Not-for-Profit Hospitals Cost-Cutting Isn’t Keeping Up with Revenue Decline

Not-for-Profit Hospitals Cost-Cutting Isn’t Keeping Up with Revenue Decline

Modern Healthcare reports that not-for-profit hospitals “have begun to rein in expenses, but it’s not happening as fast as revenue growth is dropping.”   The article notes the efforts hospitals have engaged to reduce supply costs, but AMDR urges hospitals to look at their existing devices.

Medical device reprocessing and remanufacturing extends the life and value of existing hospital devices – typically, the cost of a reprocessed device is half that of buying new.  The economic impact reprocessing has brought to the medical device market has been to force manufacturers to lower their prices on new devices to compete.

But we have a long way to go.  The media often focuses on drug costs, but medical devices should not be ignored.  Hospitals have helped drive up costs by “purchasing redundant, expensive medical equipment…” according to Forbes.  By maximizing a reprocessing program, hospitals can advance the triple aim of increasing quality, reducing costs and improving patient care.

To maximize the benefits of reprocessing, AMDR urges hospitals to:

  • Treat spent single-use devices as assets, not garbage. Treat them with care, put them in the bin to be reprocessed.  Those spent devices have more life in them, and by reprocessing, you can keep the dollars that would otherwise be spent buying more, new single-use devices in-house, to hire or retain nurses, buy other equipment, or expand indigent care;
  • Stop vendor interference. often sales reps prefer you throw out those spent single-use devices as they make more money the more the hospital buys.  Stand up for your facility’s reprocessing program and make sure all vendors respect it.  The devices are hospital property – they should not be taken, disposed of, or shuffled around on the shelves by any competing sales rep to discourage their reprocessing; and
  • Demand transparency in contracting from sales reps. Do not restrict your ability to reprocess, as it potentially restricts your savings.  Look carefully for minimum purchasing requirement clauses.  Sometimes hospitals are presented with new, lower pricing from the device manufacturer — but sometimes the catch is often that hospitals must buy more new devices, thereby sometimes eroding potential savings from reprocessing.

Check out AMDR’s past post on maximizing hospital assets.

By | 2018-10-01T23:14:18+00:00 October 8th, 2018|Blog|0 Comments