FEATURE ARTICLE Global Business and Organizational Excellence. 2018;37(3):33–42. wileyonlinelibrary.com/journal/joe © 2018 Wiley Periodicals, Inc. 33 DOI: 10.1002/joe.21850 A serious concern throughout the world, the ever-rising cost of healthcare is par- ticularly challenging in resource-strapped emerging economies. A study of the man- agement of expensive operating rooms in a public hospital in a northern region of Malaysia highlights how efective scheduling of operations and a reduction in the number of cancellations can help contain healthcare costs. It also identifes fve categories of disruptions to operating room schedules, pinpoints the underlying root causes, and ofers recommendations on how these problems might be avoided. The fndings are relevant to any nation that faces the twin problems of an increased demand for healthcare services from a rapidly growing elderly population and ris- ing costs of advanced surgical techniques. It also shows how several tactics that typically are associated with manufacturing can be used to address problems in the service sector. 1 | INTRODUCTION Sustainable fnancing is a source of concern for most emerg- ing economies and particularly in Malaysia, where serious fnancial constraints have resulted in budget cuts in all sec- tors, including healthcare. Aiming to become a high-income nation, Malaysia is seeking to achieve a 6% growth rate and a per-capita income of USD 15,000 and to double its current gross domestic product (GDP) by 2020. As in many other middle-income countries, rising health expenditures because of an aging population and new devel- opments in surgery have prompted the Malaysian government to consider a range of options for fnancing healthcare (World Health Organization, 2013). The total healthcare expendi- ture in Malaysia rose from MYR 13,694 (2.9% of GDP) in 1997 to MYR 42,309 (4.5% of GDP) in 2012. This resulted in a large increase in the government’s total expenditure on health, which averaged 7% between 2005 and 2008 and rose to 8.9% over the last decade (Exhibit 1 on page 34). In 2009, 56% of total health expenditure (MYR 17.4b) was made by the government, while private health expendi- ture totaled MYR 13.9b, or 44% of total health expenditure (World Health Organization, 2010). Of this amount, 67% was used for inpatient care, 31% for outpatient care, and 2% on day cases (Malaysia National Health Accounts, 2011). Under the Ninth Malaysia Plan (2006–2010), MYR 52.29b was allocated as an operational budget for healthcare services, and an additional MYR 11.3b as a development budget. This prompted the Malaysian government to look at alternative approaches to funding healthcare, such as the containment of costs and the establishment of a social health insurance scheme (World Health Organization, 2013). It also resulted in the introduction of the National Healthcare Transforma- tional Program in the 11th Malaysia Plan, which incorpo- rated reform in healthcare services, cost containment, and the strengthening of the fnances and organization of the public healthcare system. 2 | HEALTHCARE IN MALAYSIA Malaysia’s public health system is fnanced mainly from gen- eral revenue and taxation by the federal government, while the private health sector is funded directly by consumers or by private health insurance (World Health Organization, 2013). Although the total spending on health stood at 4.4% An examination of operation room management at a Malaysian public hospital Wai Ken Yap | Cheng Ling Tan | Sook Lee Ching