Patient affordability is one of three pillars of the Partners HealthCare Strategic Initiative, along with care redesign and reputation/communication. By cutting costs and improving efficiency, Partners is taking steps to make health care more affordable for patients and has committed to implementing $300 million in systemwide cost savings over three years. A key aspect of this patient affordability pledge is finding ways to save on non-labor-related costs.
“Most of these savings will come from appropriately standardizing the products we purchase, carefully managing their use and achieving optimum pricing,” says Mary Anne Thadeu, corporate director of Finance and a lead for Patient Affordability. “We want to use the leverage of our system to save costs on products and services.”
Partners estimates that $50 million to $75 million in savings could be found in non-staff areas over a 12 to 18-month period. In the past several months alone, $25 million in savings have been implemented. Several teams are actively working on clinical and nonclinical cost-saving projects.
One such team comprises physicians, nurses and administrators working to reduce the cost of spine implant devices, which are typically very expensive. “We had many discussions to see whether our surgeons and others could agree on a more limited selection of products and a reduced number of vendors for those products without compromising care,” says Lawrence Cohn, MD, co-chair of the team and physician director of Medical Device Technology at Brigham and Women’s Hospital. “We provided a forum where everyone had a chance to express their opinions and discuss alternatives. When it came down to asking the surgeons, ‘do you really need XYZ device or can you use something else?’ they almost always agreed that there was an equivalent and acceptable alternative.”
Once the team agreed on the devices, they presented a pricing package to vendors for each component of a spine device – down to even screws – and a lower price overall. The 37 vendors were asked whether they would accept the pricing strategy; in the end 28 vendors did. New three-year contracts went into effect in mid-September, with a total annual savings of $4.3 million – a 28 percent reduction from the original budget for these devices.
“We took this approach for a couple of reasons: spine implant devices are very high-cost items to begin with; benchmarks showed the prices vendors were charging us were high; and the new contracts would cover all vendor products, making it easier for Partners to administer,” says Thadeu. “Through this process, we learned that, when doctors agree on a common vision and remain united, we are able to achieve significant benefits.”
Another cost-saving project involves numeric and alphanumeric pagers. More than 12,000 pagers have been issued to employees and staff throughout the Partners system. To improve efficiency and reduce costs, a Patient Affordability team has been identifying underused pagers and discontinuing them if no longer needed. They also are determining which administrative employees could switch to cell phones and confirming which staff do need a numeric or alphanumeric pager. The initiative will not affect emergency management pagers.
In researching the issue, the team found that 29 percent of pagers receive five or fewer pages per month; some receive only six to 10 pages per month. With these statistics in mind, the goal is to reduce the number of pagers by one-third, which could save an estimated $250,000 to $280,000 annually throughout Partners.
“To date, it’s been determined that almost 1,300 pagers across Partners are no longer needed,” says Becky Trask, director of Partners Strategic Operations Management. “This is more than 30 percent of our goal.”
To submit cost-savings ideas, send an email to firstname.lastname@example.org. For more information about the Partners Strategic Initiative and other redesign efforts at the MGH, visit http://priorities.massgeneral.org.
Read more articles from the 11/9/12 Hotline issue.