Savings Beyond Price™
Innovative Supply Savings and Quality Solutions That Work
by Strategic Value Analysis® in Healthcare
Did You Know...?
That Value Analysis Was Developed Back In the 1940's After World War II as a Way to Find Lower Cost but Higher Quality Alternative products and methods. This was Due to the Lack of Material Resources At The End of The War.
Savings Beyond Price -Weekly eNewsletter - August 4, 2010
Robert T. Yokl
President & Chief Value Strategist
The Verdict is in on Implants
Greetings,
For many years it was a little known secret on how a hospital could reduce its cost, utilization and value mismatches of its implantable devices (pacemakers, defibrillators, stents, orthopedic, spinal, etc.), but now the verdict is in from numerous industry-wide studies; it’s much easier than you might think!
The secret is now in the public domain and readily accessible to any hospital who wants to tackle their high-cost implant categories of purchase. All it takes is a willingness to do so and adherence to the following six-step accountability process to lower your implant cost by as much as 28%:
1. Recruit & Engage Champions: Without a strong and engaged physician and executive champions (willing to actively participate and lead, guide and resolve issues as they arise) your implant project won’t get off the ground. So select your champions carefully, before you get started on this journey.
2. Establish Implant Teams: Now that you have your champions in place, you will need to select customers, stakeholders and experts from each surgical discipline you have targeted to represent their departments on your implant teams. The one caveat I have for you is not to miss any key individuals that have influence over your implant purchasing decisions. By asking you current team members, “Have we missed anyone that should be on our team”, you usually can avoid this awkwardness from happening.
3. Benchmark for Awareness: In order for you to know with certainty what your hospitals standing is against your peers, you will need to benchmark your implant cost and utilization to determine your targets of opportunity. This exercise will show you where your prices are too high and if your surgeons are frequently implanting high-end devices that aren’t medically indicated. This information will be invaluable to you as you move forward with your investigation.
4. Promote Self Correction: Once your surgeons see the results of your benchmarking exercise and then they realize that their practices are out of step with their peers, they will, in most cases, self correct to conform to their peers. This is because no surgeon wants to be out of step with his peers for fear of criticism and disapproval. It’s human nature!
5. Partner with your Suppliers: Changes at this point in their studies will be required at most hospitals in their implant cost and product mix in order to bring their implant cost into line with peers. It is, therefore, crucial that you partner with your implant suppliers to encourage them by bidding and negotiation to lower their cost and to provide the right product at the right time if they are to keep your business.
6. Control the Outcomes: Your job isn’t ended until you set up a mechanism for on-going monitoring of your implant cost and utilization to ensure that your implant cost is at the lowest acceptable limits consistent with quality outcomes. It is easy for your surgeons to fall back to their old costly habits.
Industry studies have shown that there is significant variation between surgeons doing implants. A manufacturer’s representative presence during procedures heavily impacts a surgeon’s implant selection according to the studies, and that most surgeons are not aware of the prices of the devices they are implanting.
These, among other findings of recent industry studies, should make it obvious to you that if you haven’t attacked your hospital’s implant cost, now is the time to do so before your reimbursement for your implantable devices shrinks even further. The six-step accountability processes I have outlined above will take you a long way toward meeting this goal. To repeat, all it takes is the willingness to do so!
Your Partner In Savings Beyond Price™,
Robert T Yokl
Chief Value Strategist
Strategic Value Analysis® In Healthcare
1-800-220-4274
P.S. To give you even more insight into how to benchmark your implantables, you might want to read my article, Supply Chain Benchmarks Metrics Matter” from our library of 400+ articles.
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