the control group – which was not shown cost data – where a 7.42% increase in surgical supply cost was observed over the same period! That’s a 13.96% net swing!
But OK. Time out.
I have practiced orthopedic surgery for the better part of two decades, and I can tell you that the last thing I want to do after a long, stressful day in the operating room or clinic is have an administrator ask for my time to discuss surgical supply cost.
The two studies cited above involved a significant series of efforts: educate the surgeon about the initiative; track the surgeon down between/after cases or during/after clinic; convince the surgeon to look at some data, and on and on.
In the language of business, such initiatives simply are not scalable.
And that’s the problem.
Truly significant cost reduction comes from efforts at scale
Additionally, although I am keenly (obviously) interested in the cost of healthcare and what can be done to lower cost and improve efficiency, I want information that helps me to achieve those goals in a convenient (show me when I want to see it), curated (show me what I need to know) and actionable (let me do something about it) format.
Enter digital solutions
Our institution used a novel, digital solution to present preference card-based surgical supply cost data in a convenient, curated, actionable format. The results were impressive – illustrated below, and scalable, particularly when compared to a previous, more traditional, manual initiative undertaken for the same purpose.
The traditional project had required significant labor from FTE’s who had other jobs in the organization, required months to execute and yielded inferior results from a surgeon engagement perspective.
Digital solutions like the one used in this project are inherently scalable and can be deployed in a manner that is consistently convenient, curated and actionable for the surgeons involved.
In my next post we will turn up the heat a bit, move to Tier II of the Preference Card Optimization Pyramid: Utilization Analysis, Hold/Open Optimization and Item Substitution, and save more $$$!
Dr. McCarty is a practicing orthopedic surgeon in Minneapolis, MN, former team physician for the Minnesota Twins, Fuqua alum, healthcare leader and entrepreneur.