Recession-Proof Your EP Lab!

For several years now, we have asked for your recommendations on what measures you’ve used in reducing or containing costs in the lab. We’ve also wondered if your EP lab utilizes a third party for reprocessing, which might have benefited in some further cost savings. The following article will look at what methods your lab has used in order to manage costs in the electrophysiology practice. Hopefully one or more of these suggestions might help provide some guidance in surviving this economic downturn! These accounts were taken from Spotlight Interviews published in EP Lab Digest between September 2004 to the present. The labs mentioned are located in the United States and Canada. Please note that some comments were edited slightly so as to focus solely on the cost savings aspects of labs. What measures has your EP lab implemented in order to cut or contain costs? In addition, does your lab use a third party for reprocessing? Carilion Clinic, January 2009 “Our hospital limits the number of device vendors. We also reprocess some diagnostic catheters and use the money for continuing education of lab staff. We use Ascent Healthcare Solutions [for reprocessing].” Via Christi Regional Medical Center, December 2008 “We are constantly looking for ways to cut costs, as they always seem to be rising. We reprocess diagnostic catheters, buy in bulk for a lower price, and buy catheters from a Web company that sells items from other institutions that are no longer using a particular piece of equipment. We have also negotiated for a dual-vendor contract on devices to keep costs down. Reprocessing has just been revisited and, so far, seems to be going well; we currently reprocess only our diagnostic catheters.” Mayo Clinic, November 2008 “We do use a third party for some of the specialty catheter items.” Medical Center Hospital, October 2008 “We negotiate the price we pay for our catheters. More importantly, we focus on accurately turning in our charges for EP patients in order to optimize our reimbursement.” The Levinson Heart Hospital at CJW Medical Center-Chippenham Campus, September 2008 “In times with low patient census, staff volunteers to leave early, cutting down on the manpower hours worked. The stock levels are also well maintained by the inventory specialist. In addition, by recycling the catheters, costs are kept down. We presently use Ascent Healthcare Solutions to reprocess the EP catheters.” The Ohio State University’s Richard M. Ross Heart Hospital, August 2008 “Any products that are introduced into the body are single-use only (i.e., diagnostic/therapeutic ablation catheters and intracardiac ultrasound equipment).” Adventist Hinsdale Hospital, July 2008 “We’re very fortunate to have a cadre of young and astute EPs whose main objective is a superior patient experience. They also understand that we work in an industry with shrinking margins, so they are very sensitive to the cost structure of the program. We share financial data, including equipment and supply costs, with them on a regular basis. While we continually reinforce that they make the clinical decisions, they appreciate having the financial information and we feel it strengthens the partnership between the physicians and the hospital administration. We also do bulk buys of our CRM devices and recycle catheter tips — the proceeds of which help fund some of the staff celebrations! [Regarding using a third party for reprocessing:] We did initially, but we were disappointed with the condition of the returned catheters, so we discontinued the program.” Hillcrest Medical Center, June 2008 “Cost containment is predominantly based on patient need. We tailor top-tier devices to those patients who are likely to benefit from the available features (e.g., remote monitoring, algorithms to avoid RV pacing). We also use a non-binding contract with a device manufacturer for further price reductions based on percentage of business. For ablation procedures, we save costs by re-sterilizing and saving the platinum tips from the ablation catheters. We send our catheters to Ascent Healthcare Solutions.” University of Michigan Health System, May 2008 “We have altered staff schedules to control overtime and negotiated contracts with vendors for better pricing (including bulk buys of devices to reduce costs). We use Ascent Healthcare Solutions [for reprocessing].” University of Maryland Medical Center (UMMC), April 2008 “Measures used to cut or contain costs include a just in time inventory with minimal par levels along with standardization of EP supplies. UMMC belongs to a consortium, which helps to maintain lower costs, and is actively involved with the hospital’s Procurement and Contracting Office during negotiations. We also use Ascent Healthcare, but we are trending away from resterilization since the cost savings has been dwindling over the past few years. Catheter vendors have been more aggressive in providing us with better pricing, though.” St. Joseph’s Hospital Health Center, March 2008 “We have always been stringent on our cost per case. We use two major vendors for EP catheters, and get low pricing because we use two. Our turnover time and time per case is quite