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jha.sciedupress.com Journal of Hospital Administration 2018, Vol. 7, No. 6
ORIGINAL ARTICLE
Financial cost of elective day of surgery cancellations
Elina Turunen∗1,2, Merja Miettinen3, Leena Setälä4, Katri Vehviläinen-Julkunen2,3
1Diaconia University of Applied Sciences, Finland
2Department of Nursing Science, University of Eastern Finland, Finland
3Kuopio University Hospital, Finland
4Hospital District of Southwest Finland, Finland
Received: June 16, 2018 Accepted: November 13, 2018 Online Published: November 19, 2018
DOI: 10.5430/jha.v7n6p30 URL: https://doi.org/10.5430/jha.v7n6p30
ABS TR ACT
Operative care is one of the major areas of healthcare services as over 310 million surgeries are conducted yearly. Surgery
cancellations is a widely used indicator when evaluating the quality of preoperative care. Cancellations cause financial lost for
organizations, however there is only limited research about the costs. The aim of this study was to evaluate the cost of elective day
of surgery (DOS) cancellations in 13 operative specialties at a university hospital in Finland between September 1, 2015 and May
31, 2016 after a structured preoperative protocol was implemented to practice and a cancellation rate of 4.7% was recognized.
Procedure prices conducted the data for the research and were collected from the hospital’s invoicing system. Financial loss and
savings of cancellations were calculated from the total cost of procedures. As a result the total cost of DOS cancellations during
the nine-month time period was 953,374.27 euros and mean loss of a single cancelled operation was 2,459.91 euros. The total of
material savings for the hospital were 106,917.33 euros. As a conclusion, DOS cancellations cause unnecessary wastage, and
financial aspects should be followed and evaluated systematically by setting goals and providing continuing developments.
Key Words: Economics, Finance, Waste, Cost, Surgery cancellation, Operative care
1. INTRODUCTION
The hospital sector is the largest component of health care
spending in the Organization for Economic Co-operation
and Development (OECD) and European Union (EU) coun-
tries.
[1]
Surgery is one of the major areas of healthcare ser-
vices. Globally, approximately 312.9 million operations are
conducted every year.
[2]
According to study results of a
cross-sectional and longitudinal study conducted in USA the
mean cost of one minute of operation room (OR) time is
approximately 36-37 US dollars.
[3]
Day of surgery (DOS)
cancellations are a recognized problem in perioperative care
and one of the nursing-sensitive quality indicators in peri-
operative care.
[4]
A single cancellation causes personal and
economic harm for the patient
[5]
and resource related waste
for organizations.[6]
Cancellation occurrences vary widely across health care orga-
nizations; the highest rate may be more than 700 times higher
than the lowest.
[7]
Studies published since 2016 report vari-
able elective DOS cancellation rates of 4.4% (tertiary care
teaching hospital in Lebanon),
[8]
4.7% (university hospital
in Finland),
[9]
8.8% (pediatric ambulatory surgery center in
the US),
[10]
26% (regional hospital in Oman),
[11]
and 44.5%
(general hospital in South Africa).
[12]
Similar to cancellation
rates, costs of surgical procedures vary across countries and
are related to the type of procedure.[7, 13, 14]
The development of surgical processes is encouraged as a
∗Correspondence:
Elina Turunen; Email: elturunen@gmail.com; Address: Department of Nursing Science, University of Eastern Finland,
Yliopistonranta 1, P.O. Box 1627, FI-70211 Kuopio, Finland.
30 ISSN 1927-6990 E-ISSN 1927-7008
jha.sciedupress.com Journal of Hospital Administration 2018, Vol. 7, No. 6
way to reduce unnecessary costs.
[1]
Practices for enhancing
high-quality, safe and cost-effective perioperative processes
have been implemented worldwide in recent years. Preop-
erative cost effectiveness requires optimization of the surgi-
cal process and patient specific management.
[15]
A patient-
centered approach to the reform of preoperative care has
led to positive change, decreasing DOS cancellations and
average length of stay and increasing patient volume, OR
use, the number of patients admitted on the DOS, and patient
satisfaction.[9, 16–23, 23–28, 28]
“Cost” is defined as the amount of hospital expenditures for
resources used to deliver care.
