Cost Savings Yet Untapped – Specialty Surgical Instruments
As fiscally-strapped healthcare organizations continue to streamline processes, surgical staff who are familiar with instrumentation are less frequently involved in surgical instrument purchasing. Research and purchasing is being handled increasingly by supply chain and materials management staff who must quickly learn how to effectively buy surgical instruments.
Leading healthcare organizations recognize that one dollar saved is equal to twenty five dollars in revenue increases and smart surgical instrument purchasing can greatly contribute to the tighter budgets faced by healthcare organizations. For example, the same pair of forceps used in cataract surgery can cost between $240 to more than $600 from different vendors. With such disparity prevalent in surgical instrument pricing, the cost-saving incentives make it well worth a facility’s effort to compare prices before purchasing specialty surgical instruments. The value of surgical instrument purchases in the United States has been figured at six hundred Million dollars a year.
More Requests for Rarer Instruments
Hospital systems are quickly acquiring clinics, surgical centers, and specialty medical practices, such as gynecology, podiatry, ENT and dermatological offices. Large healthcare organization’s supply chain and materials management staff now find themselves responsible for the procurement of specialty surgical instruments for an increasing number of off-site locations and for specialties with which they have little or no knowledge. They are unfamiliar with the vendors, have never done business with them, and have no accounts or contracts with them.
In smaller facilities, instrument purchasing is often handled by a nurse or other staff member whose primary role is patient care. Many lack the resources for intensive research, the instrumentation knowledge, have little time to source and compare costs, and spend a large amount of time playing phone and email tag with vendors. Sourcing specialty surgical instruments for an increasing number of surgeons often means reliance on a GPO or other contracted method that fails to offer discounts on specialty surgical instruments.
Specialty Surgical Instruments are Difficult to Compare
Surgical instruments have become more complex especially in specialty areas like ophthalmology, ENT, orthopedics, spine, and laparoscopic surgery. Compared to other medical products, it can be arduous to compare costs of these highly-specialized and increasingly expensive instruments.
As hospitals and surgical facilities expand, they are performing a higher volume of surgeries in more specialties, usually with multiple surgeons operating in each specialty, each with their own pattern and vendor preferences. It is a struggle for surgical facilities to access quality surgical instruments, satisfy the surgeons’ requests, and lower cost simultaneously.
30% of the Surgical Instruments Required by a Hospital Network Don’t Come Through Contracted Sources
Robert Edelstein, President of Millennium Surgical Corp., has spent the last 23 years working with nurses and instrument procurement staff, helping them to locate and compare surgical instruments. “About 30% of the surgical instruments required by a hospital network don’t need to come through contracted sources,” says Edelstein. “Most often, they are paying list price for these instruments when they don’t have to. We hear time and again from new customers that they could have been saving thousands of dollars a year if they’d managed their purchases more effectively.”
The Instrument Industry is Confusing
Managing purchases more cost-effectively, however, often comes at the mercy of employee time and frustration. With hundreds of companies distributing surgical instruments to facilities in the U.S., keeping track of brands, their ownership, suppliers, sales representatives, and product lines is nearly impossible. To cut through the fog, many hospitals and surgical facilities rely on a GPO (Group Purchasing Organization) to help reduce cost and save time. GPOs, however, have their limitations and it can be a costly mistake to assume a GPO will provide savings on specialty instruments.
Why GPOs Aren’t the Answer for Specialty Instrument Procurement
GPOs have a great track record of helping facilities reduce some costs, primarily on commodity-type products of consistent quality. When GPOs consider surgical instruments, they often only focus on top selling items, general surgical instruments, or the top 1,000 instrument patterns. To become a contracted vendor, instrument manufacturers and vendors compete exclusively on price, forcing the supplier to source the least expensive products they can. While GPO’s have been successful in driving down the cost of basic instruments, quality has been impacted. And they have had little or no impact on the cost of specialty instruments like those used in ophthalmology, ENT, orthopedics, spine, and laparoscopic procedures.
GPOs also don’t offer discounts on most specialty surgical instruments. Large vendors who do offer specialty instruments only offer a limited line, meaning that most must be sourced through small specialty companies. And GPOs lack the experience and expertise in these specialized fields to accurately coordinate pricing. In the end, GPOs can help reduce cost for many standard instruments but fail to provide savings for required specialty instruments.
Comparing and Reducing Cost Can be Done Effectively While Maintaining Surgeon Satisfaction
For as complicated as specialty surgical instrument procurement can be, solutions are available to locate and compare specialty surgical instruments and meet purchasing requirements. Orders can be consolidated, staff time can be saved, and cost reductions are possible while assuring surgeon satisfaction.
9 Tips for Comparing and Reducing Cost While Maintaining Surgeon Satisfaction
- Focus your cost comparison and evaluation on the higher cost items. These items will have the most impact on your surgeon’s satisfaction and your budget. Millennium Surgical Corp.’s Instrument Specialists have the resources to help you do this quickly, effectively, and in a way that is easy to understand.
- Give your vendors as much information as possible to identify the instruments you need. Use a catalog or reference part numbers when you can, rather than providing just a description, to clearly identify the instrument. When you can’t, provide photos and measurements along with your description. Millennium Surgical offers the Instrument Guru service which will help you identify rare instruments with worn part numbers.
- If the surgeon requests a specific instrument from a specific vendor, ask the surgeon why they were specific. Surgeons often ask for catalog numbers or vendors as a habit. Ask your surgeon if lower cost equivalents can be considered. (Millennium Surgical’s instruments can be evaluated in surgery and returned with our 30 day no-risk guarantee.)
- Work with an instrument vendor who has your interest, and the interest of your patients, at the top of their priority list. “I founded Millennium Surgical Corp. on the principle that instrument procurement shouldn’t be hard, I believe that busy nurses and instrument technicians should stay focused on patient care, and that they deserve an easy way to locate and compare instruments,” says Edelstein. “Your vendor should always have what’s best for your practice and patients at heart.”
- Work with a company that is constantly expanding and improving upon its product offerings. “We talk to our customers to find out where their pain is so that we can constantly serve them better,” says Edelstein. “We witness the increasing challenges they face and your vendor should always strive to do better.”
- Be fully aware of return policies. “Not all vendors will let you evaluate an instrument in surgery, some will not accept an instrument for return if the package was opened” says Edelstein.
- Compare cost.
- Verify surgeon satisfaction with the instruments.
- Update your records to reflect the instrument purchased.
Millennium Surgical Corp.’s staff of surgical instrument specialists will work with your department as an ally. Their one-on-one support is backed by an extensive product database with product details, costs, and catalog numbers from most instruments and suppliers. They respond to quote requests quickly, often the same day, with no false promises. They match instruments to your surgeon’s demands and only provide a quote for an instrument that meets your specifications, satisfying more than 99% of the surgeons they supply. And just in case, a no-risk surgeon satisfaction guarantee is in place, with no restocking charges. Instrument Specialists are available 10 hours a day, five days a week, with no complicated phone menus to navigate. Ask your Instrument Specialist about solutions for Supply Chain and Materials Management Departments.