John Harper 1, MBA/CHM, CRCST, CHL, CIS: David Kelman 1, PE
1 Sterile Ally, Inc
Abstract
The Central Sterile Department provides a vital service of healthcare, and in most cases provides the supplies and instruments utilized in a surgical procedure, as well as providing sterile instrumentation to other departments inside and outside the core facility. The aging population and the technological advancements in healthcare has resulted in an increase in the burden to the Central Sterile Department, with additional surgical volumes and more recently having to support the medical clinic instrumentation.
The escalating increase in workload burden to the Central Sterile Department, has been unable to keep pace with the expanding demand. The metrics utilized to measure and plan for the Central Sterile Department have been insufficient to effectively budget the necessary staffing and equipment capacity. Utilizing an inappropriate unit of measure does lead to an underestimation of the necessary resources, as the volume of instrument sets processed continue to climb.
The true fully burdened cost to process instrumentation is not well understood, as a vast majority of Central Sterile Department budgets only reflect a portion of the variable costs. Some of the expenses often not included in the cost structure that have significant impact on the department are facility space, utilities, general overhead, and IT expenses, just to name a few.
For the Central Sterile Department to improve the strategic planning, information is vital. The information must be specific to the Central Sterile Department, if there is not a tracking system in place get one. Ensure the information is accurate at all levels. Create or use a tiering system of the instrument set complexity to better align with the strategic plans of the institution. Develop a resource model of staffing and equipment capacity, continually refine it to improve its predictability.
Introduction
The Central Sterile Department provides a vital service within healthcare, and in most cases provides the supplies and instruments utilized in a surgical procedure, as well as providing sterile instrumentation to other departments inside and outside the core facility. Furthermore, the Central Sterile Department is responsible for cleaning, assembling, and sterilizing re-usable instrumentation. The Central Sterile Department, however, does not generate revenues as it does not receive a reimbursement payment from insurance companies or Medicare, but enables the revenue generating departments to function.
The aging population and the technological advancements in healthcare has resulted in an increase in the burden to the Central Sterile Department, with additional surgical volumes with more and complex instrumentation. As healthcare providers have added additional Operating Rooms (ORs) to meet the expanding demand and have acquired medical clinics, the Central Sterile Departments have been unable to keep pace with the expanding demand.
Even though the Central Sterile Department has not kept pace from an optimum design perspective, the need to provide sterile instrumentation to the operating room, ER, labor and delivery, and the medical clinics still must be satisfied. The Central Sterile Department attempts to meet these demands to the utmost of their ability, but quality issues do arise. Sometimes these quality issues are featured in the news media, such as “Breach in sterilization procedures results in 60 patients suing Porter Adventist Hospital”7 in the Denver Post or “More than 1,000 patients potentially exposed to HIV or hepatitis because of sterilization issues”2 AP News. But typically, the quality issues remain with the hospital and results in frustration between the operating room staff and that of the Central Sterile Department. The issues of quality and service and other contributing difficulties has been estimated to impact the cost of healthcare of $978 per surgical case5.
We will attempt to explore and provide insights as to why Central Sterile Department is unable to keep pace with the expanding demands of the OR and medical clinic.
Background
A review of literature, market trends, and the 60+ years of management experience of the authors working within Central Sterile Departments of premier health systems and major medical device companies across the country, help to provide insights into the difficulties of capacity and budgetary planning of the Central Sterile Department.
In 2014, the elderly was the smallest population group but accounted for approximately 34% of the healthcare spend3 and by 2040 almost 22% of the population will be over the age of 65. The American Academy of Orthopedic Surgeons, predict by 2030, primary total hip and knee replacements are projected to increase by 171 to 189 percent respectfully1. The aging population and the demand for surgical intervention will continue to place continued pressure upon the health systems to provide this increasing demand for healthcare.
As the volume of surgical procedures increase there is not a one-to-one ratio to the workload incurred by the Central Sterile Department. Depending upon the mix of surgical specialties and associated volumes, each additional surgical procedure adds on average an additional five (5) to eleven (11) instrument trays to be processed and the burden nearly increases at a logarithmic rate to the Central Sterile Department.
