How one hospital gained leverage in orthopedic device negotiations & saw expenditures per implant drop 20%: 5 key notes

Practice Management

A study published in the Journal of Bone and Joint Surgery examined a new process for informing surgeons about their implant choice and realized savings as a result.

In the study, researchers determined the costs of six orthopedic trauma devices from four vendors and graded them as a "green" (preferred vendor); "yellow" (midrange); or "red" (used for patient-specific requirements) and posted the chart outside of the operating room.


The researchers found:


1. After implementing the system, utilization rates changed:


• Red: from 30 percent to 9 percent
• Yellow: 56 percent to 21 percent
• Green: from 14 percent to 70 percent


2. Price negotiations with vendors after the system was implemented showed a 1.1 percent to 22.4 percent drop in cost on average.


3. The expenditure per implant for all implants involved in the study dropped 20 percent.


4. The hospital realized $216,495 annual savings as a result of the new system.


5. The system didn't violate vendor confidentiality clauses and still allowed surgeons to choose their constructs. "Following implementation, hospital implant expenditures decreased as a result of a combination of increased preferred vendor usage by surgeons, as well as increased competition among vendors which resulted in lower overall prices," concluded the study authors.


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