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Reducing arthroplasty costs via vendor contracts
D W Johnston1, L A Beaupré, D M Davies
1Department of Surgery, University of Alberta. jhcworth@planet.eon.net
Canadian Journal of Surgery. Journal Canadien De Chirurgie
|December 11, 1999
Summary
Implementing a vendor contract strategy significantly reduced implant costs for hip and knee arthroplasty by leveraging increased volume for decreased pricing. This approach offers a viable cost-saving method for healthcare facilities.
Area of Science:
- Orthopedic Surgery
- Health Economics
- Medical Device Procurement
Background:
- Hip and knee arthroplasty implant costs represent a significant expenditure in orthopedic surgery.
- Previous cost-containment strategies have had variable success in managing these expenses.
Purpose of the Study:
- To evaluate the effectiveness of a vendor-contracting strategy in reducing implant costs for hip and knee arthroplasty.
- To assess the impact of volume-based purchasing agreements on implant pricing.
Main Methods:
- A comparative analysis of implant costs before and after implementing a 2-year vendor contract was conducted.
- Data from 942 hip and knee arthroplasties (1993/94) were compared with 1656 procedures (1996/97).
- The study involved a regional health authority across two acute care hospitals.
Main Results:
- A 40% reduction in primary knee arthroplasty implant cost and an 18% reduction in primary hip arthroplasty implant cost were achieved.
- A volume-based rebate was secured from the vendor, supporting orthopedic research and education.
- A subsequent 3-year contract was established with primary vendors for 80% of the volume.
Conclusions:
- A vendor-contract economic strategy effectively reduced hip and knee arthroplasty implant costs.
- This model is transferable to other institutions seeking cost-reduction methods.
- The strategy supports patient care while facilitating clinical research and education.