Hospital groups across the country have been acquiring medical practices and other healthcare providers creating an even more vertical healthcare network. Robert Book6 has stated that the rationale for this has been in response to the Affordable Care Act (ACA) to better address the Medicare fee-for service incentive program.
One of the unanticipated side effects of the consolidation of the medical clinics under the health system, is that the instrumentation utilized in these clinics must be processed to the same standards as those utilized in the operating room8. Unfortunately, very few medical clinics could satisfy those standards. The solution was to push that instrumentation to the Central Sterile Department of their sister hospitals. Even though the Central Sterile Departments were not initially designed or setup to manage this additional volume of instrumentation, it was expected that the Central Sterile Department would step up to the challenge, which they have. Today it is not uncommon that 15 to 30% of the instrumentation processed is for the medical clinics.
Sterilization of instruments are viewed as a given, such as when you get in your car that it will always start, but few understand what is required to achieve this function. The Central Sterile Departments are typically located in the basement of the hospital, and few appreciate the steps and time required to effectively clean, assemble, and properly sterilize the instrumentation, but expects that every instrument that is used to treat a patient is sterile 100 percent of the time.
A cost centers function is to control cost and to limit unwanted expenses. By controlling these expenses, the cost center aids in achieving positive financial results for the institution or company. The Central Sterile Department is a cost center, and from a management perspective the goal is to limit costs, and hence limit budget increases.
Discussion
Difficulties in planning and budgeting of staff and equipment capacity is highly dependent upon the healthcare providers current and anticipated mix of surgical specialties, and associated procedures. Utilizing a single unit type definition, which relates to staff time and equipment capacity requirements, will not provide insights into the future requirements.
Staffing Alignment
Staffing is critical to the Central Sterile Department as it is a labor-intensive operation to clean, assemble and sterilize the instrument sets. Identifying the project activity that will accrue in the coming year is of great importance, so the correct level resources are available to meet the needs of all of the departments serviced. Unfortunately, there are few tools available to help plan this activity.
Differing approaches have been utilized with only very limited success to plan for the necessary Full-Time Employee (FTE) requirements. Limited time studies view the time necessary for a single case. Time studies themselves, are very time consuming and expensive to conduct, and they also need to be repeated and updated frequently so they consider all of the variables and updates to ensure the accuracy of the data.
Another approach has been to attempt to calculate the Central Sterile Department resources to the OR Relative Value Units (RVU’s) per time of a surgical procedure as assigned by CMS, but there is no direct relationship to the time of the surgical procedure to the time requirement in Central Sterile Department. Some institutions the Central Sterile Department reports through the Material Management Department vs the Peri-Operative Department. The Materials Management Department utilizes adjusted patient days for their planning purposes and have attempted to use this also for the Central Sterile Department. As with the OR’s RVU’s there is not a predictive relationship to adjusted patient days
The Central Sterile Department has been looking to develop a RVU like the “Total Items Processed” to capture the workload that more directly correlates and could be used as a more accurate predictive tool. What is being used is a single unit of measure called an “instrument set”. The Central Sterile Department software application for tracking Central Sterile Department inventory utilized this basic unit of measure. The limitation of this unit of measure is if the instrument set consists of a single instrument sterilized and packaged in a peal pouch and is counted as one (1) instrument set. However, an instrument tray that contains 100 or more instruments is also counted as one (1) instrument set. To complicate this further, the majority of total joint and spine cases utilize loaner instrument trays brought in by the medical device companies for use for a single procedure, which could require 10 to 24 individual instrument trays and may contain anywhere from five (5) to an excess of 75 instruments per tray, and each one of these instrument trays are counted as one (1) instrument set and instrument count of one (1).
To those from departments outside of the Central Sterile Department it is easy to understand a single unit of measure but find it difficult to understand or appreciate that a single unit of measure is still in adequate to properly assist in predicting staffing resource and equipment capacity requirements.
The staff time required to process the wide variety of instrument sets varies drastically, and yet it is the standard unit of measure for time and costs utilized. AAMI had made an initial attempt to create four (4) different tiers of “complexity” to aid in understanding the time and costs associated with the complexity of these instrument sets. As this tool was introduced and later retired, the four-tiered model had been adapted by some to help delineate the complexity of instrumentation as it related to workload.
