Cost awareness and cost containment at the Hospital for Special Surgery: Strategies and total hip replacement cost centers

To help balance the operating budget of The Hospital for Special Surgery, which was encountering an annual major deficit of $4 million in 1989, a program of cost awareness leading to cost containment was instituted in 1990. Costs of supplies, implants, and equipment were identified and reviewed by the hospital staff, including orthopaedic surgeons, orthopaedic residents, health care personnel, and administration, for cost effectiveness. Methods to accomplish the goals included structuring committees for information; workshops organized by different services to affect change; feedback to health care professionals through posters and newsletters; and statistical identification for continued education. Major cost savings resulted from recycling wasted implants, reduction of costly implants, and reduction of unnecessary supplies. As a result, vendors had been challenged, leading to more competitive prices. This program has opened new avenues of cost reduction without sacrificing quality of medical care and has contributed to a breakdown of barriers between medical staff, administration, and finance, leading to a strong hospital-team commitment. The price of health care in the United States in 1993 exceeded $900 billion. Health care expenditures now account for approximately 14% of the gross domestic product. Health care costs have been rising faster than the inflation rate for more than a decade. The result is the current national focus on containment of health care expenditures.