fast. [Regarding reprocessing], we are single use but also recycle our catheter tips.” Caritas St. Elizabeth’s Medical Center, February 2008 “Through direct collaboration between the EP physicians, our chief radiology technician and the nurse managers, cost-effective measures for equipment orders and bulk purchase programs are analyzed at our weekly staff meetings. [Regarding reprocessing], we are contracted with SterilMed, Inc.” University Hospital Hamburg-Eppendorf, January 2008 “We have learned how to perform procedures with a minimal amount of equipment. We also have the capability to use re-sterilized catheters.” Orlando Regional Medical Center, November 2007 “A value and financial analysis is completed and reviewed with physicians prior to the induction of new products. We frequently take advantage of bulk purchasing and vendor contracts. We have had great success with reprocessing using Ascent Healthcare Solutions.” Community Healthcare System, October 2007 “We do bulk buys on a regular basis for some of the more expensive items utilized in the departments (e.g., devices, leads, specialty catheters). In addition, because of the standardized stock at all three facilities, there is no need to have unused quantities of supplies at any facility. Staff carries equipment/supplies to other facilities if needed. We constantly evaluate contracts with our device and catheter vendors.” The University of Utah, August 2007 “We implemented a bar coding system for supplies, have frequently negotiated prices with vendors based upon benchmarks, started a value analysis process to review the introduction of new supplies or technologies, and have made consistent efforts to decrease overall inventory. We do reprocess some of our catheters and supplies.” LDS Hospital, July 2007 “We have worked closely with our electrophysiologists to standardize procedural supplies and techniques that allow for a reduction in variation and inventory needs. Pricing is negotiated centrally using the volume of the entire Intermountain Healthcare network of hospitals. We do reprocess the ICE catheters due to pricing and product availability shortages.” William Beaumont Hospital, May 2007 “Beaumont uses a bid process in which we sign contracts with vendors for a designated period of time. Our group purchasing organization, Broadlane, is used when applicable. Bulk buys are at times considered. We have implemented standardization within the Cardiology Departments at our two hospital sites. Value Analysis meetings are held to determine clinical acceptability and financial analysis prior to the induction of new items. Currently we are only reprocessing AcuNav catheters using Ascent Healthcare Solutions.” Hershey Medical Center's Penn State Heart & Vascular Institute, March 2007 “We have tried to contain cost by bulk-buying with the CRM vendors. We have good contract pricing with no percentage commitment to any of the major manufacturers. We use a third-party reprocessing company for most diagnostic catheters; we find proper handling and packaging of used catheters can increase their life.” Nebraska Heart Hospital, December 2006 “The implementation of product standardization provides pricing incentive from participating vendors. We use just in time inventory management to control cost of on-hand inventory. We do use a third party for reprocessing of all of our EP and ablation cables and any of our EP catheters that are not steerable, or in other words, not on a handle.” Huntsville Hospital, November 2006 “Our entire staff is very cost conscious, including our medical director. The Cath/EP lab manager, materials management staff, purchasing director and medical director all work together to decide on a maximum purchase price allowed to ensure the best price. If the company does not agree to these terms, their inventory is removed from the hospital. With this policy in place, along with a JIT warehouse and a well-trained staff that doesn't open a product until ready to be utilized, we have seen a significant reduction in costs.” University of Virginia's Atrial Fibrillation Center, October 2006 “We currently look at patient trends and physician preferences and try and cater to these by purchasing in bulk. This keeps costs low and provides a steady flow of inventory available whenever it is needed. We use a third party for reprocessing.” Oregon Heart & Vascular Institute, September 2006 “We continue to work closely with our vendors on pricing. Last year we entered into a capitation agreement for rhythm management products, which has resulted in substantial savings. A third-party vendor reprocesses some of our diagnostic catheters, with mixed results. We re-sterilize all of our catheter cables in house.” Methodist Hospital, August 2006 “We work very closely with our vendors on contracts to contain device costs, and we continually modify our trays to reduce the number of individual items being opened for any procedure. We have a products committee, and all new items must be sponsored by a physician and presented to the committee before being stocked. We use a third party for reprocessing.” Robert Wood Johnson University Hospital, July 2006 “Price negotiation is done on a regular basis to