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Single Price/Case Price Purchasing in orthopaedic surgery: experience at the Lahey Clinic
Insights
Hospitals can cut orthopaedic surgery costs by implementing a Single Price/Case Price Purchasing Program for implants and supplies. This initiative successfully reduced expenses for hip, knee, and shoulder arthroplasty procedures.
Area of Science:
- Orthopaedic Surgery
- Healthcare Management
- Supply Chain Optimization
Background:
- Rising hospital expenses and stagnant revenues challenge orthopaedic operations.
- Operating room supply costs significantly impact overall procedure expenses.
- Need for innovative cost-reduction strategies in orthopaedic surgery.
Purpose of the Study:
- To evaluate the effectiveness of a Single Price/Case Price Purchasing Program.
- To reduce the cost of orthopaedic implants and supplies.
- To improve hospital financial performance in orthopaedic departments.
Main Methods:
- Implemented a competitive-bid request for proposal for orthopaedic vendors.
- Established a Single Price/Case Price Purchasing Program for specific orthopaedic products.
- Surgeons evaluated vendor proposals and made final product selections.
Main Results:
- Significant cost reductions achieved for various orthopaedic implants and supplies.
- Cost savings ranged from 23% for knee implants to 45% for arthroscopic shavers and interference screws.
- Program demonstrated success in lowering operating room supply costs.
Conclusions:
- The Single Price/Case Price Purchasing Program effectively reduced orthopaedic operation costs.
- This strategy is crucial for hospitals facing decreasing revenues per service unit.
- Optimizing supply chain purchasing can enhance financial viability in healthcare.
Background:
Hospital revenues for orthopaedic operations are not keeping pace with inflation or with rising hospital expenses. In an attempt to reduce the hospital cost of orthopaedic operations by reducing the cost of operating-room supplies, we developed a Single Price/Case Price Purchasing Program for implants used in total hip arthroplasty, total knee arthroplasty, and total shoulder arthroplasty as well as for arthroscopic shavers and burrs, interference screws, and bone-suture anchors.
Methods:
The Lahey Clinic asked orthopaedic vendors to supply all instruments, implants, and disposable items related to these selected products for one single price per unit or case. For example, a single price for total hip arthroplasty implants included instruments, acetabular cups, acetabular liners, acetabular screws, femoral stems, femoral heads, and stem centralizers, if required. The hospital implemented the Single Price/ Case Price Purchasing Program with a competitive-bid request for proposal. Surgeons evaluated the responses to the bidding process, and they made final decisions on product selection.
Results:
The Single Price/Case Price Purchasing Program at the Lahey Clinic was successful in reducing the cost of orthopaedic implants and supplies. In the present article, we could not disclose the specific prices that we agreed to pay our vendors. The specific cost reductions were 32 percent for hip implants with a change of vendor, 23 percent for knee implants without a change of vendor, 25 percent for shoulder implants with a change of vendor, 45 percent for arthroscopic shavers and burrs without a change of vendor, 45 percent for interference screws without a change of vendor, and 23 percent for bone-suture anchors without a change of vendor.
Conclusions:
The Single Price/Case Price Purchasing Program at the Lahey Clinic allowed the hospital to reduce its cost of orthopaedic operations by lowering the cost of operating-room supplies. This cost reduction is important in a health-care economy in which hospital revenues per unit of service or care are decreasing.
