An analysis revealed the Arizona health system was paying 10 to 20 percent more for its implants; in response, HonorHealth negotiated better prices, saving $1.5 million.
Featuring interviews with HonorHealth CFO Alice Pope and Timothy Miller, vice president of procurement and supply chain, ModernHealthcare reports how the Arizona health system turned its focus on the cost of implants and supplies and found out it was paying too much.
The joint replacement business is booming, accounting for 40 percent of HonorHealth’s reported $1.7 billion in revenue.
HonorHealth hired Premier, a group purchasing organization for not-for-profit hospitals and other facilities, to do some cost comparing between about 15 implant vendors.
Premier published on May 23, Analysis Finds Potential for Millions of Dollars in Savings in Total Joint Replacements and found providers paid significantly different prices for a range of hip and knee devices. In a more detailed examination of nearly 350 hospitals over the past year, Premier found:
- A $1,500 difference between the top performing and bottom performing hospitals for knee implants.
- A $1,700 difference between the top performing and bottom performing hospitals for hip implants.
If all hospitals were able to meet or exceed the top 25th percentile pricing and close the gap, Premier identified a savings opportunity of $23.7 million for knee implants and $19.1 million for hip implants.
Premier identified other savings opportunities to consider when driving down costs of joint replacement:
- Operating Room Time
- Bone Cement
Read the story in ModernHealthcare