Optimizing Orthopaedic Trauma Implant Pricing Through a Data-Driven and Surgeon-Integrated Approach

Abstract

Objective: 

To determine if market-based pricing could be coupled with surgeon integration into negotiation strategies to achieve lower pricing levels for orthopaedic trauma implants. A secondary aim was to identify specific types of implants that may offer larger opportunities for cost savings.

Methods: 

Market pricing levels were reviewed from two industry implant databases. This information was used by surgeons and supply chain management (SCM) at our institution to select appropriate target pricing levels (25th percentile) for commonly used orthopaedic trauma implants. Target price values were provided to the existing 12 vendors utilized by our institution with a clear expectation that vendors meet these thresholds.

Results: 

Benchmark modeling projected a potential savings of 20.0% over our prior annual spend on trauma implants. Following two rounds of negotiation, savings amounted to 23.0% of prior annual spend. Total savings exceeded 1,000,000 USD with 11 of 12 vendors (91.7%) offering net savings. Total percent savings were highest for external fixators, drill bits, and K-wires. Plates and screws comprised the greatest proportion of our prior annual spend and achieved similar savings.

Conclusion: 

A surgeon and supply chain coordinated effort led to major cost savings without a need for consolidation of vendors.