The University of Texas MD Anderson Cancer Center successfully employed a variety of “nudges” to get surgeons to consider costs when deciding which operating-room supplies to use. The behavioral economics techniques included a dashboard that showed the costs of the discretionary items (e.g., disposable implants, instruments, sutures) to be used in upcoming procedures; comparisons of the supply costs of each surgeon within individual departments; posters placed in dictation rooms and operating suites that displayed low-cost alternatives for common equipment such as staplers, sutures, and thermal cutting devices; and monthly reports that showed individual surgeons how their average costs compared with those of their peers and the overall department for a given type of procedure.
An estimated 50 million inpatient surgical procedures occur each year in the United States, at a cost of $175 billion. Given these striking numbers and the fact that over 40% of costs of the acute care episodes of surgical patients are related to the resource-intensive operating room, it comes as no surprise that the OR has become a locus of cost-containment initiatives for health systems. As a starting point, systems such as the University of California, San Francisco have experimented with deploying cost-transparency tools and financial incentives in the OR. University of Utah Health has gone one step further by bringing surgeons together to review spending data and develop standardized processes for addressing variation in OR supply costs.
These initiatives have yielded savings without negatively affecting care quality. Yet to realize the value of surgical cost-transparency at scale, health systems need to make cost-transparency a daily habit, rather than treating it as an extra action item for surgeons to add to their already busy To Do lists.
Of course, durably changing physician behavior is easier said than done. To accomplish this goal, we believe that hospital leaders need to go beyond just showing surgeons personalized cost information or offering them financial incentives. In addition, health systems should redesign the environmental context (e.g., the OR) where these decisions are taking place and account for the psychological makeup of surgeons (e.g., their innate competitiveness and perfectionism). Examples of ways to encourage surgeons to make more cost-efficient choices include real-time reminders about spending, publicly reporting surgeons’ cost outcomes, and explicitly treating health care production costs as a key performance metric.
At the University of Texas MD Anderson Cancer Center, one of the leading cancer centers in the United States, we used behavioral economics to implement a new approach to OR cost-transparency. Our “Know Your Costs” (KYC) campaign introduced a combination o