For example, one day I sat with the orthopedic surgeons after observing a surgery as we always do before we finalize a contract with a participating hospital. I asked why the surgeon had a major ortho tray and a major drape pack for a shoulder arthroscopy. The surgeon said “Heck if I know… All I need is a few Army-Navy retractors, and about three other instruments. All that other stuff is a pain because it has to be counted twice, washed, repacked and sterilized. My patient is under anesthesia longer while all that counting is going on, and I could have had another done with the time wasted each day. Also, there’s too many kinds of sutures on the Mayo stand, I use Silk and Prolene, but they still have stuff on there from my cases ten years ago. And, those drapes, what a pain, I wish they would just use a medium pack. Also, if they could just have certain things in the room and available with the Circulating Nurse but don’t open it unless I need it, that would cut down some of this waste too!” I grinned….just like the good ole days!

Right about then, another orthopedic surgeon came over and said, “I just heard Dr. J and if you’re going to change that stuff for him, I want mine changed too! Only I like those new blue gloves and I want an extra Allis clamp in my tray.” I wished the OR supervisor and the managed care contracting person and the CFO were present, but the latter two probably don’t know where this room is.

If you are the typical managed care contracting specialist, you may not have any idea what the heck all that was about, or its impact on costs, time, throughput, patient safety, quality, efficiency, the Post Anesthesia Care Unit (PACU), supply chain, purchasing, scheduling, and surgeon loyalty, anesthesiologist revenue and facility satisfaction. If you bill for percent of charges, you may or may not be losing money on each case. If you bill on a case rate and miss the detail, you are going to lose money…and nobody did it to you.

The next step is to determine who will participate in the case rate program.

It is not appropriate for every surgeon, every specialty, or every case.  Outpatient case rates are the easiest to start with.