C. P. Childers1, M. Maggard-Gibbons1 1University Of California – Los Angeles,Los Angeles, CA, USA
Introduction: Increasing value in surgery requires improving quality, decreasing costs, or both. Estimates of operating room (OR) cost have ranged from $12 to over $100 per minute. To date, the validity of these values has not been tested. This study sought to calculate the cost of a minute of OR time using statewide hospital financial data, to evaluate how this cost varies by setting and facility characteristics, and to ascertain the proportion of costs that are modifiable.
Methods: Financial disclosures were compiled from all short-term general and specialty care hospitals in California in fiscal year (FY) 2014. Each report contains over 16,000 data points on a broad array of variables including facility characteristics, utilization measures, and financial statements. For each facility, total expenses for the “surgery and recovery” revenue center were divided by the number of OR minutes (defined as the start to end of anesthesia time) to generate the cost per minute. These estimates were then aggregated into a median cost for a minute of OR time and stratified by setting and teaching status. Expenses were broken into direct and indirect components, with direct expenses further sub classified into salary, wages, non-billable supplies, and other. Bivariate comparisons were made using non-parametric tests.
Results: In FY2014, financial statements were extracted from 294 hospitals; of which, 58% were not-for-profit, 26% were for-profit, and 16% were government owned. Median cost of one minute of OR time was $33.78 (inpatient) and $34.18 (ambulatory). There was no difference in the cost of a minute of OR time between for-profit, not-for-profit, and government owned facilities, in either setting (inpatient, p=0.08; ambulatory p=0.65). Teaching hospitals had lower median expenditures in the inpatient setting ($27.68 vs. $34.69, p<0.01), but were no different in the ambulatory setting (p=0.59). Of the $34 per minute, 56-59% are direct costs including 39-40% wages and benefits, 4-5% non-billable supplies, and 7-9% other direct expenses (Table).
Conclusion: This study estimates the cost of a minute of OR time at $34 ($2,040/hour), with minimal variation by setting and ownership. The majority of this is non-modifiable over the short-term such as indirect costs (e.g. security, parking), staff benefits, and other direct expenses (e.g. equipment depreciation). These values are the first empirical estimates of OR cost. Further, understanding the composition of costs allows identification of high-value targets for value-improvement efforts.
