Even though case costing is critically important, software firms are well aware that you have neither the time nor temperament to actually sit down and do it. "Everybody is geared toward getting cases in, performed properly and safely and getting the room turned over for the next case," says Craig Veach, Amkai's senior vice president of operations. "They don't have extra staff sitting around to do that extra analysis."

The good news is that case costing has come a long way from the days when you had to spend hours transferring data from your operative reports and preference cards into an Excel spreadsheet. Today's surgical data management tools are better equipped to help you do accurate case costing, because IT companies are offering more all-inclusive enterprise software packages that house everything — scheduling, inventory management, clinical documentation, reimbursements and accounting — under one roof (see "Case Costing Software Solutions" on page 53). In what is commonly referred to as "real-time case costing," many systems let you instantly tally the direct costs of a procedure as soon as the case is closed.

Working smarter, not harder
Here's how the latest generation of data management software makes it easier for you to keep tabs on supply costs, labor, overhead and reimbursements.

• Automatic reporting. Lets you customize what types of reports you want, and when and how often you want them created. For example, you could program the system to generate case cost reports for your top 10 procedures by CPT code at the end of every month.
• Breakdowns and comparisons. How would you like your case costs broken down? Today's software lets you choose the parameters so you can examine case costs over a certain time frame, by CPT code, specialty, physician, payor, patient population and more, with relative ease and flexibility.
• Benchmarking. Genascis's Web-based solution, called Medibis, takes the comparison capability one step further, letting you benchmark against other facilities. The company aggregates and de-identifies the data from its more than 300 customers around the country and lets you choose which types of facilities — by number of ORs, case mix, or region — you want to compare yourself to.
• Profitability. "It's one thing to know your cost," says Kermit Randa of Surgical Information Systems. "It's another to know it from the perspective of what you're getting paid." Many case-costing systems are integrated with the billing and accounts receivable departments, so you can look at the profitability of your cases and ensure you're being paid accurately for them.
• Trends and forecasting. How do the costs of your highest-volume cases today compare with those of 6 months ago? Your software may be able to help you monitor trends to "make sure you're not getting creep-in," as Mr. Veach puts it. Likewise, what would happen to your profitability if one of your payors significantly altered their rates for the following year? Some products, such as AmkaiOffice and Experior's SurgeOn, let you generate reports that project the impact such "what if" scenarios could have on your future profits.
• Presentation. Do you prefer the comfort of the trusty spreadsheet format? Or do your board members' eyes glaze over every time you break out the numbers? Many programs give you the option of importing your case cost reports into Excel or converting them into colorful graphs and tables with the click of a button.

Data integrity
"Garbage in, garbage out" is a well-known saying in the information technology world that means, simply, the quality of the data you enter into a system will determine the quality of the results you get when you process that data. Getting accurate information into a surgical cost accounting system is especially challenging considering the complex nature of surgery. You've got patient information, physician preference cards, anesthesia, staffing, scheduling, reimbursements — all of these elements are pieces of the case-costing puzzle, but how do you know that each piece is as accurate and up to date as possible?

"One of the difficult things for OR managers to manage is the accuracy of the information they're given," notes John Buzzelli, national sales leader for Cerner Corp. IT companies are responding to that challenge by building automated processes into their data management systems. For example, Cerner's SurgiNet solution features closed-loop inventory, which directly links supply chain management to clinical documentation. "As supplies are used clinically, they are decremented from the specific order inventory location," says Mr. Buzzelli. SourceMedical's PurchaseConnection also features "real-time connectivity between your supply vendors" and your administrative and clinical data systems, says Patrick Doyle, the company's vice president of sales. Surgical Information Systems' Perioperative Solution links clinical documentation and billing in a similar way through its rules-based charging module, which captures charge data automatically from clinical reports and submits it electronically to billing to reduce lost charges.

The flow of information in the case-costing process begins with surgeon preference cards, so keeping them up to date is especially critical to ensuring the quality of your data. "The pref card is really an expectation of how this procedure is going to be performed: timewise, who's involved, what supplies are going to be used, what instruments," says Mr. Veach. However, you can't always predict, based on the pref card alone, exactly what supplies will be used in every case. AmkaiOffice helps solve this problem by letting you go into pref cards and establish whether an item was opened or held during the case, and whether an item was wasted or found to be defective. If administrators start to see trends in supply usage based on these pref card alterations, they can update the preset card or alter their purchasing strategies accordingly. GE Healthcare Information Technology's Centricity Perioperative solution's "clinical logic" feature will recognize certain supplies, implants or tissues that are documented in a case but aren't included in the pref card, and automatically generate a line item for them. Several programs, such as Cerner's SurgiNet, GE's Centricity and Mednet's OASIS enterprise software are also compatible with barcoding systems that help track items used in a case.

Advanced reporting
Everyone concerned about pinpointing cost savings down to the last penny can now take simple case cost reports to the next level. You can "slice and dice the data," as Roy Georgia, vice president of data solutions for Genascis, puts it, to create "not a static report, but more of an interactive tool." "Analytics is where it all comes together," adds Mr. Randa. "Anyone can do reporting," he says, but "if you're not drilling down to the itty-bitty data points of the operations of your surgery facility, you're never going to be able to find true, long-lasting, sustainable cost savings and operational improvements."

So rather than simply generating a monthly report that shows your costs have gone up for a particular case, you can easily maneuver through the layers of data to see exactly why that happened. Did a particular surgeon alter his practices? Did one of your high-volume supplies go up in price? Did you fail to collect reimbursements in a timely manner? "Ultimately, regular and consistent case-costing audits will help a facility determine, among other things, a proper case specialty mix, their required case volume, attractive specialties and, ideally, which insurance contracts make sense to implement or reject," says Mr. Doyle.

Getting started
Despite the technological advances in OR data management, you can't rely on technology alone to do all the work for you. "There are some great IT products out there that can give you a lot of good information," says Joan Dentler, co-founder of Texas-based consulting firm ASC Strategies, "but my experience has been, if people aren't collecting the data of their costs and putting it into their IT system appropriately, completely and accurately, all the reporting in the end won't mean much." Even with all the automated solutions available, Ms. Dentler notes that doing accurate case costing is "very labor-intensive on the front end." Most IT firms will help you build the necessary foundation of information when you first purchase a new software package, and some, such as Healthcare Insights, will also give you the option of outsourcing costing services. But in most cases, the responsibility of ensuring the continued quality of the data rests with you and your staff.

Mr. Georgia recommends that you take the time to learn the ins and outs of your data management system and include clinical staff in the process, since they're often the ones entering data at the front end. "It really becomes a training process that [surgical facilities] are going to have to keep moving toward, especially given the current economic and market conditions," he says. Ms. Dentler says you should educate staff not only about how they should be entering and updating information, but also why it's important that they do so. "It's really important to get everybody on board with case costing."

If all of that seems daunting, Ms. Dentler recommends that you start small. "Don't begin by doing every case that comes in the door; start with your top 10 cases," she advises. Once you've trained the staff and brought everyone on board, then you can add the next 10 cases, then the next 10, to your case-costing regimen. And if you run into problems along the way, don't be discouraged. Says Ms. Dentler, "Some case costing, even if it's not absolutely perfect, is better than none."