Study points to physicians as catalysts for savings

A national health care alliance suggests hospitals can save money by enlisting doctors in supply cost-cutting measures.

By Mike Norbut, AMNews staff. Feb. 10, 2003.

Physicians can help their local hospitals save millions of dollars each year by keeping a keen eye on supply costs and cutting back on the number of suppliers they deal with, according to a recent study by health care cooperative, VHA Inc.

While hospitals have been wary of the idea of standardizing supplies, especially in the operating room, for fear of physician backlash, Irving, Texas-based VHA and physicians said facilities can minimize the negative impact by enlisting doctors' participation in the cost-cutting effort.

"If doctors are involved, then I think the process can work and be a benefit to society," said Peter C. Amadio, MD, an orthopedic surgeon and professor of orthopedic surgery at the Mayo Clinic in Rochester, Minn. "It's very important that the physician be closely involved, because ultimately, these things being purchased are for the benefit of the patients."

Supplies, which comprise hospitals' second largest line-item expense after labor, were identified by the study as a category in which costs could be dramatically reduced simply by applying the basic principles of purchasing. This notion was especially true in the operating room and among orthopedic surgeons and cardiologists, two of the busiest and more expensive specialties.

Just as warehouse clubs are able to offer lower prices by buying in bulk, a hospital limiting the number of manufacturers it deals with can negotiate lower costs by purchasing greater volumes of equipment, the study said.