Software Calculates Real Cost of Care

By Katie Wike, contributing writer

A computer program developed by University of Utah Healthcare is able to identify the cost of more than 200 million entries including drugs, labor, and medical services.

A team from University of Utah Health Care, led by Dr. Vivian Lee, has created software capable of determining what each aspect of a hospital stay costs. The New York Times reports Lee came up with the idea for the computer program several years ago. At that time, staff could not put a number on what a minute in an M.R.I. machine or an hour in the operating room costs.

The program now has more than 200 million lines which estimate the cost of drugs, labor, and medical services. According to iHealth Beat, the program estimates the cost of care per minute in:

• the emergency department is 82 cents
• surgical intensive care is $1.43
• orthopedic surgery is $12

They began by calculating the cost of supplies such as bandages, sutures, and medications and then made the connection to individual patients. “Let’s say I need a hip replacement,” said Dr. Robert C. Pendleton, Utah’s chief quality officer. “Well, how many bandages did you use for me, and how many did you use for the guy in the bed next to me and the lady in the next room who also had hip replacements?

“Then you can start to say, ‘Well, wait a minute, patients who have their hips replaced by Dr. Jones are using twice as many bandages. Why is that?’”

Then, the team added in labor costs using a stopwatch to time how long each staff member spends on each procedure and with each patient. The cost of lab tests turned out to be $10 to $20 each; however the sheer volume of these tests led to a price tag of more than $2 million per year. After requiring residents to justify tests, the total cost dropped $200,000 a year.

Overall, UUHC has decreased its costs by an average of 0.5 percent a year. Meanwhile, costs at other academic medical systems in the region have climbed by an average of 2.9 percent annually.