ensure the lowest price for our institution's volume. No, we do not use reprocessing; we use disposable trays and equipment.” Carolinas Medical Center, June 2006 “In 2000, the Carolinas HealthCare System formed an interdisciplinary team of cardiologists, healthcare administrators, operational leadership, and materials management personnel that share information and devise strategies for contracting with interventional and rhythm management manufacturers. This committee was named P.A.V.E. (Physicians Achieving Value and Excellence). Working together, they formed a strategy of shelf pricing, where the price of each device is set at one price for all similar devices. If the company does not agree to these terms, their devices are removed from inventory and the physicians agree not to use that product. With this level of cooperation, the PAVE committee is able to bring all the manufacturers to the table for realistic pricing for all their products. This has produced significant savings for the Carolinas Healthcare System. Some of our diagnostic catheters are also reprocessed through a third party.” London Health Sciences Centre, May 2006 “The hospital is a member of a national bulk-purchasing consortium that secures the best price for commonly used materials. The management team takes advantage of offers provided by vendors of new technology, as appropriate. Recently, a new tendering process for implantable devices has been implemented, resulting in savings for the hospital.” Overlake Hospital Medical Center, March 2006 “The hospital is in the process of adopting a Value Analysis Team (VAT) process that requires all new products be introduced and approved by the VAT team for that section. The EP products will be under the Endovascular VAT, made up of representatives from Surgery and Cardiology. The goal is to reduce duplication of inventories, reduce the number of vendors in order to improve pricing, and to assure that all contract, reimbursement and charge master needs are in place prior to introduction of the product for demo or adoption. In addition, we use a third party to reprocess diagnostic EP catheters and intracardiac echo transducers; however, as this program is fairly new, we have yet to determine the full benefit of the practice.” Redmond Regional Medical Center, January 2006 “The hospital has an active administration team, SMAT, which analyzes cost as a group and decides on cost-saving matters throughout the hospital. The EP lab manager is a part of this team. This team has been extremely successful at saving money and cutting costs. No, we do not reprocess; due to large bulk purchases we are able to save money and time over reprocessing.” Sunrise Hospital & Medical Center, December 2005 “Currently, we have a contract with two major suppliers for implantable devices that covers the Far West Division of HCA facilities. While this contract has provided our Division with substantial savings, we continue to explore opportunities to improve product availability, pricing, and physician satisfaction. In addition, we regularly review our CV contracts with vendors to explore shifting market share to obtain better pricing on products based on sole source, dual-source vendors, etc. It is a fine balance between containing costs, maintaining a superior product line, and physician satisfaction. We have moved all of our higher priced items over to consignment to minimize our expenditures on expired products.” King’s Daughters Medical Center, November 2005 “In order to contain costs in the electrophysiology lab, we limit the number of vendors servicing the lab. This allows us to keep a smaller inventory of supplies on hand while providing the physicians with the equipment necessary to perform the procedures. EP vendor selection is based primarily on quality of service. Our purchasing department and physicians meet once a year with device companies to negotiate contracts regarding pricing. We only carry two device companies. The contracts are awarded based on pricing and the quality of the devices. The EP lab does not use a third party for reprocessing procedures; all the materials used are new out of the box.” Bay Medical Center, October 2005 “We currently reprocess our diagnostic EP catheters and use as little disposable equipment as possible. Due to our own Value Analysis Team, who looks at best pricing and products, we developed a special disposable procedure tray that was a cost savings over a 12-month period of $44,000. We also negotiated on pricing of EP catheters that will equal a savings of $23,000 annually. We reprocess several of the EP catheters that generate a big savings.” John Muir/ Mt. Diablo Health System, September 2005 “The purchasing department works very closely with the CRC to negotiate pricing with our vendors.” Rockford Memorial Hospital, August 2005 “We are extremely effective in negotiating our capital purchases with major vendors, and our reprocessing program has saved thousands of dollars. The number of vendors we utilize has been decreased, allowing us to offer exclusivity and the ability to more effectively negotiate product pricing. We have modified many of our procedures and now pre-plan them, decreasing the number of