Day-surgery centres · Healthcare
Theatre-minute cost for day-surgery centres, procedure by procedure
A day-surgery centre sells theatre time to surgeons and patients, with no ward to absorb its fixed cost. We cost each procedure from theatre minutes, kits, implants and surgeon and anaesthetist fees. Each list and each surgeon can then be judged on what they contribute.
In one paragraph
Day-surgery and ambulatory surgical centres, usually with two to ten theatres and ₹10–150 crore turnover, serve ophthalmology, ENT, urology, orthopaedics, gastroenterology and general surgery. They have no beds to fall back on. Revenue depends almost entirely on how many procedures the theatres complete in a day, and on which surgeons bring them. The founder or managing director, often a practising surgeon, usually owns the numbers.
Founder or managing director, often a practising surgeon
The economics
How the money moves in this trade
A day-surgery centre's cost base is theatres, recovery bays, sterilisation, anaesthesia and nursing staff, and almost all of it is fixed. The cost of a procedure is therefore theatre time at a rate set by utilisation, plus kits, implants and drugs. Surgeon and anaesthetist fees come on top, paid per case, per session or as a share of billing. Turnaround between cases, late starts and cancellations quietly consume capacity.
Many surgeons bring their own patients and use the centre on a sessional or per-case basis. Some centres are part-owned by the surgeons who operate there. Insurers increasingly cover day-care procedures, which brings package rates and pre-authorisation into what was once a cash business. The commercial arrangements with surgeons and payers decide whether a full theatre list is profitable.
The problem
Where the numbers usually break down
Theatre time has no cost per minute
Theatre cost is reported as a monthly total, so nobody can say what an hour of theatre costs or what an idle slot loses.
Turnaround and cancellations are not measured
Time between cases, late starts and same-day cancellations are known on the floor but not reported, so lost capacity is invisible.
Surgeon arrangements vary without a cost test
Sessional, per-case and revenue-share arrangements are agreed surgeon by surgeon without testing what each leaves the centre.
Procedure kits and implants are not matched to cases
Kits, implants and consumables are issued from stores in bulk, and usage is not reconciled with procedures billed.
Insurer packages are accepted without costing
Day-care package rates from insurers are signed on the basis of competitors' rates rather than the centre's own procedure cost.
What we do
The work, and the result each part produces
Theatre cost per minute
Theatre, recovery, sterilisation, staff and equipment cost divided across actual available theatre time.
Every procedure carries the theatre time it actually used.
Theatre utilisation and lost time
Scheduled, used and lost time by theatre, with turnaround, late starts and cancellations reported by list and surgeon.
Capacity losses are visible and can be managed.
Procedure costing
Theatre time, kits, implants, drugs, anaesthetist and surgeon fees costed for the main procedures.
Each procedure shows its margin under each payer.
Surgeon arrangement testing
Each sessional, per-case or revenue-share arrangement tested against procedure contribution on the surgeon's case mix, and payouts reconciled before release.
Surgeon arrangements are consistent and affordable.
Kit and implant reconciliation
Kits, implants and high-value consumables issued reconciled with procedures billed.
Materials used are materials billed.
Insurer receivables and package testing
Pre-authorisations, claims and deductions tracked by insurer, with package rates compared with procedure cost.
Insured work is priced and collected on evidence.
Where we start
The first steps of an engagement
Theatre register and surgeon terms
We ask for the theatre register with in and out times, list schedules and cancellations, kit and implant issues, surgeon and anaesthetist agreements, and insurer pre-authorisation and claim records.
Cost per theatre minute
Theatre, recovery, sterilisation, staff and equipment cost is divided across actual available theatre time. Scheduled, used and lost time is then reported by theatre and list.
Kits and implants matched to cases
Every kit, implant and high-value consumable issued is matched to a procedure billed. Surgeon payouts are reconciled to billing before release.
Procedure and surgeon contribution
The first report shows contribution by procedure and payer, contribution by surgeon after payouts, and theatre time lost to turnaround, late starts and cancellations.
How it is measured
The reports the work is judged on
Each is recorded as a baseline before the work starts, so later reports have an honest comparison.
- Theatre cost per minute and utilisation, by theatre
- Lost theatre time from turnaround, late starts and cancellations
- Contribution by procedure and payer
- Contribution by surgeon after payouts
- Kits and implants reconciled to procedures
- Insurer receivables and deductions by age
Who it suits
Written for, and not the right fit for
- You need help with centre registration, accreditation or clinical protocols; those sit with your clinicians and the relevant authorities.
- You need the centre's statutory audit or tax-audit report signed — that is the work of an independently engaged CA.
- Day-surgery and ambulatory surgical centres with several theatres and visiting surgeons.
- Surgeon-owned centres needing a clear basis for sessional and per-case charges.
- Centres adding theatres, specialties or a second location.
Services
Services this work draws on
Costing and profitability
What each product, line and customer really contributes.
Explore service ↗Internal controls and risk
Controls sized to your business, documented and actually tested.
Explore service ↗MIS and financial planning
Reporting built around the questions you actually need answered.
Explore service ↗Outsourced accounting
Your books kept current and reconciled, closed to a published calendar.
Explore service ↗Every other service, also available in this trade
Common questions
Questions owners in this trade ask
Our theatre records are on paper. Is that enough to measure utilisation?
Yes. The theatre register usually records in and out times. A few weeks of it is enough for a first view, and it's easy to move to a simple digital log after that.
How should we charge surgeons who bring their own patients?
We can show what a theatre hour costs and what each arrangement leaves the centre. The commercial terms, and any legal drafting, stay with you and your advisers.
Do you handle insurer empanelment?
No. Empanelment and network agreements are between you and the insurer. We work on procedure costing, package testing and receivables.
5th Quadrant performs costing, payout reconciliation, receivables and reporting work. Clinical decisions, clinical establishment registration, accreditation and insurer empanelment are the centre's own responsibility with its clinicians and the relevant authorities. Statutory audit and tax-audit reports are performed by independently engaged licensed professionals. Full detail is on our Professional Scope page.
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