Surgeon- and Hospital-Level Contributions to Surgical Supply Cost Variation in an Integrated Health System

BACKGROUND: Direct surgical supply costs are a modifiable component of operating room spending, but it is unclear whether variation reflects reproducible hospital- and surgeon-level practice patterns and whether stewardship opportunity is broadly distributed or concentrated. STUDY DESIGN: Retrospective observational study of 298,723 operative encounters from April 1, 2019, to March 31, 2025, across 15 hospitals in a single integrated health system. Hierarchical mixed-effects linear regression modeled log supply cost per case with random intercepts for hospitals and surgeons nested within hospitals, adjusting for CPT3 procedural family, calendar year, COVID-era indicator, and, in a complete-case subset, operative duration. Modeled excess cost benchmarked adjusted supply costs to internally observed top-quartile performance within each CPT3 family. RESULTS: In the baseline model (n = 298,723), hospital-level factors accounted for 35.4% and surgeon-within-hospital factors for 32.7% of total variance (cumulative intraclass correlation coefficient 0.681). After operative time adjustment (n = 150,461), hospital variance was 38.1% and surgeon-within-hospital variance was 26.9% (cumulative intraclass correlation coefficient 0.650). Benchmarking corresponded to a 20% to 25% reduction in mean supply cost per case, with approximately 62% persisting after time adjustment. Fewer than 15% of CPT3 families accounted for more than half of modeled opportunity, and the top 5% of surgeons accounted for 56.1% of modeled excess cost. Higher adjusted supply costs were not consistently associated with 30-day readmission (adjusted odds ratio per 1-SD increase, 1.03; 95% CI 0.97 to 1.09). CONCLUSIONS: Surgical supply cost variation was reproducible, concentrated, and only partly explained by operative duration. These findings support targeted supply stewardship focused on high-impact procedure families and surgeons.