[13]
Operational costs in the
OR depend on start times, turnover times, cancellation rates,
supplies, equipment, and staffing.
[30]
The development and
remodeling of surgical processes to achieve cost effective-
ness have been encouraged. Researchers have been careful in
measuring the economic impact of these changes, although
evaluation based on cost is recommended.[16,26]
The aim of this study is to measure the financial cost of DOS
cancellations. Data are drawn from a university hospital’s 13
operative specialties after the implementation of an evidence
based, structured preoperative protocol.[9,31]
Literature review
A literature review of costs of DOS cancellations was con-
ducted in PubMed and CINAHL in 2010-2017 using key-
words such as “surgery”, “operation”, “cancellation”, “cost”,
and “evaluation”. Articles included in the literature review
are presented in Table 1. A total of six academic journal
articles reported on costs of cancellations. Four articles were
published in the United States,
[32–35]
one in Brazil,
[36]
and
one in South Africa.
[12]
In addition, an editorial article pub-
lished in the United States discussed OR time costs and sug-
gested using an average cost of 15 to 20 US dollars per OR
minute for a basic surgical procedure, excluding physician
costs.[13]
The earliest cost evaluation was based on data collected in
2004,
[36]
and the latest used data from 2014.
[12, 35]
Calcula-
tions of surgery cancellation costs were based on several dif-
ferent indicators: wasted OR time,
[32, 33]
hospital and physi-
cian data, such as the average surgeon fee for the planned
procedure, including the average hospital facility fee per
minute based on planned surgical time,
[34]
an organization’s
annual statistics on what were considered unnecessary in-
patient days,
[12]
and nurse-led preoperative assessments.
[35]
Costs of cancellations were measured after preparation of
the operating room and during the operation, costs were di-
vided into four parts: materials, fees, medication, and human
resources.[36]
The average cost of a cancelled operation in the US is approx-
imately 5,000 to 8,000 US dollars.
[33–35]
In South Africa, the
cost is approximately 2,000 US dollars,
[12]
and in Brazil, it is
30 US dollars.
[36]
Wasted OR suite minutes cost 10 to 20 US
dollars per minute on average in the US.
[13, 32]
Research on
the financial cost of DOS cancellations is limited, and more
evidence-based studies are needed to promote understanding
of the costs of cancelled operations.
2. METHODS
2.1 Aims
The aim of this study is to measure the financial cost of DOS
cancellations using procedure prices for a university hospi-
tal’s 13 operative specialties during a nine-month period.
2.2 Research site
The research was conducted at a university teaching hospi-
tal in Finland. The hospital is responsible for specialized
medical care for nearly a million inhabitants and provides
care in all surgical specialties. The hospital has 26 oper-
ating theaters where approximately 22,000 procedures are
conducted yearly. OR staff work in elective surgery setting
mainly Monday to Friday between 7:00 a.m.–3:30 p.m.
The hospital put a structured, evidence based preoperative
protocol into clinical practice in all 13 operative special-
ties (gastrointestinal surgery; pediatrics; hand surgery; car-
diac and thoracic surgery; urology; vascular surgery; neuro-
surgery; gynecology; ophthalmology; ear, nose, and throat
surgery; dental surgery; orthopedics; and plastic surgery)
between the years 2014 and 2015. In May 2015, all intra-
operative care and recovery areas were gathered and moved
to a single location while a new hospital building was being
opened.
The new protocol was coordinated by preoperative nurses.
Their main responsibility was to meet patients’ needs individ-
ually, prepare patients for surgery, and cooperate with other
professionals in the patients’ care.
[31]
The implementation
of the new preoperative protocol led to an increase in the
number of patients arriving at the hospital on the day of an
operation and decreased the DOS cancellation rate signifi-
cantly in cases where the “patient did not show up”. The
total DOS cancellation rate at the hospital was 4.7%.[9]
2.3 Ethical approval
The University Committee on Research Ethics evaluated the
ethical aspects of this research and stated that the research
was scientifically justified (25/2014). The university hospital
granted permission to conduct the research (1/2015).
