A systemwide focus on supply chain management is helping Sutter Health, a large, Sacramento, California-based health system, to improve its financial performance by adopting best practices and taking a contemporary approach to strategic sourcing, value analysis, and logistical support. The target: Trim $200 million from expenses by 2012, and they’re…

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Planning for capital purchasing requires skill. If the process isn’t effective, the OR director will end up with unhappy surgeons and staff. But done effectively, capital purchasing can build relationships among surgeons and hospital and OR leaders. “Capital planning is a challenge in today’s economy,” says Dana Crompton, MHA, vice…

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Negotiating with orthopedic vendors can be frustrating as OR leaders strive to balance competing agendas among companies, surgeons, and the hospital. Kimberley Murray, MS, RN, CNOR, administrator for the orthopedic and spine service line at St. Joseph’s Hospital (SJH) in Syracuse, New York, reduced frustration by adopting a program that…

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An analysis by Premier of data from 323 of its member hospitals shows they are losing $1.82 billion annually for 12 orthopedic and cardiac case categories because of Medicare reimbursement shortfalls. Lack of evidence-based outcomes data and the rising cost of physician preference items (PPIs) are also cited as reasons…

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Medtronic caused a stir in February 2011 when it canceled several contracts with the 2 largest group purchasing organizations (GPOs), Novation and Premier. The big device company ended 5 Novation contracts worth $2 billion covering spinal implants, neurosurgery power tools, bone graft materials, and cardiac rhythm management products plus a…

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On average, hospitals purchase 73% of their materials through group purchasing organizations (GPOs), with a wide range from 30% to 90%. But fewer—19% —purchase expensive orthopedic implants through GPO contracts, a new survey finds. Eugene S. Schneller, PhD, a business professor at Arizona State University, Tempe, and a supply chain…

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Creating a more seamless system for OR inventory and charging often has been hampered by information systems that don't talk to each other, or don't talk easily. Humans in the OR and materials management may not talk much either. Gradually, these barriers are coming down, and hospitals are taking a…

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Instrument tracking Currently use an instrument tracking system Yes 36% No 64% Electronic purchasing Percentage of transactions performed through electronic data interchange (EDI) Surgical supplies None 14% 1%-25% 18% 16%-50% 20% 51%-75% 28% >75% 21% Physician preference items None 34% 1%-25% 34% 16%-50% 14% 51%-75% 11% >75% 7% Source: Hositals…

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Getting physicians to align with the hospital in making decisions on high-ticket items like implants is challenging. Vendors cultivate close ties with physicians, who drive many of the decisions on these expensive devices. Hospitals can be left out until it's time to write the check. Memorial Medical Center, a community…

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When you go to the grocery store and buy Wheaties, the clerk scans the box. The scanner captures the purchase. Software adjusts the inventory and tells the store when it's time to reorder and restock The vendor makes sure boxes get back on the shelf. Supply chain articles Can OR…

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