Oct 3, 2019 | Leadership Best Practice

Lean In: Financial Challenges

Although the primary mission of a hospital or healthcare provider is to care for patients, it becomes difficult to do if the business is not financially stable and is not able to maintain a margin, no matter how thin. It is the responsibility of the entire team to look for opportunities to more efficiently utilize resources to support the mission. There is a waste in healthcare that includes but is not limited to, time, energy, supplies, and resources. An efficient and streamlined sterile processing department and an operating room can produce quality outcomes while contributing to the financial health of the organization by eliminating waste. Waste comes in many forms to include duplication of work, unnecessary work, payment for services not required and other inefficiencies. Dollars that aren’t wasted can be spent on supplies, resources, salaries, and capacity building initiatives.

Sterile Processing Leadership

Excessive instrument repair cost When there isn’t a preventive instrument maintenance program in place based on utilization, instruments can be neglected or unnecessarily serviced. Instruments and trays should be inspected and serviced based on the frequency of use or frequency of exposure to harsh elements or processes. It should not be driven by the repair company’s pre-scheduled visit and a need to justify that visit. When hospitals drive the maintenance schedule based on utilization, they decrease costs associated with servicing underused sets. In one Lean case study, the annual cost of replacement instruments was decreased by $100,000 with effective inventory management.

Increased turnover of staff – Inefficient processes are a burden. Sterile processing is a busy, high risk and stressful environment on the best day. When work is wasteful, problematic, or not meaningful, staff are not satisfied and more likely to quit. Every time a trained staff member leaves, the resources used to train that person are wasted, and additional funds are utilized to hire and train new staff if you can find them.

Re-shelving of unused sterile supplies – If surgeon preference cards are not accurate or non-existent, and schedules are not coordinated, confusion can ensue. It is a waste of time, space and expertise to have to sterilize and re-shelve supplies that are pulled for a case and then not used. Sometimes your surgeons will ask for extra supplies, “just in case” because they have had the experience of not having what they have requested in the past, or there are too many unused instruments in a case cart. This creates extra work at the front and back ends unnecessarily. This error and the subsequent delays it causes costs money, time and effort. This situation is a dissatisfier for staff.

Perioperative Leadership

Increased OR downtime due to lack of instrument availability – There are few things that are greater surgeon dissatisfiers than having to wait for a surgery to be scheduled or begin due to instrument requirements. Even worse is having to wait during surgery with a patient under anesthesia for an instrument to either be found or sterilized. It is a waste of time for the entire team, and it is a patient safety issue. Surgeons will find other facilities in which to operate if these events are common or repetitive. There can be significant financial consequences from limited scheduling capacity or outmigration of surgeons.

Increased risk of hospital-acquired infections and associated penalties – Hospital-acquired infections and complications are tied to dollars in Pay for Performance reimbursement models supported by Medicare and commercial insurers. As healthcare continues to transform, more and more money will be linked to these performance metrics. An SPD and the operating room must do everything it can to perform at the highest level and maintain standards that keep patients safe. When that is accomplished, there can be financial awards that benefit the entire organization.

Need for an effective back-up sterile peel pack inventory – During any surgery case scissors and needle holders may not operate correctly. There may be a need for additional clamps, forceps or special retractors. In these instances, a well-positioned and properly stocked sterile peel pack inventory will fill this void eliminating the need to open large sets unnecessarily creating a higher demand on already limited resources.

Wasted resources constrain budgets and the ability to purchase new equipment – Any waste in a department or system that consumes funds that could be spent on other priority items needs to be eliminated. Is there any OR in the country that couldn’t benefit from updating equipment, buying new technology or hiring more staff? Budget money is tight and finite. Avoidance of waste can help shift resources to things that are priorities.

Healthcare Senior Leadership

Dependency on expensive travelers and turnover of well-trained staff As it is true throughout the hospital, travelers and agency staff are expensive. The maintenance of a team of well-trained permanent staff is overall less expensive and more reliable than a rotation of travelers through SPD. A chaotic and stressful work environment encourages additional turnover. When permanent staff is trained and engaged in a process that is focused on quality, efficiency and stakeholder satisfaction, the turnover and need for travelers will decrease. In one case study, a Lean initiative decreased the monthly cost for travelers from $71,104 to $39,744.

Increased use of expensive immediate use steam sterile processing – Urgent steam sterilization is expensive, disruptive to workflow and time-consuming. It is necessary on occasion but should not be used casually nor frequently to provide instruments to the operative field due to bioburden, breaks in sterility, to replace a broken instrument or to provide an instrument that was in use elsewhere due to uncoordinated scheduling. A high-reliability organization will not need to steam sterilize often, thus decreasing costs associated with the procedure.

Value-based penalties due to hospital-acquired infections High functioning sterile processing departments have a lower rate of surgical site infections which can be tied to both penalties and bonuses monitored through pay for performance programs. Quality sterile processing departments can impact these reimbursements, as well as the data and grades that are publicly reported that will most certainly be more of a focus in the future as full transparency becomes the norm.

Shrinking market share – Competition for surgeons and surgery is becoming more intense. Surgeons will choose operating rooms that meet their needs, which includes having the right instruments that are sterile and safe for their patients when they need them. If your sterile processing department has defects and errors in their processing that cannot be resolved, surgeons will go elsewhere. Insurance companies will encourage their patients to go elsewhere when the data becomes public and if it reflects an ongoing challenge.

Malpractice liability – Instrument failure and instruments with bioburden increase the organization’s vulnerability and the risk that it will incur legal liability. Poorly maintained instruments can contribute to patient harm, including those events where small pieces of instruments may break off and stay embedded in the patient. The risk of litigation over sterilization errors is also potentially high. These SPD error cases can result in legal action which can put the hospital at significant monetary risk. As a recent example, a hospital in Colorado was sued for allegedly causing infections that were acquired due to breaches in surgical instrument sterilization procedures.

[1] See

[2] See….pdfCenters for Disease Control and Prevention.

[3] See guidelines/disinfection/sterilization/other-methods.html#anchor_1554397475

[4] American Lung Association.

[5] Evan Goulet, PhD, April 2015, Medical Device and Diagnostic Industry. See

[6] PLoS One. 2015 Jun 22. See

[7] New Jersey Department of Health. See