While an operating room (OR) that is used too little represents lost revenue for the hospital, an OR that’s used too much leads to overtime costs when cases go over schedule. This has cardiovascular service line leaders searching for a balance—much like Goldilocks—that’s just right.
Because time in the operating room is worth between $15-20 per minute, OR managers must pay careful attention to over- and under-utilization—both of which end up contributing to less desirable margins.
Part of an administrator’s job is to determine how many physicians, nurses, technologists, and other staff they need on hand to provide safe patient care, in addition to equipment and supplies. Without tracking and analyzing data in real time, hospitals can be either over-resourced with fixed costs that are too high, or under-resourced with too much overtime—sometimes even forcing them to divert patients to other facilities, which means lost revenue.
Delays caused by the inefficient utilization of OR resources also contribute to a poor patient experience due to the cascading effect that inevitably happens. For example, when the provider performing a procedure starts the case late and subsequently ends the case later than estimated, it lowers patient satisfaction scores and forces the hospital to pay overtime to the staff that must then stay later to finish the day’s scheduled work. Managing labor in real time in order to reduce these kinds of avoidable costs, plus maximizing productivity and patient satisfaction across the organization, has been shown to be extremely effective.
A recent study traced the costs associated with overtime pay in a hospital. Variability in room turnover, patient induction, and surgery times result in a high demand for nursing “overtime pay differential.” As a result, nearly $500,000 a year was budgeted by this hospital for nursing overtime demand. However, over the course of the study, total overtime pay for the nursing staff alone approached $1.4 million—a near 200 percent variance from budget.
Being able to extract, track, and analyze data is the key to improving cost effectiveness. OR utilization is just one of many things that can be measured to stay financially viable and boost outcomes. For more information, download 9 Ways to Boost Cardiovascular Service Line Margins and Quality today.