5 Ways for Spine Surgery Centers to Save on Implants

1. Continuously renegotiate device contracts. Dedicate one person at the surgery center or management company to track the most commonly used items at the center and review those contracts annually. Renegotiating high volume contracts stands to save surgery centers the most money in the future.

"We use a lot of sutures in our surgery centers, and they cost a lot of money," says Charles Dailey, vice president of development at ASD Management. "We renegotiate those contracts all the time for better pricing. A lot of centers also have a high volume of eye implants. I make a special contract for those and look very closely at negotiating the best rate for our volume."

These renegotiations take a lot of focus, so zero in on a few items and develop a relationship with those manufacturers and distributors. Also work with physicians to streamline implant choices.

"Some vendors will provide you the device and assist you in informing and training your physician as to the benefits of the lower cost device," says H. Thomas Scott, director of operations for Surgical Management Professionals. "You can also put the surgeon in touch with other physicians and specialists in the area that are using a particular implant so they can talk amongst themselves about the benefits of a particular device.  Keeping the physicians informed and getting their buy-in is what counts."

2. Consolidate supplies and streamline where possible for purchasing power. One of the quickest ways to decrease supply costs at the surgery center is by streamlining the implants. Work with the surgeons to consolidate supplies and choose one company to purchase from.

"If the surgeons are in line with the ASC and can work together to select specific implant companies or suppliers and decide what disposable supplies to utilize, I think the surgery center can negotiate better with vendors," says Douglas Won, MD, director and founder of Minimally Invasive SpineCARE. "They have more purchasing power with implant companies, and where available they can purchase implants at a wholesale price."

ASC administrators can also renegotiate shipping and handling prices for supplies and drugs. Finally, bring anesthesiologists into the discussion as well to lower costs on the drugs they use. "Utilize generic products to help reduce the cost for the ASC," says Dr. Won.

3. Cut down on disposables. There are some devices and systems that use a high volume of disposables, which significantly increases the cost per case. Pay attention to the supplies such as bipolars and dural grafting material that are disposable but extremely expensive.

"There are certain retractor systems with disposable pieces that drive up costs," says Brian R. Gantwerker, MD, of The Craniospinal Center of Los Angeles. "Push more toward using a reusable package that is just as effective. That should be one of the top priorities to cut costs."

When surgeons are actively working with hospitals to cut their costs, especially if their work includes materials changes and vendor negotiations, they can add a consulting agreement to their relationship. "Nobody in this country works for free," says Dr. Gantwerker. "We are entitled to charge for our time if we are doing that service to the hospital, and we can be compensated for it at a reasonable rate."

4. Involve the surgeons in your efforts to reduce implant costs. Make them aware of the cost associated with each device and vendor and compare the costs. "Your surgeons work closely with company reps, so it is easier for them to ask for lower prices for implants," says Lynn S. Feldman, RN, MBA, administrative manager of Eastwind Surgical, a spine center in Westerville, Ohio. "They have more leverage with the companies than an administrator could have." Many surgeons simply don't want to talk about prices, but those who do are invaluable in keeping costs down.

5. Consider commoditized implants. Prices of commodity implants are typically less than 50 percent of the average market cost of premium implants. The commodity implant can be used for a variety of cases, such as one-level lumbar fusion, basic rotator cuff repair or a basic suture anchor. For example, the commodity implant for a one-level lumbar fusion costs $2,500-$3,000, compared with $14,000-$15,000 for full invoice price for the premium version for a savings of $12,000 on one case. Even with typical hospital and provider discounts, the surgeon can still save $5,000-$7,000 per case. "A spine surgeon who uses commodity implants for most of his surgeries could realize a half million dollars in savings a year," says Richard A. Kube, MD, CEO of Prairie Spine & Pain Institute in Peoria, Ill. However, make sure the implant is able to provide the same quality of care.



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