Hospital Implant Management Innovation
Hospitals spend between 55% to 65% of their expense on implants and management. For instance, these expenses can be found in the catheterization lab, the Operating room, and the Women’s Center, among many other departments in a hospital. Yet, the documentation for the implants is managed on slips of paper with stickers.
Moreover, there can be 10-15 different manufacturers and representatives who have their specific management of documenting a case, providing that to a hospital to wade through and charge it correctly. Hospitals will have to ensure that they’re creating a PL to their contract pricing.
When we look at the problems hospitals face managing implants, it is generally a more significant issue than the C Suite or leadership expected. Some of the unintentional miscalculations can come from miscellaneous coding in the CDM for new items, or capitated implants, which some of those implants may or may not be used in a case. In any case, how do they track the implants off contracts?
If an implant is not on contract, in the charge master, or the item master, there can be 23 touch points between three departments. In addition, hospitals can have five individuals look at the paper to get the correct implant case. This game of telephone leaves plenty of room for error, mismanagement of the implant inventory, and inaccurate patient charges.
In a time when technology and automation are so prevalent, how do hospitals have consistent errors in their implant management?
Department 1: Circulating Nurse —The Operating Room
Once the case is completed, a circulating nurse takes the implant documentation and inputs the information into the OR computer. They document the charting data for implants used on the patient’s account. Delivers the slip of paper and puts it in the inbox for the charge nurse to manage.
Department 2: Charge Nurse — Administration
Typically, the inbox for that charge nurse is piled with an immeasurable amount of implant documentation that needs to be completed. However, filing the charge to the patient accurately isn’t streamlined. Once they receive the implant write up, they’ll need to look in the charge master file, find the correct charge number for that implant, and click on it for the patient to receive the correct charge.
Department 3: Purchasing Agent — Purchasing
Then the implant write-up makes it over to purchasing. The purchasing agent must manually review the slip and stickers to validate the contract pricing. Then they can create appeal in the Materials Management System.
There are many steps and opportunities for human error, which leads to mischarging the patient, loss of revenue for the hospital, and lower patient experience surrounding billing. Not to mention the inability to accurately manage the inventory and orders.
An Innovative Solution for Implant Management
Jim Ferch, the founder of Simplify OR, found a solution that benefits the hospital and streamlines the management of implants for all individuals who before managed just pieces of paper and stickers.
Jim’s experience includes working with AS400 for purchase requisitions. He developed a Demand-Driven Schedule module for an Aftermarket Automotive company in Alabama. Implemented software to streamline the order-to-manufacturing process for Rexnord. And Jim was employed as the director of supply chain for a healthcare system in a purchasing role.
His classic example of intrapreneurship within every organization helped him launch as a successful entrepreneur, leading him to found Simplify OR.
While being a supervisor and director at a healthcare system, Jim noticed daily issues where employees were chasing charge numbers and cases being done outside of implant contract costs. Their team had daily conversations where they tried to get peels back to vendor representatives. However, he noticed that the entire process was quite fragmented and siloed.
In healthcare, there are materials management systems, electronic medical records, and implant vendor contracts. However, none of those are connected. Jim looked at this process and went to the marketplace to find something that solved the interoperability problem that healthcare systems have between implant vendor contracts, materials management systems, and EMRs. What he found were software solutions that were fragmented. These would be complicated band-aids that would have to be glued together to streamline hospital implant management, making the process more cumbersome and leading to more errors.
So, Jim pulled on his experience with software and his love for automation, looked at the implant documentation and implant revenue stream, and automated it. He took the manual labor and potential management by four or five people and the 23 touch point process and created a logical back-end web application for hospitals.
How does it work?
The circulating nurse taps approve on the app, which automates taking that information and automatically updates the patient account charges and the patient account chart and creates an appeal in the hospital’s materials management system. It’s that easy.
Auditing Implant Management
Hospital leaders should audit their approach to implant management. The audit will identify if there are potential areas where human error can occur, find gaps, and determine if investing in an automated system will streamline that process—then understand how a proven automation software solution, based on an audit, can improve these errors, lost profit and close gaps.
When a hospital can be self-reliant with its data and standardizing that process is vital to success. This gives back the control of costs to maximize revenue, manage time used, and the output of effort. When systems are manual, hospitals maintain and manage failure work.
What Can Hospitals Expect As ROI by Automating
If we look at the manual process, we can expect it will take the circulation nurse anywhere from 10-15 minutes in the surgery suite to update the patient account chart. Then, that nurse walks to the charge nurse’s desk and hands her the implant write up. Let’s say that takes another 5-10 minutes.
The charge nurse, who has extensive knowledge and capabilities, spends their day looking up charge numbers, calling purchasing for the charge number, and waiting while the purchasing agent calls the vendor to troubleshoot the pricing. Finally, Patient Financial Services has to create charge numbers. The charge nurse loses most of her day managing all of these steps and ensuring they are completed accurately, which is lost time, and that time has high costs for the hospital.
The ROI hospitals can see a 10% or 15% improvement in revenue leakage, or missed cost savings, because hospitals are off-contract or not getting the correct pricing. In addition, hospitals will get back their lost time from the manual process, accurate accounting and inventory management, and greater visibility of gaps and mismanagement in departments that use implants.
Creating a Better Process for Hospitals
When hospitals look at the extensive percentage of spend attributed to implants, we have to look at the process in which the implant management is controlled. For example, if 55% – 65% of the total expenses come from implants due to a manual process, they need to decide if automation is the right fit to manage the leakage within the system.
Hospitals can start with an automation service like, Simplify OR to streamline and manage the process. With an automated system in place, hospitals have greater leverage to allocate time and funds to other initiatives within the organization. With these margin improvements in a hospital, they will inevitably maximize profits and radically decrease their costs.
Three Ways to Work with VIE Healthcare
1. Benchmark a vendor contract – either an existing contract or a new agreement.
2. We can support your team with their cost savings initiatives to add resources and expertise. We set a bold cost savings goal and work together to achieve it.
3. VIE can perform a cost savings opportunity assessment. We dig deep into all of your spend and uncover unique areas of cost savings.
For proven strategies to increase your hospital’s financial and operational performance — and to rapidly reduce your non-labor costs, schedule a call with Lisa Miller.