Published by Sciedu Press 31
jha.sciedupress.com Journal of Hospital Administration 2018, Vol. 7, No. 6
2.4 Data collection and analysis
This was a retrospective cross-sectional cost evaluation study.
Data were collected from the hospital’s invoicing system
with the hospital account manager’s assistance. The data
were linked with DOS cancellation rates and reasons col-
lected from an administrative database for surgical patients
for the period from September 1, 2015 to May 31, 2016.
[9]
Costs of cancellations are reported in euros in terms of total
waste and savings.
Table 1. Research reporting costs of surgery cancellations (years 2007-2017)
Source
Research site
Cost indicator and data
collection
Outcomes
Cost of a cancellation
per patient
Fitzsimons
et al., 2016.
USA
General hospital
Cardiac patients
Wasted OR time
Jan 2010 – Dec 2013
5110 scheduled cases, 43 cancellations (0.84%).
The cancellations resulted in 89 hours and 34 minutes of wasted
OR time.
The most commonly referenced average cost of unstaffed OR
time is 62 US dollars/minute.
This value would add 333 188 US dollars to the costs of the
cancellations.
333,188/43 =
7,748.60 US dollars
Sebach
et al., 2015.
USA
An evidence-based
NP-managed
preoperative
evaluation clinic
Nurse-led preoperative
assessment
October to December 2013
and October to December
2014
Pre: 2,789 completed surgeries and 77 cancellations.
Post: 2,372 planned surgeries and 36 cancellations.
The lost revenue from 77 surgical cancellations was $386,033.
The lost revenue from 36 surgical cancellations was $184,480.
(386,033 + 184,480)/
(77 + 36) =
5,048.80 US dollars
Argo
et al., 2009.
USA
123 Veterans Health
Administration
medical centers
9 specialties
Wasted OR time
per year 2006
329,784 scheduled surgeries, 40,988 cancellations (12.4%).
The cost of unused OR time in the VA has been estimated at $600
per hour in 2009 dollars (total OR cost divided by work hours
minus material costs).
Cancellations of elective surgical cases are inefficient and costly
to the VA system, with a 1.4% CR leading to an estimated loss of
more than 32 million US dollars in 2006.
10 US dollars/OR suite
minute
Pohlman
et al., 2012.
USA
Outpatient surgery
center, 318-bed
tertiary care pediatric
hospital
Urology
Results were calculated from
hospital and physician data
as the average surgeon fee for
the planned surgical
procedure plus the average
hospital facility fee per
minute based on planned
surgical time
January to July 2010
114 cancellations out of 854 scheduled procedures during the
study period.
The potential lost revenue for cancelled outpatient pediatric
urology procedures averaged $4,802 per cancellation, with an
estimated $500,000 in lost revenue during the 7-month study
period.
4,802 US dollars
Bhuiyan
et al., 2017.
South Africa
One main operation
theatre
The cost of inpatient stay
January to December 2014
537 booked patients and 239 cancellations (44.5%).
The cost per inpatient per day was estimated at ZAR 4,890 at PTB
Hospital and ZAR 2,100 at district hospitals, and the total cost per
cancelled operation was ZAR 25,860.
The cost incurred due to cancellations was approximately ZAR 6
million for the hospital, with additional cost and emotional trauma
for the patients.
ZAR 25,860 =
1,894.56 US dollars
(13.4.2017 exchange
rate)
Perroca
et al., 2007.
Brazil
Surgical center of a
public teaching
hospital
1,600 large-,
medium- and
small-size
surgeries/mo
Cancellations after the
preparation of the surgery
room and during the surgery
(materials, fees, medication
and human resources)
Three consecutive months in
2004
58 (23.3%) of the 249 cancelled scheduled surgeries represented
costs for the institution.
The cancellations’ direct total cost was R$1,713.66 (average cost
per patient R$29.54).
Materials R$333.05
Sterilization process R$201.22
Medications R$149.77
Human resources R$1,029.62
Human resources costs represented the greatest percentage in
relation to total cost (60.40%).
Average cost per patient
R$ 29.54
29.54 US dollars
(18.4.2017 exchange
rate)
Macario,
2010.
