on September 27, 2010 |
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Topics: Imaging, Service Lines, Medical and Surgical Supplies, Supply Chain, Finance
After speaking with members at the 2010 IPP National Meeting in Marina Del Rey, CA, one idea on imaging supply cost savings seemed interesting to share. To control supply waste in high expense areas like IR, organizations frequently dedicate attention to these areas either using personnel or technology. Ideas presented at the meeting included manual supply logs, staff profiling, dedicated IR supply managers and barcode inventory technologies. However, another method used to tackle the problem of high expense supply waste is contracting with vendors for "recoup" clauses. In cases like the one presented at the 2010 IPP National Meeting where physicians wasted stents due to dropped supplies or opened but unused items, there is opportunity to recoup some of those wasted dollars directly from vendors. When contracting, hospitals can secure terms that allow the return of opened, but unused or even dropped stents for 50% reimbursement. In many cases, vendors will sterilize and repackage these items to be sold to other organizations or even the originating institution. Be sure to investigate this opportunity as it seems it could only benefit any participating organization.
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"Recoup" Clauses May Offer Cost Savings in High Expense Supply Areas
on August 9, 2010 |
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Topics: Imaging, Service Lines, Margin Performance, Finance, Supply Chain
At this year's national meeting, we dedicated a portion of our discussion on securing imaging margins to reducing imaging supply costs. One idea we presented is the use of non-GPO arrangements in cases where working directly with vendors may offer better pricing. We've received a number of follow-up questions from members on this practice, so I wanted to provide some further comments.
The real potential to reduce costs by dropping your GPO lies in the negotiable rebates achieved by the "Discount Safe Harbor". Absent GPO affiliation, a health system can redirect the rebates, normally given to GPOs, directly to the participating institutions. In the cases we have researched involving larger health systems, these rebates can add up to as much as $7-9 million annually. Additionally, working outside the GPO requires institutions to strengthen their relationships with vendors to achieve ideal pricing. By customizing each contract to meet the needs of each vendor interaction, vendors are often more confident that the terms of the contract will be upheld. This can often lead to pricing that is well below the highest tiered pricing within the GPO.
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Dropping the GPO: Pros and Cons