The AAMI tiered system was a good first attempt but there were some weaknesses. There was not a specific level directly for loaner instrumentation or multiple layered trays, but there should have been. The reason for this is that from a staff resource standpoint, loaner instruments require twice the staff time, versus hospital owned or based instrumentation sets. As the loaner instrument trays must be cleaned, assembled, and sterilized before the case. Upon Case completion the instruments must be cleaned and assembled prior to the medical device company removing them from the facility. Whereas the hospital owned, and based instrument sets would be sterilized and placed in sterile storage awaiting the next case. When the next case requires a loaner set of instruments, the cycle starts all over again. Remember that the medical device loaner trays, are counted as a single instrument set, with many times the number of instruments being unknown, so the set is counted as one (1) which does not account for the labor required to process the set. Furthermore, loaner instruments should arrive 48 hours prior to the scheduled procedure time, while in reality due to vendor instrument inventory limitations it is not unheard of to receive these sets with only a short window to process them. This means that the sterilization personnel must reprioritize their workload to get sets prepared and ready for surgery, which causes potential back-up of the other work currently being performed.
There is a need to improve the quality of the data within the tracking system. New recommendations suggest that loaner trays have an instrument count sheet delivered with the sets to better identify complexity. However, these sheets rarely make it into the tracking system because they are not a regularly used set, which can cause a skewed view of workload. As an example, at one institution the tracking system reflected those 382 instruments were utilized for a primary total knee replacement. These were only the hospital own instruments and the 11 medical device loaners trays. It missed the 200 instruments that were in those 11 instrument trays.
The distribution of the AAMI Levels complexity of instrument sets as described above, that were cleaned and sterilized annually is not a bell-shaped distribution but would be a positive skewed distribution to the AAMI Level I and II’s with the instrument sets of the OR, like the adjacent chart.
If over the last several years as more and more medical clinic instruments have been processed in the Central Sterile Department, the positive skewness would increase. This could provide a false sense that the Central Sterile Department was becoming more efficient as it was processing more instrument sets with limited increases in staff and or equipment capacity. When the “Work In Progress” (WIP), continues to grow.
Another option would be to use the individual instrument counts. This also is not without pitfalls. Just as with the variation of instrument sets, there significant variation in complexity of individual instruments, which requires significantly different amounts of staff time and equipment capacity.
DaVinci robotic arms requires significantly more time and equipment space than does a scalpel handle. So even from an individual instrument plan standpoint, tiering is required to obtain an improved insights into staffing and equipment capacity requirements.
The concept of one size fits all, is a leading problem of the inability to properly budget and plan for the needs of the Central Sterile Department. The AAMI tiered approach was a good first step, even though it did not address some multi-layered and loaner instrument trays, it did provide the ability to differentiate between instruments sets that required significant differences in time to process them, and some insights into capacity requirements.
This differentiation and insights could assist in the determination into staffing resource and space requirements and equipment capacity expansions needed to maintain alignment with the healthcare providers current and future plans. When capital funds are necessary for the Central Sterile Department to maintain alignment with those needs, this must be identified well in advance. As with any organization, revenue generating department demands may take precedence over a cost center needs, and the capital funds are often postponed for several years before they are available. Having a good insight into the anticipated growth plans of the healthcare provider and the associated requirements to ensure that the Central Sterile Department will properly meet the needs of the growing facility is critical.
Department Budgets
Departmental budgeting is an annual task performed in anticipation of the needs for the upcoming year, and possible planning for future years. The financial departments routinely provide guidelines for the budgeting process, regardless of if one creates a budget based upon last year’s actual budget and any anticipated changes or create a total new budget from the ground up. Even if the new projected budget requires significant increases in funds and staff, if it falls outside of the guidelines, those increases may not be accepted.
The budgets of the Central Sterile Departments are in reality, only partial budgets managing primarily the variable costs to the department. These include the personnel costs and benefits, supplies, repairs, and some additional line items. A full enterprise budget would include but not limited to, water/sewer, electrical, facility cost of the space, senior management*, and IT overhead, etc. The full enterprise budget could easily add an additional 30 to 50%. The actual cost to operate the Central Sterile Department is considerably greater than one appreciates. The cost to process an instrument set is significantly greater than simply dividing the budget by the number of instrument sets processed.
