Reducing costs and preserving physician choice: creating a partnership that works

The partnership between the medical staff, administration and materials management achieved its goals of cost reduction and preservation of physician choice. They were successfully achieved because a number of things occurred: Vendors reduced the cost of every device sold to the hospital; physicians moved their marketshare by choice in the direction of the preferred list; physicians supported the process and participated actively in the cost-reduction. It was clear that market competition worked very favorably in the hospital's effort to achieve its goals. Saint Vincent Hospital also learned that a number of hospitals who received its blind survey results were also able to impact positively on their own cost-savings efforts--an additional, if unexpected, benefit. This first step toward cooperative cost reduction was indeed a success.