Costs, Charges, and Revenue of Hospital Operating Rooms in California

The operating room (OR) is the most resource-intensive setting in the hospital, making accurate OR financial metrics essential for value-based initiatives and cost-effectiveness analyses. However, prior estimates of OR time have been rendered likely obsolete by the COVID-19 pandemic, sustained inflation, and hospital consolidation, and conflation of 3 financial parameters-costs, charges, and revenue-has led to misapplication of these estimates.

To estimate the cost of 1 minute of OR time in California hospitals, assess trends over time by hospital ownership and teaching status, and provide benchmarks for OR charges and revenue.

This longitudinal cross-sectional study examined California Hospital Annual Disclosure Reports for fiscal years (FYs) 2014 to 2022 from short-term general and specialty care hospitals in California. Data were analyzed from January 24 to March 13, 2026.

The primary outcome was mean costs, charges, and revenue per minute of OR time, stratified by hospital ownership and teaching status. Costs were further divided into direct and indirect components. Descriptive statistics summarized hospital characteristics and financial measures.

The study included 278 hospitals that provided California Hospital Annual Disclosure Reports for FY 2022. Of these, 164 (59.0%) were not-for-profit hospitals, 75 (27.0%) were for-profit hospitals, and 39 (14.0%) were government owned hospitals; 34 (12.2%) were teaching hospitals. The mean (SD) cost of OR time across all hospitals was $57.71/min ($24.09/min), representing a 54% increase from FY 2014 with an annual increase of 5.24% (95% CI, 4.63%-5.82%). Direct costs accounted for 56.6% of total costs ($32.56 of $57.53), with wages and benefits comprising approximately two-thirds of direct costs. The mean (SD) charge was $295.09/min ($148.23/min) and the mean (SD) revenue was $66.31/min ($31.30/min). Government-owned hospitals had the lowest charges, highest costs, and intermediate revenues, illustrating that these 3 measures are not interchangeable.

In this cross-sectional study, the mean cost of OR time in California hospitals was $57.71/min in FY 2022, establishing an updated benchmark for surgical cost analyses. Additionally, benchmarks were established for OR revenue ($66/min) and charges ($295/min). Appropriate use of the different financial metrics along with accurate values is essential for valid cost-effectiveness analyses and value-based surgical care initiatives.