Here’s a radical idea: What if now is the best time to tackle joint and spine cost savings in your healthcare supply chain?
Yes, we mean right now – April 2020 – during this COVID-19 pandemic.
We know this might seem counterintuitive, but hear us out.
Many headlines are painting a pretty dire picture of this current moment. But the realities in healthcare are more complex than the headlines suggest. Consider first the overall sentiment you see in the headlines. And then, contrast that with the realities that healthcare systems and providers are actually facing.
Headline Sentiment: “All of Healthcare Will Be Overrun”
If you read just about any news source, you hear the same story: hospitals are out of beds (or soon will be), and nearly all staff members will be enlisted to care for COVID-19 patients in some way, shape, or form. You might even read that in especially hard-hit areas, providers will have to ration care because the system is overrun. Through all of this, supply chain is feeling immense pressure as it is overrun with finding and sourcing product – especially PPE.
That narrative makes for a compelling headline. And to be sure, there are hospitals and supply chain teams that are operating well above capacity. However, not every health system is feeling the pressure equally. And in much of the country, COVID-19 has not yet peaked, or the presumed peak has turned out to be more manageable than expected.
Reality is a bit more complex than the headlines might suggest. Here are several reasons that lead us to believe that NOW is the right time for supply chain to tackle joint and spine savings.
Reason #1: Unusually Slow Time for Some
The first reality is that this moment has turned out to be a slow time for some clinical leadership in the healthcare system.
For the sake of freeing up capacity and limiting spread, providers have canceled, limited, or postponed nearly all elective procedures.
As a result, many surgeons and service line leaders (i.e. directors of orthopedics, surgical services, neuroscience, spine) are, for all intents and purposes, on the bench right now, thanks to COVID-19.
Service line leaders are in a unique position to take initiative on savings projects. Supply chain can help by providing resources to capitalize on this opportunity.
Could these providers get pulled into emergency care, should the outbreak get severe enough? Yes, they absolutely could. But at the moment, it appears that social distancing measures are indeed flattening the curve. And we’re not seeing much evidence of surgeons and service line leaders being asked to treat COVID-19 patients.
Reason #2: Crunch Time Is Coming
The second reality is that “elective” does not mean “optional”. Patients can’t wait forever. And these elective joint and spine procedures will come back to the hospital. When they return, they will arrive in full force.
Joint and spine (and other elective) providers will be busier than ever: they’ll be at full capacity – even double-booked – as they accommodate both pre-scheduled elective surgeries and reschedules from the backlog as a result of the current crisis.
Service line leaders need to analyze procedures at the component level by physician to ensure that joint and spine procedures are as cost efficient as possible when electives come back online.
Providers will have to make tough choices prioritizing patients. And it will take some number of months to normalize.
Reason #3: Profitability Relies Significantly on Electives, Now More Than Ever
You may be well aware of this reality already: hospital systems rely on profitability to survive, and much of that profitability is found in elective procedures. It’s a difficult moment, then, because the most profitable procedures are paused or greatly limited.
Procedure profitability is now more important than ever.
Former hospital CEO Rulon Stacey observes in Healthcare Systems: Are You Prepared for the Post-COVID-19 Era? that providers can no longer rely on their business portfolios and endowments to sustain the life of their organizations given the state of the stock market. To survive, systems must rely on fiscal discipline.
Given this reality, maximizing profit – while maintaining or improving patient outcomes – has never been more important.
It makes financial sense to implement cost savings initiatives in a major elective category before the rush hits.
The only challenge? Finding someone with the time to do it.
Reason #4: Supply Chain Teams Are Swamped Right Now
Supply chain teams are consumed with getting product at every turn. And they certainly don’t have time to tackle major, complex spend categories. But hospitals can still make progress in joint and spine cost savings efforts. They just have to take a different approach.
Service line leaders can take the lead right now, along with surgeons. For the long-term viability of the hospital, clinicians can take this unusual opportunity to tackle savings in orthopedic and other complex PPI categories that typically require clinician input to formulate a savings strategy.
For the long-term viability of the hospital, clinicians can tackle savings aggressively in orthopedic and other complex PPI categories.
These are tasks that clinicians might not normally be inclined to consider i.e. aggressive savings tactics in PPI. But these are unusual times. And in many cases they have time on their hands right now. By creating savings initiatives right now through repricing events and other means, clinicians can maximize savings – and thereby profit – in these large elective categories right as those procedures are coming back online.
Curvo Labs Provides the Data and Analysis That Powers Joint and Spine Cost Savings
Cost savings initiatives don’t have to be as time-consuming. Curvo provides data and powerful analysis tools that can greatly speed up your joint and spine cost savings by going deeper than variance analysis by case and surgeon. We bring the construct details at a component level with associated market benchmarks and clinical product enrichments to speed negotiations and savings efforts.
Interested in learning more? Schedule a demo today.