THE GREAT UNKNOWN Do you know how much it costs your facility to perform a total joint replacement?
The list price for a knee replacement back in 2016 was around $50,000, but administrators at Gundersen Health System's hospital in La Crosse, Wis., couldn't tell you what it cost them to perform the surgery. Not even an estimate. The actual cost astounded them: $10,550, including the surgeon's and anesthesiologist's fees, according to an efficiency expert, who for 18 months recorded every minute of every activity and took note of every implant, supply and medication, according to an account in last month's Wall Street Journal. In addition to discovering that they were marking up knee replacements nearly 500%, Gundersen was also able to pinpoint waste and cut inefficiencies, eventually saving 18% on the cost of joint replacement surgeries.
We asked Lisa J. Wied, MBA, vice president of clinical operations at the Gundersen Health System, to share some of her cost-savings ideas with our readers. Nothing exotic or earth-shattering, just the bread-and-butter basics of surgical economics.
- Standardize implants. Gundersen's orthopods were using a variety of implants, so they worked to narrow the choices in order to qualify for a reduced rate through a buying group. "When new surgeons come on board," says Ms. Wied, "we tell them that we want them to use these standards, even if they hadn't before. There's been no resistance."
- Examine your supply costs item by item. Gundersen's supply costs were pretty low to begin with, but there was one outlier: cement costs. They were using antibiotic cement, which costs more than antibiotic-free cement. The total joint surgeons weren't married to antibiotic cement, so Ms. Wied asked the purchasing department to find an antibiotic-free cement. "We now add the antibiotic ourselves," says Ms. Wied, "and that reduced our cost greatly."
