Banner Health Case Studies

Two ways a value-focused surgical task force saved millions while improving patient care

By Tom Sanders

Reducing costs while raising the standard of care—it’s the steep challenge health systems face every day when it comes to surgery. With quality as the top priority, the old idea of asking surgeons to “do more with less” has yielded to the more sensible goal of improving the health system to make work easier for surgeons and staff, beginning with gathering good data and communicating up front with physicians. The goal is not to dictate to physicians or hospital facilities, but rather to offer vetted opportunities.

When leaders at Banner Health wanted to improve patient care and costs across the board, they envisioned a small and dedicated team with diverse specialties to take on the challenge. Based in Phoenix, Arizona, Banner Health operates 30 hospitals, including three academic medical centers and related health services and entities in six states. In 2018, Banner brought together a data analyst, nurse communicator, OR specialist, and supply chain contracts lead to form the Surgical and Procedural Value and Alignment Program (SPVAP). With help and direction from the Banner Health physician lead and the customer care division, this team evaluates high-volume surgeries across Banner hospitals from different standpoints, recommends changes, gathers buy-in, and guides implementation. In a little more than three years, SPVAP has successfully taken on tough challenges and delivered millions in documented savings—all while helping surgeons improve the level of patient care.

Purchasing holmium lasers saved $1 million, improved outcomes

SPVAP began its mission with a list of surgical procedures where high spend and high utilization variability might be addressable. One notable expenditure was the high cost of surgical laser rentals at 17 Banner hospitals for common urology procedures such as treatment of kidney stones and enlarged prostates. Third-party rental of holmium lasers historically accounted for about 60% of the total laser rental spend ($2 million per year). The 10 hospitals with the highest rental use were performing more than 4,000 cases a year, which accounted for around 95% of that $2 million. In addition to standard rental fees, hospitals were incurring extra charges for technician wait fees and for after-hours cases. Banner determined it could save money by purchasing holmium lasers for those 10 hospitals rather than renting them.

Choosing the right lasers. Selecting the right lasers for purchase was an essential part of this process, one for which SPVAP relied on important feedback from Dr. Joel Funk, chief of surgical services and the director of urology at Banner–University Medical Center South in Tucson. Dr. Funk championed a holmium laser with MOSES technology, which he explained would satisfy all holmium users in urology as well as permit them to perform the gold-standard procedure for enlarged prostates called holmium laser enucleation of the prostate (HoLEP). HoLEP is a less invasive alternative to open prostatectomy; standardizing the laser technology across hospitals could also make less-invasive surgery the new standard of care.

Gathering feedback and buy-in. It would be a challenge to ask surgeons to change their rental patterns and commit to using a new laser, and the team did not rush the process. SPVAP presented data on the laser and its clinical outcomes during personal visits with perioperative teams and urologists, bringing in manufacturer representatives to help. Surgeons gained better understanding that by using the new lasers, they could deliver the level of care their patients deserved. During an 18-month period, SPVAP performed multiple tasks: verifying laser standards with the Banner biomedical team, having phone conferences with perioperative teams to answer concerns and questions, pulling data from around the system, and asking CFOs if they would run the idea of a high-ROI corporate purchase up the executive finance flagpole.

Implementation. Banner purchased the new lasers. The manufacturer worked closely with perioperative teams and physicians to provide clinical training and implementation. The system completed the rollout in 2018.

Cost savings and ROI. In the first year, surgeons performed 2,800 procedures with the new lasers, preventing 2,800 calls to the rental service provider and saving Banner more than $1 million. The 10 holmium lasers paid for themselves in the first 18 months. Facilities also avoided some green light laser rentals in HoLEP surgery cases, which previously accounted for about 20% of rental costs.

In addition to saving $1 million annually in rental fees, Banner has noted other savings not counted toward that total. In surveys, surgeons estimate that kidney stone surgery case times with the new lasers are 30%–50% shorter. That means surgeons can meet the goal of keeping patients under anesthesia for less time, which is positively associated with better clinical outcomes, as well as reducing anesthesia costs and scheduling more cases per week. Banner Health is also saving on soft costs for stone surgeries; for example, it is using less basket retrieval supplies (because stones are dusted more efficiently) and doing fewer percutaneous stone removals.

Efficiencies and future plans. Standardizing the lasers used in 10 hospitals has allowed Banner to streamline laser fiber purchases, further improving economy. Scheduling surgery is also more efficient without the multiple waiting times associated with rentals.

In the future, other specialists such as thoracic and ENT surgeons may begin using the new lasers as well, providing some economies with the shared resource. To further improve urology care, Dr. Funk has offered to teach other urologists to perform HoLEP with the new lasers, which would increase patients’ access to this advanced, minimally invasive procedure.

A robust laparoscopic endomechanical market share idea saved $3.2 million

Early on, the SPVAP team also identified significant variability in surgical supply costs for the most common laparoscopic procedures performed at Banner. Appendectomies, cholecystectomies, and hysterectomies accounted for the majority of laparoscopic cases. However, the cost of a given procedure was erratic, both between different hospitals and between physicians in a single hospital. For example, supply costs for appendectomies varied by as much as 50%.

There were several reasons for the inconsistencies. First, there was no standardization of physician preference cards. Supply contracts were not standardized either, which led to hospitals using several vendors. In this case, pricing was suboptimal and inventory processing was inefficient. There were IT challenges as well, with two separate teams entering supply costs and charges into two different databases. Free-text entry made it extremely difficult to tell what supplies each surgeon was actually using and to perform follow-up reporting.

Getting accurate data. SPVAP began by standardizing physician preference cards with help from an IT contractor and input from high-volume surgeons. This provided a clearer picture of surgeons’ supply usage.

Ensuring surgeons were on board. The team talked to surgeons and confirmed that they would be open to recommendations on reducing variability and creating standardization. Standardization can be unpopular when it removes surgeons’ supply options, but they tend to get on board when they understand it will not negatively affect patient care.

Implementing a standardized approach. Once the team made those recommendations and the surgeons accepted, Banner was able to offer a higher market share opportunity to its three most popular endomechanical suppliers and get one supplier to agree to reduced pricing. Moving forward, SPVAP is using a data analytics platform to aid surgeons in supply selection by making supply costs transparent.

Significant cost savings and surgeon satisfaction. After 15 months, surgical supply costs for laparoscopic surgery were down $3.2 million, easily recouping the investment in data collection and supply chain standardization. SPVAP encouraged physician input throughout the process, and there were minimal objections to the vendor limitations. Surgeons continue to use the supplies they want, and there are avenues available to meet unique needs in complex surgical cases to ensure that all patients continue to receive the best care.

New projects ahead

Building on the success of these projects and others in the first few years, the SPVAP team is working on new challenges in surgical robotics and continuing with standardization in orthopedic surgery, spine, biologics, and other areas. It’s been rewarding to see how changes have not only reduced costs, but also introduced efficiencies that free up people’s time to focus on their most important work at Banner Health: making healthcare easier and patients’ lives better.


Owned vs. Rental Lasers

  • 10-facility project
  • 2,800 cases performed in first 12 months on owned (better) lasers
  • Thousands of outcome improvements
  • More than $1 million in annual cost savings
  • Thousands of patients utilizing reduced anesthesia
  • Laser fiber standardization
  • Reduced physician case times
  • Fewer outside techs in hospital/operating rooms
  • High excellence, high ROI

Tom Sanders is the contracts senior administrator for the Surgical and Procedural Value and Alignment Program (SPVAP) at Banner Health in Phoenix.