Identifying potential savings for physician preference items

As COVID-19 prompted hospitals across the country to suspend routine care and postpone elective surgeries, leaders at Rush examined how they could reduce costs.

Luis Forero, director of strategic sourcing and procurement at Rush University Medical Center, looked to Vizient analytics in his request to reduce the hospital’s shoulder replacement spend and found a unique source of savings, physician preference items, or PPI, used when performing shoulder replacement surgeries.

After seeing the data, Forero knew Rush’s procedural costs were high and that the opportunity was too big to ignore.

First, Rush’s operational excellence committee or executive supply chain council needed to agree with his findings. Before this step, Forero spoke with the charge nurse on the orthopedic surgery floor to validate that his findings matched her experienced on a daily basis with shoulder replacement surgeries.

With buy-in from the top and validation from those on the surgical floor, Forero was to establish a clinical partnership with the physicians by approaching Rush’s chief of orthopedic surgery and top three orthopedic surgeons.

Forero presented his data, highlighting the wide variation in procedural costs.

$ 800000

savings to Rush from renegotiating the process of artificial shoulder joints
with suppliers

21%

Reduction in Rush’s shoulder replacement spend in less than one year using the following Vizient tools to reduce shoulder replacement spend:

  • Procedural Analytics provides internal cost, utilization and clinical data
  • Savings Actualyzer provides external market data and peer benchmarks
  • Advisory Solutions uses the external and internal data to construct an objective, data-driven strategy to reduce costs and improve clinical outcomes
  • Aptitude platform runs the RFP process, performs proposal analytics, and provides prenegotiated terms and conditions
Medical experts

 

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The secret to generating annual savings

Rush personnel approached the supplier of the most expensive devices. After talking with the chief of orthopedic surgery, the supplier reduced the price to realize a total of $800,000 in savings:

  • Using financial data to gain executive buy-in and support
  • Using clinical data to get physician buy-in and support
  • Using data visualizations from Procedural Analytics and VSA that demonstrate peer benchmarks and individual variations in procedural costs and clinical outcomes
  • Using aptitude to efficiently execute the RFP process

"What was different this time is that I was able to talk to doctors first, and I already had 80% of the information, 80% of the picture. I used that opportunity for the doctor to fill in the gaps to get to 100% as far as tribal knowledge,” he says. “They don’t want to be the losers, even if it comes to a price point."

Luis Forero
Director of strategic sourcing and procurement,
Rush University Medical Center