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Traditionally, the pricing determinations for Operating Room services have not included the labor resource consumed by a given procedure. Historically, prices have been based on time charges that have left little of the statistical information necessary to develop accurate procedure costs.

HCI can assemble the needed information by performing a surgical services pricing study. Using this data, we develop a procedural pricing methodology that will enable the tracking of cost-related statistics and pricing to patients by specific procedure. In short, we can perform the roughly the same type of cost analysis in the surgical arena that we do for the rest of the hospital. The study develops procedure pricing that is based on resource utilization including direct labor time for all aspects of the procedure.

HCI performs the following steps in implementing this pricing study:

  1. Our consultants meet with the Director of Surgical Services and other department personnel to determine specific objectives and goals, and to establish a project timeline.
  2. We collect information on hospital pricing, including revenue and usage reports, available cost information, and other departmental reports.
  3. We obtain the financial information required for the development of procedure costs, including:
    • Labor categories and wage rates
    • Department expenses and budget reports
    • Equipment depreciation documentation (fixed assets)
  4. The collected information is analyzed, and a list of procedures representing 75% of the total volume of the operating room is generated.
  5. A comprehensive review of resources used in surgical procedures is conducted, including labor, materials, department expenses and allocated overhead costs. We then develop Cost Sheets detailing the component cost of each surgical procedure.
  6. For each of the procedures listed in the top 75% (step 4), we develop a Procedural Preparation charge (covering preparatory materials) and a Per Minute charge (based on the procedure's resource consumption, including labor). (These new charges are tied back to the Revenue and Usage Report to ensure that the new pricing mechanism is gross revenue neutral.)
  7. For those procedures not listed in the top 75%, a miscellaneous Acuity Level structure is created (based again on hospital resource consumption).
  8. Finally, we meet with the department director and other personnel to review the recommended rate changes and Cost Sheets, and to obtain their input into the charge process.

Once the new Procedural Charges have been finalized, we will conduct an in-service education session for Surgical Services personnel to train them in the utilization of the new charging structure and the importance of accurately capturing the data.