At the Becker's Hospital Review Annual Meeting in Chicago on May 10, Richard Kunnes, MD, former CMO of Catholic Health Partners and current CEO of the Sevenex Group, shared tips for hospitals to optimize their resource uses and purchases not by finding discounts on what they buy, but on not buying things that aren't essential.
The principles behind Dr. Kunnes' resource optimization strategy are: Don't buy what you don't need, don't find efficiencies for unnecessary things and when possible, convert expenses into revenues. "In our experience, it's particularly beneficial for hospitals with positive operating margins of 5 percent or less — which is probably 90 percent of all hospitals today, or 95 percent of non-profit hospitals," he said.
The savings potential is especially high on procedures commonly covered by Medicare, such as hip replacement. Medicare pays a low, set reimbursement for these items, so it's important to keep inventory and supply expenses low. Many hospitals look to save money negotiating better prices with vendors, but Dr. Kunnes said there are many instances where hospitals can avoid purchasing some products altogether.
For examples, items such as floor disinfectant and surgical shoe covers meant to minimize infection have actually shown little evidence that they lower infection rates. Hospitals can eliminate those purchases altogether by converting to strong floor detergents instead of disinfectants, and they can discontinue supplying shoe covers to surgeons for free, installing vending machines for surgeons who can pay for their own each procedure if they prefer.
Hospital bed linens are typically washed daily but disintegrate after eight to 10 washes. Yet, no research shows that washing them this frequently keeps patients healthier. Dr. Kunnes recommended washing them every three days, or perhaps even four for procedures that typically require a four-day hospital stay. Even shrinking this down to two days can save hospitals substantially.
Using less is beneficial to hospitals' resource optimization as well, he said. Chief surgeons can free up 20 to 40 percent of their department budgets by using less blood during minimally invasive techniques, saving $800 to $1,000 on each unit of blood that doesn't need to be purchased. Research also shows it is medically appropriate to discontinue preventive antibiotics once a surgery patient is closed up, saving hundreds of thousands of dollars annually. "It's not about discounts," Dr. Kunnes said, "it's about use."
All of the cutbacks he proposes are backed by medically sound research, and they have an expected return of 11 to 1 in most cases, he said.
One of the most surprising alternatives he suggested was replacing the use of barium sulfate as a contrast medium for gastrointestinal screenings with whole milk, which achieves the same contrast on diagnostic tests and can be administered for free compared with drugs and other agents that require an expensive medical professional to administer.
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The principles behind Dr. Kunnes' resource optimization strategy are: Don't buy what you don't need, don't find efficiencies for unnecessary things and when possible, convert expenses into revenues. "In our experience, it's particularly beneficial for hospitals with positive operating margins of 5 percent or less — which is probably 90 percent of all hospitals today, or 95 percent of non-profit hospitals," he said.
The savings potential is especially high on procedures commonly covered by Medicare, such as hip replacement. Medicare pays a low, set reimbursement for these items, so it's important to keep inventory and supply expenses low. Many hospitals look to save money negotiating better prices with vendors, but Dr. Kunnes said there are many instances where hospitals can avoid purchasing some products altogether.
For examples, items such as floor disinfectant and surgical shoe covers meant to minimize infection have actually shown little evidence that they lower infection rates. Hospitals can eliminate those purchases altogether by converting to strong floor detergents instead of disinfectants, and they can discontinue supplying shoe covers to surgeons for free, installing vending machines for surgeons who can pay for their own each procedure if they prefer.
Hospital bed linens are typically washed daily but disintegrate after eight to 10 washes. Yet, no research shows that washing them this frequently keeps patients healthier. Dr. Kunnes recommended washing them every three days, or perhaps even four for procedures that typically require a four-day hospital stay. Even shrinking this down to two days can save hospitals substantially.
Using less is beneficial to hospitals' resource optimization as well, he said. Chief surgeons can free up 20 to 40 percent of their department budgets by using less blood during minimally invasive techniques, saving $800 to $1,000 on each unit of blood that doesn't need to be purchased. Research also shows it is medically appropriate to discontinue preventive antibiotics once a surgery patient is closed up, saving hundreds of thousands of dollars annually. "It's not about discounts," Dr. Kunnes said, "it's about use."
All of the cutbacks he proposes are backed by medically sound research, and they have an expected return of 11 to 1 in most cases, he said.
One of the most surprising alternatives he suggested was replacing the use of barium sulfate as a contrast medium for gastrointestinal screenings with whole milk, which achieves the same contrast on diagnostic tests and can be administered for free compared with drugs and other agents that require an expensive medical professional to administer.
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