Accurate Cost Accounting in Hospitals and ASCs: Why Is the O.R. Missing??

The ability to control costs is a business fundamental. Perhaps nowhere is that more evident than in the production of goods and delivery of services, processes with myriad expenses that if not closely tracked can easily eat into or wipe out a company’s profit margin.

Cost accounting helps protect margins by organizing and tracking all direct and indirect expenses, providing important insights that can lead to better budgeting, increased efficiency and, ultimately, higher profit.

Cost accounting is especially critical in a low margin high volume business.  Hospitals and ASCs are low margin and high volume businesses, with the operating room either the largest or second largest revenue and cost center.

The first and  fundamental key to perform cost accounting is to capture your costs.  The technology that is used to perform this task is “point of use” scanning. Point of use scanning is accurate, fast, and leads to good quality, complete data, which is essential to perform analysis. 

Point of use scanning/documentation is used in every industry, in every step of product or service delivery process. Some good examples are UPS scanning your delivery, a cash register scanning your purchase, or even you are ordering a product online from Amazon.  The accurate, complete data captured through scanning provides a windfall of data to manage the business operations, improves workflow efficiency.  It is not an exaggeration to state the point of use capture of data has revolutionized our lives as consumers.  It is the critical element of establishing cost measurement and business efficiency.

Yet, in the healthcare industry, in the most pivotal and important area of the hospital, point of use scanning is not widely used, and therefore cost accounting is dramatically hindered:  in the operating room surgical products and implants used are often manually written down, and manually keyed into a computer by a nurse.   

How can this be?

The problem lies in the unique nature of the operating room.  The sterile field (where products are used) is by nature a very difficult environment to scan, and the computer that documents surgical usage is apart from where the products are used and is a siloed system due to patient privacy laws.  It is a very poor documentation set up.  Nurses are required to manually key in copious amounts of product data as well, long numbers including lot numbers, product numbers, serial numbers, and expiration dates.

Imagine going to the grocery store and having the clerk use a computer and keyboard to enter in your items purchased.  It would be slow, error prone, and incredibly labor intensive.  It would drive up prices, kill efficiency, and impact the quality of the consumer experience. It would be a disaster. 

Yet, this is how healthcare documents the implants put inside your body during surgery.  Think about that.

Summate has completely solved this problem for healthcare with the Trakker system.  It is the first and only system that accurately captures ALL  data of products used during surgery at the point of use within the natural workflow of the operating room.

It is the “cash register” for the most critical cost center for the hospital and will enable far superior data collection for far superior analytics and cost accounting for the entire healthcare system. It is the machine that can dramatically change healthcare efficiency. 

It also improves patient safety for checking for product recall before it is used, and also capturing data for patient notification of product safety or recall issues post-surgery.

It is time for the Operating Room to put Scan in the Plan.  Healthcare can’t afford not to.