Implants for procedures can either make or break a hospital's profits when it comes to orthopedic surgery. Good contracts for these items consist of more than just a low price; other factors such as quality and payor issues are also important to success at your hospital.
Brett Gosney, CEO of Animas Surgical Hospital in Durango, Colo., shares five tips for keeping orthopedic implants costs low while providing quality care.
1. Include surgeons at every step of the process. Orthopedic surgeons are essential to the overall success of your hospital's program, both on the clinical and business end of operations. Since they are the ones who are going to use the implants, Mr. Gosney says it is critical to bring surgeons in early on the decision-making process.
"Leaving surgeons out of the equation often leads to senseless conflict [between administration and physicians]," Mr. Gosney says. "Aligning physician and hospital incentives is just one key to the hospital's success."
With a large choice for implants and manufacturers, it may be difficult for hospital administrators and materials managers to be certain they are getting the best value for their money. Surgeons can aid in the process because they will be able to evaluate the quality of implant as well as the knowledge and honesty of the sale representative.
"Administrators tend to look solely at cost, which is way it is important to involve physicians. If an implant is not working out the best or your sales rep is only interested in selling more products, surgeons can let you know much earlier in the process," Mr. Gosney says.
2. Sales reps should do more than just sell products. The scope of an implant sales representative's expertise should be wider than just what his or her company makes. According to Mr. Gosney, a quality sales rep is important to a good implant contract.
"Good sales reps are essential in orthopedics, especially in total joint replacements," Mr. Gosney says. "They should be well-educated on all areas of the implant, from surgical techniques to payor issues."
Mr. Gosney says that a quality rep should possess the following traits: 1) excellent clinical competence; 2) effective communication with staff and surgeons; and 3) good sales skills. He stresses that these traits should be evident in this order. "If a rep makes sales his or her number one priority, then you probably have a suboptimal rep," he says.
3. Check reimbursements prior to signing a contract. Hospitals can often be surprised after researching implant providers to find that particular implants have low reimbursement or are not covered by payors. Consequently, hospitals should know how an implant is reimbursed in its market and other similar markets to ensure that they are receiving the best return on their investments.
"We have learned to push the burden of proof of coverage back on the vendor and the sales rep," Mr. Gosney says. "If we like a product, we ask the sale rep to show us proof that the implant has been covered in other markets. They are increasingly asked to do this kind of research, so a good rep should be able to provide you with this information."
Mr. Gosney also suggests researching reimbursements on some common CPT codes to make sure the procedures are covered.
"It's a highly competitive market, and, overall, quality is similar for implants," Mr. Gosney says. "We've had to be honest with a few companies. We asked them to supply proof that the implant would be covered, and they couldn't provide us with the information. We had to say, 'Sorry, but we have to cover costs.'"
4. Schedule regular reviews of implant contracts. Animas Surgical Hospital reviews its contracts on a regular cycle. For example, total joint replacement procedures are reviewed every two years. Mr. Gosney says this review process is essential to keeping the hospital and its surgeons up to date on what is happening in the orthopedic implant market.
"We review what is currently going on in journals and the literature. We then send out request for proposals to the companies we are interested in, and we bring in reps and evaluate the products," Mr. Gosney says.
Through this process, Animas can demo new implants and make sure they have the best contracts in place for the hospital and its patients. "We aren't just looking at a price point. We want to see the new techniques and surgeries and see if they will improve our outcomes," Mr. Gosney says.
Running regular reviews can also incentivize your current vendor to offer you the best deal. For example, Animas has returned to the same vendor for three consecutive two-year cycles. "It has kept our current vendor honest," Mr. Gosney says.
Another important feature to Animas' review process is that it is closely monitored and run only by the hospital's administration and surgeons.
5. Don't be afraid to use similar techniques for other surgical products. Although implants tend to be the biggest expense for orthopedic surgery, similar evaluation can be performed for all types of surgical equipment, especially commonly used items such as shavers and anchors, according to Mr. Gosney.
"The key element is standardization," he says. "Variations in big implants will get the most notice, but standardizing smaller pieces is critical."
Similar to the evaluation process for implants, standardization begins with the surgeons. The first step, according to Mr. Gosney, is to ask your surgeons what kinds of equipment and systems they are interested in. The administrators can then work with operating room or materials managers to narrow the field to several candidates, send out requests for proposals and set up trials of the equipment.
"We've had reps run cadaver labs for shoulder anchors. Many vendors are willing to let the surgeons demo the products to see how they can work for them," Mr. Gosney says.
The final step is to follow up with surgeons to see which products they liked the best, and then, based on quality, price and support from the rep, decide which vendor to choose. "It should be a collegial, collaborative experience," Mr. Gosney says.
