Wednesday, October 12, 2011

Fiscal Responsibility in Orthopedics

October not only introduces the expected autumnal change in climate resulting in cooler temperatures, shorter periods of daylight, and vibrant color changes to foliage, it also signals the start of the 2012 budgeting season for the orthopedic department.

As part of our "formalized" orthopedic service line at St. Joseph's Hospital, we are fortunate that this process for us has evolved to be a true partnership with the hospital, and a genuine multidisciplinary team effort which involves the physicians, nurses, physical therapy, and many other clinical support personnel. 

Gone are the days where the hospital holds sole decision-making authority when it comes to projecting operational costs (those recurring on a regular basis), and capital costs (purchase of equipment).  The difference between these two types of expenditures can easily be correlated to running or managing the finances of a household.  Operating costs associated with household management include the groceries purchased on a regular basis, as well as the payment of monthly utility bills.  In orthopedics, operational costs include the supplies and implants used during surgical procedures.  Capital costs associated with a household include the replacement of appliances that are at the end of their life (refrigerators, washers/dryers, snowblowers) or items that are new purchases (an entertainment center or furniture). In orthopedics, capital items include equipment that needs to be replaced such as drills, instruments, surgical tables, or specially designed hospital beds or chairs, as well as new technology-type items that keep our program up-to-date and able to deliver the highest quality patient care.

As physician leaders of this service, we take this responsibility very seriously. Escalating health care costs, specifically the rising cost of medical supplies and devices, are the responsibility of everyone to keep controlled. We work exhaustively with the Orthopedic Service Line Administrator to accomplish these very lofty goals.  

To accomplish this challenging task, we, along with the service line administrator, have hardwired specific processes into our service line management:

**Monthly product standardization meetings to explore new and alternative products that have the potential to improve quality while reducing costs

**Supply and implant control--no vendors, surgeons, or staff bring new items into the OR without prior committee review and approval

**Periodic implant re-bidding process for hip and knee components to ensure that costs remain controlled

**Scheduled replacement of equipment only when warranted and at end of life

**Review of all newly available orthopedic technology and planned addition if it makes sense from a quality and patient care standpoint as opposed to a passing fad

We have had significant positive results in controlling costs with this approach.  Our successful management of the orthopedic service line supplies and implants garnered recent national attention.  Our process was recently presented at the Managing Today's OR Suite Conference in Chicago.  A follow up article relative to this topic will be published in their national journal later this year.

Rest assured that we manage the hospital's precious resources for orthopedics in a fiscally responsible manner to ensure that the highest quality care is provided at the lowest cost. The effort in this regard is never considered finished and continues on an ongoing basis.  Our goal is to strengthen the orthopedics program at the hospital both today as well as into the future.

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