5 ways to reduce supply chain costs

by Shon Wettstein As payment models move from fee-for-service to value-based care, hospitals and health systems work to maintain hospital budgets by reducing spending by 20 to 30 percent across individual departments. To that end, many hospitals realized significant savings is the medical device supply chain--one of a hospital's costliest areas. Supply costs are usually the second largest expense in a hospital after labor--and industry analysts predict they will take the top slot by 2020. Understanding this problem is one thing, but solving it is another. Most surgeons are unaware of their supply costs or how to reduce them through substitution of equally reliable, less expensive alternatives. Changing the status quo is nearly impossible due to limited price transparency and no vehicle for sharing cost information. In other words, there's more to changing behavior and reducing a system's supply costs besides simply capping prices. Intermountain Healthcare, based in Salt Lake City, Utah, recognized this conundrum. Rather than focusing solely on costs, its leaders developed the Surgical Price Reduction Initiative and New Growth (SPRING) program. SPRING facilitates better intracase utilization of supplies by looking across 50 of the highest volume procedures for variation in supplies, length of stay, time in the OR and add-on procedures, such as labs, x-rays, physical therapy and supplies. It aims to reduce procedure costs by providing surgeons with real-time, procedure-bas...
Source: hospital impact - Category: Health Managers Authors: Source Type: blogs