Mr. Gosney is the CEO of Animas Surgical Hospital in Durango, Colo., and president of Physician Hospitals of America. Learn more about Animas Surgical Hospital at www.animassurgical.com.
Brett Gosney, CEO of Animas Surgical Hospital in Durango, Colo., shares five tips for keeping orthopedic implants costs low while providing quality care.
1. Include surgeons at every step of the process. Orthopedic surgeons are essential to the overall success of your hospital's program, both on the clinical and business end of operations. Since they are the ones who are going to use the implants, Mr. Gosney says it is critical to bring surgeons in early on the decision-making process."Leaving surgeons out of the equation often leads to senseless conflict [between administration and physicians]," Mr. Gosney says. "Aligning physician and hospital incentives is just one key to the hospital's success."
With a large choice for implants and manufacturers, it may be difficult for hospital administrators and materials managers to be certain they are getting the best value for their money. Surgeons can aid in the process because they will be able to evaluate the quality of implant as well as the knowledge and honesty of the sale representative.
"Administrators tend to look solely at cost, which is way it is important to involve physicians. If an implant is not working out the best or your sales rep is only interested in selling more products, surgeons can let you know much earlier in the process," Mr. Gosney says.
2. Sales reps should do more than just sell products. The scope of an implant sales representative's expertise should be wider than just what his or her company makes. According to Mr. Gosney, a quality sales rep is important to a good implant contract.
"Good sales reps are essential in orthopedics, especially in total joint replacements," Mr. Gosney says. "They should be well-educated on all areas of the implant, from surgical techniques to payor issues."
Mr. Gosney says that a quality rep should possess the following traits: 1) excellent clinical competence; 2) effective communication with staff and surgeons; and 3) good sales skills. He stresses that these traits should be evident in this order. "If a rep makes sales his or her number one priority, then you probably have a suboptimal rep," he says.
3. Check reimbursements prior to signing a contract. Hospitals can often be surprised after researching implant providers to find that particular implants have low reimbursement or are not covered by payors. Consequently, hospitals should know how an implant is reimbursed in its market and other similar markets to ensure that they are receiving the best return on their investments.
"We have learned to push the burden of proof of coverage back on the vendor and the sales rep," Mr. Gosney says. "If we like a product, we ask the sale rep to show us proof that the implant has been covered in other markets. They are increasingly asked to do this kind of research, so a good rep should be able to provide you with this information."
Mr. Gosney also suggests researching reimbursements on some common CPT codes to make sure the procedures are covered.
"It's a highly competitive market, and, overall, quality is similar for implants," Mr. Gosney says. "We've had to be honest with a few companies. We asked them to supply proof that the implant would be covered, and they couldn't provide us with the information. We had to say, 'Sorry, but we have to cover costs.'"
4. Schedule regular reviews of implant contracts. Animas Surgical Hospital reviews its contracts on a regular cycle. For example, total joint replacement procedures are reviewed every two years. Mr. Gosney says this review process is essential to keeping the hospital and its surgeons up to date on what is happening in the orthopedic implant market.
"We review what is currently going on in journals and the literature. We then send out request for proposals to the companies we are interested in, and we bring in reps and evaluate the products," Mr. Gosney says.
Through this process, Animas can demo new implants and make sure they have the best contracts in place for the hospital and its patients. "We aren't just looking at a price point. We want to see the new techniques and surgeries and see if they will improve our outcomes," Mr. Gosney says.
Running regular reviews can also incentivize your current vendor to offer you the best deal. For example, Animas has returned to the same vendor for three consecutive two-year cycles. "It has kept our current vendor honest," Mr. Gosney says.
Another important feature to Animas' review process is that it is closely monitored and run only by the hospital's administration and surgeons.
5. Don't be afraid to use similar techniques for other surgical products. Although implants tend to be the biggest expense for orthopedic surgery, similar evaluation can be performed for all types of surgical equipment, especially commonly used items such as shavers and anchors, according to Mr. Gosney.
"The key element is standardization," he says. "Variations in big implants will get the most notice, but standardizing smaller pieces is critical."
Similar to the evaluation process for implants, standardization begins with the surgeons. The first step, according to Mr. Gosney, is to ask your surgeons what kinds of equipment and systems they are interested in. The administrators can then work with operating room or materials managers to narrow the field to several candidates, send out requests for proposals and set up trials of the equipment.
"We've had reps run cadaver labs for shoulder anchors. Many vendors are willing to let the surgeons demo the products to see how they can work for them," Mr. Gosney says.
The final step is to follow up with surgeons to see which products they liked the best, and then, based on quality, price and support from the rep, decide which vendor to choose. "It should be a collegial, collaborative experience," Mr. Gosney says.
Mr. Gosney is the CEO of Animas Surgical Hospital in Durango, Colo., and president of Physician Hospitals of America. Learn more about Animas Surgical Hospital at www.animassurgical.com.