HA 695 Unit 7 executive summary example

Memorandum

To: Vice President, Perioperative Services; Chief Financial Officer

From: Administrative Fellow, Perioperative Services

Date: February 26, 2026

Re: Recommendation to adopt the operating room supply waste program

Recommendation

Approve a six-month program to reduce disposable supplies opened and thrown away unused in the main operating room by one-third, from $182 to $121 per case, saving about $543,000 a year at full effect, at a one-time cost of $15,415 and a recurring cost of $22,572 a year. Waste of this kind is common in operating rooms; observed studies elsewhere have found opened-but-unused supplies making up more than a tenth of supply cost in some specialties (Zygourakis et al., 2017b). The program starts with preference card cleanup and adds a hold list and surgeon cost feedback only if the first stage works safely.

The Problem

In an October 2025 audit of 120 cases, the operating room opened and discarded unused an average of $182 of disposable supplies per case, 11.8% of disposable supply spending, about $1.62 million a year at 8,900 cases. The waste is concentrated: orthopedic and spine cases produce 62% of it, and 12 surgeons produce 61%, so a small number of conversations can move most of the total. Staff open every item on the surgeon's preference card before the patient enters the room, to avoid delays, and 38% of the hospital's 1,412 active cards have not been reviewed in more than two years; 214 belong to surgeons who no longer operate here.

What Is Proposed

Months 1 to 3: the nurse educator reviews about 80 cards with the 12 highest-waste surgeons, and information systems removes the 214 inactive cards. Month 3: item costs appear on every card, and each surgeon begins receiving a private monthly scorecard comparing their waste with their own baseline. Month 4: about 15 high-cost items, excluding anything needed instantly in an emergency, are kept in the room unopened until requested, tested first in two orthopedic rooms. Month 5: the hold list extends to all rooms only if no held item took more than two minutes to reach the field.

The approach is supported by published studies in which standardizing one procedure's card brought per-case supply spending down by about a fifth without lengthening operations (Avansino et al., 2013) and cost feedback to surgeons reduced supply spending by about a tenth (Zygourakis et al., 2017a).

Cost and Return

One-time costs, $15,415: card review and revision time ($6,640), hold bins and labels ($2,700), staff training ($2,475), and cost display and scorecard build ($3,600). Recurring costs, $22,572 a year: part-time supply analyst for scorecards and the hold list ($17,472), annual card review ($2,900) and quarterly waste audits ($2,200). Expected net savings: about $288,000 in the first year, as the later stages start in month four, and about $520,000 a year after that. Savings appear as reduced supply purchasing; a few items are under group purchasing commitments, which lowers spending but not unit prices.

Safeguards and How You Will Know

Waste per case will be re-audited by the same method at months 3, 6 and 12. Every retrieval of a held item will be timed, and supply-related delays and safety events will be tracked monthly. Decision rules are set in advance: the hold list stops at once for any item that reaches the field more than two minutes after a patient needs it, and at month 6 the program is adopted if waste is $121 or less with no safety concern, adapted between $122 and $150, and reduced to card cleanup alone above $150. You will receive a two-page report at months 3, 6 and 12.

What Is Asked of You

Approval of the one-time and recurring costs above; sponsorship of the three information systems requests, which are otherwise in a three-week queue; and a joint message with the chair of surgery to surgeons in orthopedics and spine inviting them to the card reviews.

Revision Note

This summary was revised after review by the two sponsors, the chair of surgery, the perioperative nurse manager and the capstone faculty reviewer.

The chief financial officer asked whether the savings were real cash. The cost section now says that savings appear as reduced purchasing and notes the effect of group purchasing commitments.

The chair of surgery objected to an earlier draft's plan to share a ranked list of surgeons at the surgical services committee. Scorecards are now private and compare each surgeon first with their own baseline; the ranking was removed.

The nurse manager asked that emergency items be excluded from the hold list by rule rather than by judgment. The proposal now says so explicitly, and the list will be reviewed with nursing before the test.

The faculty reviewer found that earlier drafts gave annual waste as both $1.6 million and $1.62 million and the gap as both $540,000 and $543,000. All figures now match the current state analysis and the business case exactly.

References

Avansino, J. R., Goldin, A. B., Risley, R., Waldhausen, J. H. T., & Sawin, R. S. (2013). Standardization of operative equipment reduces cost. Journal of Pediatric Surgery, 48(9), 1843-1849. https://doi.org/10.1016/j.jpedsurg.2012.11.045

Zygourakis, C. C., Valencia, V., Moriates, C., Boscardin, C. K., Catschegn, S., Rajkomar, A., Bozic, K. J., Soo Hoo, K., Goldberg, A. N., Pitts, L., Lawton, M. T., Dudley, R. A., & Gonzales, R. (2017a). Association between surgeon scorecard use and operating room costs. JAMA Surgery, 152(3), 284-291. https://doi.org/10.1001/jamasurg.2016.4674

Zygourakis, C. C., Yoon, S., Valencia, V., Boscardin, C., Moriates, C., Gonzales, R., & Lawton, M. T. (2017b). Operating room waste: Disposable supply utilization in neurosurgical procedures. Journal of Neurosurgery, 126(2), 620-625. https://doi.org/10.3171/2016.2.JNS152442