It is estimated that 30% of healthcare costs are lost to waste in the system. These costs get passed on to the insurer and ultimately the patients. With healthcare bills being the leading cause of personal bankruptcies in the country (60%) that 30% is the difference between solvency and destitution for a lot of people. This is a compelling moral argument to wring all waste out of the system as quickly as possible. That moral argument is even stronger when one considers that poverty is the greatest threat/risk to one’s health.

So, what if I told you that there is a segment of healthcare spending that accounts for $165 billion/year and we could eliminate the waste in that space ($49 Billion) in the next ten years. That we have a very sound grasp of the root causes of that waste, that we have all the technology to solve it.

That segment is sterile processing or the cleaning and sterilization of surgical instruments and medical equipment. And most of us are completely unaware of this critical pillar in surgical services unless something goes terribly wrong and a lawsuit ensues.

Sterile processing employees work in windowless rooms typically in the basement of hospitals, the rooms are hot, they have to wear personal protective equipment which makes it hotter. They are frequently injured by the errant sharp instrument or scalpel blade left on the knife handle. Their wages are miserable ($15-$22/hour) meaning that many live in poverty in major metropolitan areas. They are relentlessly pushed by clinicians to rapidly turnover instruments knowing that they are sacrificing safety and quality. They are verbally abused when they can’t meet these demands and to most people in the hospital, they are invisible. Yet, the entire economic engine of the hospital hinges on their performance. And under these brutal conditions they somehow perform this critical task at a very high level in an environment that can best be characterized as a pre-Henry Ford assembly line. Everyone one of them that I have met is purpose driven in knowing that their work will touch multiple patients in a day. This is the one reason they do what they do and hospitals should be kissing the ground they walk on.

But I digress.

This really is an argument about economics and waste because in this agency driven world of western capitalism, large, impersonal organizations really do not care about these people unless it affects their bottom line. So, let me begin by telling you that every hospital is losing hundreds of thousands to tens of millions of dollars a year because they ignore these people.

We calculated how much waste we have at 2 of our 7 hospitals in sterile processing. This came out to $978/case and we perform 21,000 cases/year. These are big numbers and to get them I spent a good month interviewing people, cleaning instruments, building pans of instruments for specific cases and this is what I found:

1. Employee turnover accounts for 8.5% of waste because it costs $90,000 to onboard a new employee whom you are going to pay $32,000 for their first year. In the meantime, you are going to pay a company $92,000 for a traveler to fill than spot. If I just gave all my employees a $10/hour raise to eliminate turnover it would cost me $1,400,000/year as opposed to the 1,544,000/year it cost me now in turnover. This is a 10% ROI guaranteed/year. This is also the same percent guaranteed return that persuaded Elie Wiesel and Steven Spielberg to invest with Bernie Madoff. So, pay these people enough so that they do not worry about money and they stick around.

2. Reprocessing of unused instrument accounts for 34% of the waste. Typically 75% of surgical instruments in a pan go unused. At our institution, the cost to reprocess a single instrument is $0.71. Multiply that 60,000 instruments/day and we are hemorrhaging $32,000/day in direct costs. There is a huge need for informatics to analyze surgeons’ utilization patterns in order to build surgical pans with fewer instruments. Who is going to do that work? Who is going to interact with the surgical team to utilize that information to continually refine these pans? Who is going to own that process? The obvious choice is the sterile processing technician. This would have the added benefit of bringing these technicians out of the dark, hot basements into the light where there are engaging and integrating with surgical teams to solve this problem. Of course this is a complete redesign of their job from invisible line worker to visible critical team member with mastery and autonomy to solve this problem. The upstream effect of this approach is that it would further stabilize the workforce by making it a much more attractive job.

3. Delays in the operating room are the other big ticket item. Delays happen for two major reasons: 1) the correct instrument is unavailable or 2) a pan of sterile surgical instruments has been opened, placed on the back table in the operating room with other sterile opened pans. It is then recognized that one of the instruments in that pan is contaminated. Now the whole sterile set-up needs to be taken down and re-set up with new sterile pans. Delays like these waste valuable minutes of operating room capacity ($153/minute) and account for 53% of the total waste. One can see how tracking surgeon utilization patterns with informatics and then employing predicative analytics to plan out expected utilization could go a long way in reducing delays. But you can’t get there without first stabilizing and engaging the work-force and reducing the numbers of unused instruments in the pans.

Ninety-seven percent of the waste falls into these three categories. When you march out these numbers for the 51 million surgical cases that are performed in this country per year, that $978/case of waste becomes $49 billion nationally. What is astonishing is that many hospitals are living on a razor thin margin and are unaware of the opportunities to improve this space and improve their bottom line.

Finally, a word about what will not work in solving this problem: taking the human being out of it.

I recently walked the former Dean of Engineering, Manufacturing and Robotics from our state’s top technical college through our SPD space. This is a woman who has seen the insides of Wolff and Jon Deere as well as numerous other state-of-the-art manufacturing facilities in Wisconsin. What she told me validates the statement above: we will not have a robot in our lifetimes that can replace a human being in doing this work, because the work is simply too complex.