USA
Editorial comment
about costs of
operating room time
“Excluding physician costs, OR administrators may use a ballpark
number such as $15 to $20 per OR minute for a basic surgical
procedure.”
15-20 US dollars/OR
minute
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jha.sciedupress.com Journal of Hospital Administration 2018, Vol. 7, No. 6
Procedure prices
Mean cost prices of operative procedures were collected from
the hospital’s invoicing system for the year 2016 in euros.
The price of a procedure is calculated as mean costs of simi-
lar procedures during one year. There is no profit in the price
as the hospital works as a non-profit institution. The price of
a single operation consists of anesthesia resources, recovery
room, implants, surgeon, medicine, environment (OR + OR
staff), special equipment (e.g., a surgery robot) and specialty
specific equipment. The cost of a cancellation was defined
as resources that were reserved for the scheduled surgery for
a specific patient. The model of calculation was that in case
of a DOS cancellation, those resources could not be used for
other purposes. DOS cancellation costs were calculated from
the total cost of a procedure as follows:
DOS cancellation cost = total cost of a procedure – saved
unused products
Saved unused products = implants + medicine + specialty
specific equipment
DOS cancellation cost includes = anesthesia resources
±
recovery room
±
surgeon
±
environment
±
special equip-
ment
DOS cancellation costs were reported in 13 operative special-
ties in euros in means, total costs, and by cancellation reason
during the nine-month study period. The invoicing system
did not provide the procedure price in 33 cases. Missing data
were replaced by specialty specific means of savings and
costs.
3. RES ULTS
Total costs of cancellations are presented in Table 2. The to-
tal cost of 542 elective surgery cancellations in 13 operative
specialties was 953,374.27 euros in the nine-month study
period, and the saving of material costs was 106,917.33
euros. The mean loss from a single cancelled operation
was 2,459.91 euros, and the mean saving was 174.47 eu-
ros. The highest mean losses were found in cardiac and tho-
racic (4,539.93
C
) and vascular surgery (3,016.82
C
), and
the lowest were found in ophthalmology (1,026.87
C
) and
urology (1,315.58
C
). However, because of the number of
cancellations in ophthalmology, the total loss was one of the
highest (165,326.50
C
) after orthopedics (212,565.65
C
) and
neurosurgery (165,416.39
C
). Mean savings per cancelled
operation were highest in gastrointestinal surgery (409.54
C
),
cardiac and thoracic surgery (399.90
C
), vascular surgery
(338.63
C
), and neurosurgery (313.72
C
). Some specialties
did not achieve any savings, or savings were minor; these
included dental surgery (0.19
C
), plastic surgery (10.78
C
),
and pediatrics (18.36 C).
Table 2. Costs and savings of DOS cancellations (n = 542) by operative specialties, September 1, 2015-May 31, 2016
Medical specialty
Cancellations
Missing data
Cost per
cancellation
Cost per
cancellation, range
Saving per
cancellation
Saving per
cancellation,
range
Total cost of
cancellations
Total saving of
cancellations
(n)
(n)
(%)
(mean €)
(€)
(mean €)
(€)
(€)
(€)
Gastrointestinal
surgery
24
2
7.7
1,945.52
799.22 – 5,738.55
409.54
130.30 – 1,003.79
46,692.38
9,828.96
Pediatrics
17
2
11.8
1,510.54
929.52 – 2,888.52
18.36
0 – 188.04
25,679.12
312.15
Hand surgery
14
1
7.1
1,495.49
998.75 – 2,374.01
113.29
0 – 636.29
20,936.91
1,586.08
Cardiac & thoracic
11