(*depending upon budget some locations have the management roll to an admin cost center)
The published literature highlights a broad variation in the cost to clean and sterilize an instrument, Mhlaba et al4 reported a range of $0.34-$0.47 for instruments in instrument trays and $0.81-$0.84 packaged individually in peel pouches. The cost estimate included only time to process and the corresponding employee hourly wage. Limiting the cost of sterilization to only considering an employee’s wage is a straightforward calculation but does not reflect the true cost to clean and sterilize an instrument. In the Van Meter Adams article9, identified the cost to be $3.19 per instrument. Their approach was significantly more comprehensive and attempted to include all the associated costs, including fixed and variable costs. This approach identified the total cost of sterilization to be $3.19 per instrument. This estimate is a better estimate of the enterprise cost to the healthcare provider than the former. Utilizing this estimated cost per instrument and the AAMI tier system just to view the cost for the four levels, it becomes quickly apparent the impact on each instrument sets’ complexity and the cost to process it.
Estimated Cost to Process AAMI Tiered Set Levels
It is common to estimate the cost to clean and sterilize an instrument set, by simply using the Central Sterile Department annual budget and dividing it by the number of instrument sets processed annually. As mentioned previously the volume distribution of the instrument sets are skewed to the sets that require least amount of time to process. Tiering the instrument sets into groupings based on instrument set complexity, we have found that the weighted average cost was 80 to more than 100% of the estimated average cost.
Utilizing the “instrument set” as the unit of measure regardless of its complexity, does result in a significant underestimation of the department’s needs in both staffing, equipment capacity, and expense budgets. This inaccuracy creates difficulties throughout the organization and especially for the Central Sterile Department team to provide the support necessary to those revenue generating departments that rely upon them.
If for example, over the past several years the number of “instrument sets” being processed had increased at a 6% rate. The impact to the Central Sterile Department was able to be addressed with minimal impact to budget and equipment capacity. The reason was that the vast majority of the increase was associated with medical clinic instrumentation (AAMI Level I) type instrumentation.
Now the healthcare provider has been and is planning to significantly increase surgical procedures that utilize complex instrumentation and medical device loaner instrument trays. The percentage increase of the more complex “instrument sets” is projected to be only 3%. This 3% increase has a staffing impact that would be greater than a seven (7) times impact vs the medical clinic increase utilizing the AAMI guidelines. The AAMI guidelines do not directly provide guidance regarding the equipment capacity requirements, but it would provide greater insights. The cost to process the more complex instrument sets will likely result in the Central Sterile Department running above the planned expense budget.
Conclusion
The Central Sterile Department is critical to our healthcare system. The Central Sterile Department is a labor and capital equipment intensive cost center within the healthcare provider. The needs of the doctors for the extremely wide variation of procedures, from the medical clinics to the most complex and instrument intensive surgeries performed in the operating rooms. Therefore, the Central Sterile Department must manage the wide variety of instrumentation these procedures require and utilize daily. The tools available to predict the necessary resources to aid the Central Sterile Department in planning and budgeting to properly support all the various procedures and surgeons are limited. There are numerous RVU’s for the OR associated with the various procedures for physicians and staff, based upon time and complexity. So why should it be expected that a single unit of measure be predictive of the resources required by the Central Sterile Department?
To address this issue there is not a simple solution, but there are steps that the leaders of the Central Sterile Department can utilize to aid in defending their position and budgetary needs. The leaders need good information, and that starts with improving the data within the tracking systems.
· Use or create a tiering system to aid in planning and budgeting
· The medical device loaner instrument sets need to have an instrument count associated with them.
· Align with the strategic healthcare providers strategic plan, developing the Central Sterile Department strategic resource and budget plan
· Annual budgeting, develop the resource and expense budget model, even if that is not the one utilized by the finance department, continue to refine your model as a better predictor of actual expenses versus finance predictions.
The Central Sterile Department activities are as critical to excellent healthcare as the surgeries performed. Continued education with insightful analytics will be necessary to educate those outside of the sterile processing area to better understand the issues and difficulties facing the Central Sterile Department. Appreciating the complete true costs to clean and sterilize instrument sets will provide improved insights to the healthcare providers to make better informed decisions in managing the changing healthcare environment. Incomplete estimates of the costs to clean and sterilize instrumentation prevents good planning and decision making.
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