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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
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.
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.
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.