3
25
4,539.93
1,532.25 – 6,679.74
399.90
19.76 – 861.26
50,890.33
4,821.23
Urology
17
-
-
1,315.58
822.23 – 1,724.01
24.42
0 – 182.93
22,364.90
415.08
Vascular surgery
20
3
15
3,016.82
1,829.63 – 5,682.92
338.63
49.48 – 588.42
60,336.41
6,772.51
Neurosurgery
73
2
2.7
2,265.98
1,157.88 – 4,858.70
313.72
0 – 914.43
165,416.39
22,901.64
Gynecology
28
7
25
1,519.92
873.04 – 3,862.10
140.07
0 – 448.72
42,557.89
3,921.91
Ophthalmology
161
7
4.3
1,026.87
459.42 – 2,403.26
188.17
0 – 920.44
165,326.50
30,296.06
Ear, nose and throat
69
1
1.4
1,343.10
690.16 – 5,712.41
74.87
0 – 460.27
92,673.74
5,165.75
Dental surgery
10
1
10
2,459.91
626.80 – 3,064.51
0.19
0 – 0.28
24,599.11
1.86
Orthopedics
88
3
3.4
2,415.52
1,206.18 – 5,363.11
236.21
0 – 936.22
212,565.65
20,786.30
Plastic surgery
10
1
10
2,333.49
1,238.27 – 8,274.29
10.78
0 – 54.56
23,334.94
107.80
Total Hospital
542
33
6.1
2,459.91
459.42 – 8,274.29
174.47
0 – 1,003.79
953,374.27
106,917.33
Published by Sciedu Press 33
jha.sciedupress.com Journal of Hospital Administration 2018, Vol. 7, No. 6
Table 3. Cost of DOS cancellations (n = 542) by reason and operative specialty, September 1, 2015-May 31, 2016
Medical
specialty
Patient did not show up
Resource-related reasons
(no time for operation/rush,
equipment unavailable, a
surgeon unavailable, bed not
available)
Patient unfit for operation
(patient unsuitable for
operation or anesthesia)
No need for operation
Other reasons
(non specific reasons or
administrative mistakes)
Cancellations
Cost
Cancellations
Cost
Cancellations
Cost
Cancellations
Cost
Cancellations
Cost
(n)
(€)
(n)
(€)
(n)
(€)
(n)
(€)
(n)
(€)
Gastrointestinal
surgery
-
0
10
11,849.83
11
31,668.03
2
2,001.66
1
1,172.85
Pediatrics
3
4,398.92
1
1,504.01
8
10,207.53
4
6,695.11
1
2,873.55
Hand surgery
2
3,884.87
-
0
8
11,620.15
4
5,431.90
-
0
Cardiac &
thoracic
-
0
2
8,588.80
7
35,278.25
-
2
7,023.28
Urology
-
0
6
8,659.37
4
4,565.76
4
4,920.33
3
4,219.44
Vascular surgery
-
0
8
20,762.93
7
24,115.60
3
8,489.47
2
6,968.41
Neurosurgery
-
36
79,018.96
17
50,223.27
12
22,291.46
8
13,882.69
Gynecology
1
1,144.26
7
10,316.46
11
17,064.26
6
10,080.27
3
3,952.63
Ophthalmology
9
11,600
41
38,762.45
74
67,681.15
34
46,477.20
3
4,853.22
Ear, nose and
throat
3
3,312.49
12
19,405.58
26
32,368.02
25
33,385.35
3
4,202.31
Dental surgery
1
3,064.51
3
7,621.58
4
8,388.61
-
0
2
5,524.42
Orthopedics
4
10,591.77
48
118,193.52
21
49,808.99
7
173,44.65
8
16,626.72
Plastic surgery
1
8,274.29
1
1,333.77
5
8,423.57
3
5,303.31
-
0
Total Hospital
24
46,271.11
175
326,017.26
203
351,413.19
104
162,420.71
36
71,299.52
Regarding cancellation reasons (see Table 3), the most costly
reason was patients’ unsuitability for the planned operation
(n = 203), causing a total loss of 351,413.19 euros. The
largest shares of this cost were in ophthalmology (67,681.15
C
), neurosurgery (50,223.27
C
) and orthopedics (49,808.99
C
). Resource-related reasons (n = 175) caused the loss of
326,017.26 euros, including the largest losses in orthopedics
(118,193.52
C
) and neurosurgery (79,018.96
C
). In 104
cases, patients were determined not to need the planned oper-
ation, leading to a total loss of 162,420.71 euros for the hospi-
tal; the highest shares in euros were found in ophthalmology
(46,477.20
C
) and ear, nose and throat (33,385.35
C
). During
the study period, there were 24 occasions when the patient
did not show up at the hospital. These cancellations caused
the loss of 46,271.11 euros, and the largest shares were in
ophthalmology (11,600
C
) and orthopedics (10,591.77
C
).
