Doctors Community Hospital, a private, not-for-profit hospital with a comprehensive orthopedic program in Prince George's County, Maryland, embarked on a system-wide cost-reduction effort. Several budget reduction committees were formed, including one dedicated to contracts and supplies. Recognizing a significant opportunity for savings in the orthopedic supply inventory, this committee recommended to the executive staff that it concentrate its efforts there.
Given the green light, the Doctors’ materials management team reached out to its PriceGuide™ partners at ECRI Institute to request a thorough market search of pricing on knee, hip, and spinal implantables in an annual period. Doctors provided its usage and vendor data files to PriceGuide to benchmark pricing against its database of nearly 2 million unique supply items. PriceGuide helped the hospital identify savings on the supply items it requested, based on the low, average, and high prices paid by other facilities.
Doctors set a capitated price for hip, knee, and spine products and requested bids from three vendors with the intent of negotiating contracts based on real prices paid by their peers.
Using PriceGuide’s price points, Doctors Community Hospital succeeded in identifying and negotiating a savings of $500K across its orthopedic supply spending, contributing significantly to the corporate spend reduction goal.
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