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Related Experiment Videos

Using a business practice model to control product line costs.

Ronald J Farr1, Girard F Senn, Catherine M Whitten

  • 1Avera McKennan Hospital and University Health Center, Sioux Falls, SD, USA. Ron.Farr@McKennan.org

Healthcare Financial Management : Journal of the Healthcare Financial Management Association
|August 25, 2006
PubMed
Summary

Avera McKennan Hospital reversed a decline in its total joint replacement product line, saving $500,000 annually. This was achieved through strategic business model development and enhanced collaboration with orthopedic surgeons.

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Area of Science:

  • Healthcare Management
  • Orthopedic Surgery
  • Supply Chain Optimization

Background:

  • The total joint replacement product line at Avera McKennan Hospital experienced a significant decline.
  • Declining product lines pose a risk to hospital revenue and service offerings.

Purpose of the Study:

  • To identify strategies to reverse the decline in the total joint replacement product line.
  • To achieve annual cost savings of $500,000 through improved product line management.

Main Methods:

  • Conducted a thorough review and analysis of the product line's historical performance.
  • Developed a new business model for the implant supply process.
  • Secured physician buy-in and ensured vendor contract compliance.
  • Fostered a business partnership role with orthopedic surgeons.

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Main Results:

  • Successfully averted the decline in the total joint replacement product line.
  • Achieved annual cost savings of $500,000.
  • Established a sustainable business model for implant supply.

Conclusions:

  • Strategic analysis, business model innovation, and collaborative partnerships are key to revitalizing declining product lines.
  • Effective vendor management and physician engagement are critical for success in orthopedic product line management.