How Hospitals Can Save Millions

by Cutting Surgical Waste

A Case Study

How Hospitals Can Save Millions by Cutting Surgical Waste © 2014 USC Consulting Group, LP

The Healthcare Industry Today

• Rapid Technological Change

• Aging Population

• New Regulations

Reduce Overall Costs

BUT

Without Sacrificing Patient Care

or Safety!

Industry Challenge:

One Hospital System faced this

challenge by calling upon the

Process Improvement and

Material Utilization expertise of

Teaching Health System (name withheld upon request)

• Four Facilities

• 850 Beds

• 600 Practicing Physicians

• 30,000 Annual Surgeries

• $40 Million Surgical Supply Budget

• Primary Objective: Reduce costs by eliminating surgical

waste

Our Challenge:

Optimize the Surgical Preference

Card System

• A typical preference card had multiple items of the

same type but in various sizes (just in case).

• Items were opened in advance for expediency, but

often went unused (i.e. wasted).

• No targeted dollar value of preference cards by

procedure existed, so tracking of variances was not

possible.

• Two different, non-integrated systems were used to

track items; making comparisons of items issued vs.

used not possible.

• No tools existed to help make informed decisions

about what should or should not be on a preference

card.

The Surgical Preference

Card System

A team from USC Consulting Group (USCCG) installed

the proprietary LINCS® technology solution to:

• Collect, aggregate and analyze data from the Hospital’s

Perioperative Management Software and Materials

Management System to compare materials issued, used

and returned – across doctors, procedures and facilities.

• The LINCS reports allowed staff to see which items were

being wasted and why, so corrective action could be taken.

Key Benefit: LINCS provides factual data to optimize

preference cards by statistically validating which items should

remain on each card.

Phase 1. Data Capture and Analysis

“The most enjoyable part of the

implementation was the ease of use and

transition into the new process. Key

relationships were able to be developed

between our team and the team of

consultants. The processes that were

implemented were not difficult to learn

and came with ease of transition.”

Operating Room Director

Using the data provided by LINCS, the USCCG team was able to:

• Implement a color coding process for surgical items. The colors identify what action should be taken with each item:

No color – Always used and opened in advance.

Yellow – Duplicate item of different size, opened on Surgeon request only.

Red – Mandatory, but not opened unless needed.

• Add color coded bins to surgical carts identifying how items should be handled.

Key Benefit: The cart stocking process is more efficient and staff is able to focus on more patient-facing activities.

Phase 2. Process Improvement

“…the LINCS system has made it quicker and

more efficient to track and identify material

issues and take the correct action.”

Charge Nurse

The Action Item feature of LINCS allows for continuous

optimization of the material utilization process.

• Nurses can identify opportunities during a procedure to

improve material management, utilization or other issues

and input them as an Action Item, as they occur.

• This electronic repository replaces the previous

handwritten de-brief system, enabling immediate

assignment of issues to owners for resolution within

specified timeframes.

• LINCS provides alerts to staff when a preference card has

not been optimized.

Key Benefit: Improved communication and accountability

resulting in quicker follow-up, investigation and resolution.

Phase 3. Continuous Improvement

“The Action Item tool has tremendously

improved communication and provides

visibility to issues that occur. This gives

us confidence in bringing up

opportunities for improvement as we

know they are not lost in a black hole.”

Surgical Nurse

• $2.3 million annual cost savings

• 15% cost reduction per case across all preference card

items

• $14.9 million decrease in materials issued

• $11.2 million decrease in material returned

• Indirect Benefits:

o Increased efficiency

o Improved material handling (pulling, re-stocking, transit)

o Improved inventory management

o Better communication, tracking and reporting

Overall Results

“Following the processes implemented

and using the LINCS software, I am able

to view multiple reports to assess the

current performance of our OR Material

Usage. The reports allow me to identify

the areas of opportunity for cost savings,

and then apply the correct action to

achieve those savings.”

Operating Room Director

800.888.8872

www.USCCG.com

A global operations management consulting firm.

We help companies to improve financial

performance by improving their business

operations across the entire supply chain.

Founded in 1968 with offices in the U.S. and

Canada, we are passionate advocates for

business performance improvement.