Other unspecified reasons led to a loss of 71,299.52 euros;
the largest shares were in orthopedics (16,626.72
C
) and
neurosurgery (13,882.69 C).
4. DISCUSSION
The aim of this study was to measure the financial cost of
DOS cancellations in a university hospital’s 13 operative
specialties after the hospital implemented an evidence based
structured preoperative protocol.
[9, 31]
According to the re-
sults, DOS cancellations caused a financial loss of nearly a
million euros during the nine-month study period. To the best
of our knowledge, this is the first academic study to measure
the financial costs of surgery cancellations in Finland, and it
supports previous estimates of the financial costs of elective
surgery cancellations.[5,6]
Several factors, such as country and specialty, are recognized
to affect the costs of cancellations.
[13]
The mean cost of a
cancellation was approximately 2,500 euros, which is ap-
proximately half the cost of a cancellation in the US.
[33–35]
By specialty, the cost of a single DOS cancellation was high-
est in cardiac and thoracic and vascular surgery and lowest
in ophthalmology. By reason for cancellation, a major loss
was related to hospital resources and patients’ suitability for
the planned surgery. This finding suggests that a cancellation
rate under 2% may be achieved.
DOS cancellations became less usual among many special-
ties but when total amount of cancellations was calculated in
hospital-level, the result was distorted by the high frequency
of cancellations in ophthalmic surgery. This was due to their
process which was different from other specialties and did
not include a preoperative visit to confirm the need of surgery.
To use their OR resource effectively, they developed a sys-
tem for rapid recruitment of additional patients for each day.
During the study a new reporting system was created to sup-
port each department to further decrease their cancellations.
Unfortunately, our study has no follow-up in this matter.
There are several limitations to this study, and the results are
suggestive. As the data were collected from the hospital’s
invoicing system that is not originally designed for research
34 ISSN 1927-6990 E-ISSN 1927-7008
jha.sciedupress.com Journal of Hospital Administration 2018, Vol. 7, No. 6
purposes. However, the register may be seen as a reliable reg-
ister including high quality data. It provides information that
can be used for study purposes. To strengthen the analysis the
assistance and participation of the hospital account manager
was used. Financial causes of DOS cancellations are calcu-
lated as the mean costs of procedures over a year-long period.
Procedure prices are limited in intraoperative care and do not
include preoperative tests and care or postoperative care and
hospitalization. In some cancellation cases a new patient may
have been operated instead of a cancelled patient, but this
was not considered in this study. Cancellation costs do not in-
clude any compensation paid to patients by the hospital. The
reliability of this study might have been increased by using
supportive data considering OR time used and minute-based
costs,
[13]
as in previous studies.
[32–34]
However, reliable in-
formation about the use of OR time by operative specialty
was not available for research purposes. The financial loss of
DOS cancellations would best be measured in the standard
manner using multiple supportive data sets.
The results of this study may be used to estimate the financial
cost of DOS cancellations to organizations and to compare
financial losses caused by elective surgery cancellations be-
tween different health care providers. Financial costs of DOS
cancellations are a valid outcome measurement when setting
goals and evaluating outcomes in a perioperative setting.
5. CONCLUSIONS
As a conclusion, DOS cancellations cause unnecessary
wastage for health care organizations. Financial aspects
should be followed and evaluated systematically by setting
goals and providing continuing developments for optimizing
health care expenses.
ACKNOWLEDGEMENTS
We would like to acknowledge accounting manager Heini
Koskenvuori, M.Sc. (Econ.), who helped with evaluating the
usefulness of databases and disseminating funds, the North
Savo Hospital District Ministry of Social Affairs and Health,
and Kuopio University Hospital Research Foundation. We
thank the Finnish Foundation for Nursing Education for mak-
ing this research possible through funding.
CON FLI CT S OF INTEREST DISCLOSURE
The authors declare they have no conflicts of interest.
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