A major hospital organization was challenged by efforts to keep up with the latest treatment technologies and ensure that therapeutic outcomes were consistent, while keeping costs down.
- For one particular treatment, Treatment A, there were several competing companies offering different technologies and devices in the market- but with the same therapeutic outcome. Although the devices were interchangeable from a therapeutic standpoint, costs varied dramatically from one device to the next. One therapeutic device had attained market dominance, the doctors were satisfied with its performance, and there was no compelling reason to change to another device.
- For another treatment, Treatment B, the different facilities were using multiple brands and multiple devices with identical therapeutic functionality, often paying significantly higher prices for a version from one contracted vendor than for an identical version from a second contracted vendor. At some locations, identical devices were being supplied by off-contract vendors.
SentinelC3 developed a report showing device therapeutic utilization, breaking it down by brand name and by facility. The report was able to identify where there were therapeutic equivalencies in other products, on contract, even though they might be used for a different therapeutic treatment, and showed cost savings by changing to the lower priced item.
The report also identified areas of possible misuse of products, as well as when a facility was being over-charged by a distributor.
- For Treatment A, SC3 looked at clinical studies that compared the competing devices, even though technologically different, were interchangeable from a therapeutic standpoint. Research showed that both were equally beneficial, the therapeutic outcome was the same, but the lower priced device made it easier for nurses to manage the patients. This information allowed the clinical supervisors to educate facility personnel on equivalent therapies using lower priced alternatives with vendors on contract.
- For Treatment B, utilization reports identified multiple brands of devices being used for identical therapeutic functionality, breaking down costs by facility and cost per brand. The higher cost brand was virtually eliminated by informing management and implementing cost savings initiative driving compliance from the top of the organization down to the facility level.
For Treatment A, a transition from the high dollar therapeutic device to two alternative devices resulted in savings of $12 million over a six month period.
For Treatment B, the hospital organization was able to convert to alternative products that gave similar therapeutic outcomes at 1/10th the cost. In addition, they were able to convert an entire therapeutic system from one vendor to another at a cost savings of 50%. This amounted to a cost reduction of several million dollars per year.
With both Treatments A and B the therapeutic outcomes were proven to be equal, so all of this was done without compromising the quality of care to the patients.