Intermountain Healthcare’s Supply Chain and Musculoskeletal Clinical Program teamed with surgeons last year to help reduce $3.6 million on supply expenses that are intended to help lower healthcare costs.
While the reduced cost may save patients money up front, the overall goal is that savings can be passed on to patients through lower premiums and reduced prices in other areas of medicine.
“Some of the prices we negotiated were 40 percent lower than our previous prices,” said Casey Leavitt, executive clinical director of the Intermountain Musculoskeletal Clinical Program. “For example, if a patient with a fracture uses one of our on-contract lower-cost devices, that could mean a substantial savings to that patient.”
Leaders of Intermountain’s Musculoskeletal Clinical Program and Intermountain Supply Chain said one of the biggest keys to the success of these price reductions, were getting surgeons involved in the process.
“Knowing that the savings would be going back to patients really helped motivate the surgeons to participate,” said Nate Momberger, MD, associate medical director for total joint replacement for Intermountain and orthopedic surgeon. “We want to help our patients save money, so adding that financial incentive is a big motivator.”
The three specific tactics physicians chose to help reduce costs:
1. Reduce the number of suppliers of bone cement.
2. Negotiate price reductions with implant suppliers.
3. Ask each physician to reduce their individual supply cost per case by a specific dollar amount based on how they compared to peers.
Leavitt said that while similar efforts to reduce costs in the past were met with limited success. Involving physicians in the process and asking them to help make decisions, made the difference.
“We asked the surgeons that if a supplier isn’t willing to meet our capped price, are they willing to back us up and tell the supplier they’re out of the system, and they said absolutely,” said Leavitt.
“We even had surgeons calling reps and suppliers to say, “Hey, we’re serious. If you don’t come to the table with this discount and everyone else does, I won’t be able to use your products anymore.”
Surgeons say once the numbers were laid out in front of them the decision became easy. Being able to see the cost comparison of materials all at once gave them the information needed to make the best choices for procedures.
“We always want to use materials that give the best health outcomes, but when we can get them at a lower cost then we’re truly giving our patients value-based care,” said Dr. Momberger.
As cost becomes a bigger factor in how patients choose healthcare services, Intermountain understands keeping the price of supplies in check is vital. Value-based care is a major focus of Intermountain in every aspect of the services it provides.
Leaders in Intermountain’s Musculoskeletal Clinical Program are now trying similar cost-cutting methods for total shoulder replacements. They’ve already surpassed their 2019 savings goal and are now looking at implementing the program for other procedures.
Intermountain Healthcare is a Utah-based not-for-profit system of 24 hospitals, 160 clinics, a Medical Group with some 2,300 employed physicians and advanced care practitioners, a health insurance company called SelectHealth, and other health services. Intermountain is widely recognized as a leader in transforming healthcare through evidence-based best practices, high quality, and sustainable costs.