wasted catheters and disposable supplies; this would not be possible without the cooperation of our physicians. Bulk purchases have also offered us the ability to dramatically reduce product cost if it is known that the product will be used in a timely manner. [For reprocessing] we use SterilMed Inc., located in Minneapolis, Minnesota. Initially there was great debate about the safety and efficacy of using a third-party reprocessor. After visiting their plant and spending time with their engineers and administrators, it was clear that reprocessing of EP catheters was a viable option. In the first year, our program saved several thousands of dollars, and other areas within the hospital saved even more.” Sinai-Grace Hospital, July 2005 “As we continue to provide high-quality care to our patients and physician referrals, we have investigated ways of containing and reducing our costs. We are currently in a RFP process, which was initialized by DMC Purchasing, to address cost reduction across a wide range of services and supplies. At the current time, we do not use a third party to reprocess. However, with such rapid increase in volume, this is a definite consideration for the future.” Baptist Health, June 2005 “We are always trying to keep our costs down. We resterilize our EP and ablation catheters (we use Alliance Medical Corporation). We buy in bulk whenever possible.” McConnell Heart Hospital at Riverside Methodist Hospital, May 2005 “We utilize a sticker and barcode scanning system, which is also incorporated into our nursing charting system to keep track of items used during cases. Our lab inventory is monitored closely, and this has enabled us to contain costs. We frequently negotiate with all of our vendors in order ensure competitive pricing on all equipment. We do not use a third party for reprocessing.” St. Mary’s Hospital Medical Center, April 2005 “In addition to keeping inventories low, inventory by consignment, and having multiple checks on the system to ensure all charges are appropriate, we negotiate directly with our device vendors to better our pricing. [Regarding reprocessing] No, we don’t; we have a single-use policy for all of our catheters.” Marion General Hospital, March 2005 “We are always re-evaluating our inventory to find better ways to cut waste. We update our custom packs on a yearly basis, work with our vendors for better contracts, and use a reprocessing vendor on items that meet guidelines for re-use.” MUSC Children’s Hospital, February 2005 “On-hand inventory has been greatly reduced utilizing par supply levels. When possible, similar items have been consolidated to a single vendor. We also participate in hospital-wide initiatives to reduce costs through reprocessing, single-vendor contracts, and the implementation and tracking of supplies through Pyxis. We use third-party reprocessing for diagnostic EP catheters and Nellcor SPO2 sensors. Ablation catheters are not approved for reprocessing at this time.” Central Baptist Hospital, January 2005 “Quarterly costs are reassessed, and changes in volume are accounted for. We have a corporate committee that meets quarterly to discuss Cardiac Rhythm Management. The EP lab manager watches EP catheters and supplies closely. We do not use a third party for reprocessing, but the hospital has a committee that is researching the possibility of reprocessing in the future.” United’s John Nasseff Heart Hospital, December 2004 “We are part of Allina Health System, which has been very aggressive in getting competitive pricing for implantable devices based on volume. Contracts vary, but are usually renegotiated every two years. We currently use SterilMed, Inc. for reprocessing, but Allina Health System is evaluating the top reprocessors. The goal is for all campuses to use the same reprocessor, maximizing savings.” Lancaster General Hospital, November 2004 “Our department shares a very unique database with our cath lab. Among its numerous capabilities, one thing we use it for is inventory monitoring. Each day our ordering personnel can access inventory information. The computer can tell us the count of inventory available on the shelves, whether or not we have reached our par level, and what items need to be reordered. Along with the database, we also have very aggressive vendor pricing for devices and other EP supplies. One other measure that has helped tremendously was the review of our salary structure. This has greatly improved our turnover rates. We currently use Alliance for the reprocessing of some diagnostic catheters. Our instruments and cables are sent to our in-house sterile processing department.” Virginia Mason Medical Center, September 2004 “Our hospital has a Lean Policy. All departments are held responsible to be cost efficient at all times. Recently we took a look at what supplies we had in stock and what was actually being used. Based on this, we were able to eliminate supplies that we seldom used. We elected to use two companies for most of our supplies. With the assistance of our purchasing and contracting departments, we were able to lower the cost of the supplies needed. Bulk purchases were made on higher cost items. A third party does reprocess certain supplies.”