ECRI’s Benchmarking solution identified $580,000 in potential savings
Problem
A long-standing ECRI client for over 19 years grew and expanded to a 600 licensed bed full-service community hospital between three campuses and 30 affiliate hospitals. As they continued to grow, the need to have a holistic benchmarking solution with timely spend and pricing analytics was more pivotal than ever. “The health system utilized other tools but found they lacked the depth of insights and ongoing cost saving opportunities found in ECRI’s solutions,” stated the hospital’s material management director.
Additionally, some of the affiliate hospitals—especially smaller, rural hospitals—were facing challenges in securing favorable pricing from vendors. These smaller hospitals were often placed in lower pricing tiers, which resulted in them paying higher prices compared with larger hospitals. They wanted to benchmark their pricing and validate that they were getting competitive prices on necessary supplies and equipment.
Solution
The hospital utilized ECRI’s Benchmarking solution for supplies and capital to compare their current pricing with more competitive market rates and utilized Alerts Workflow to speed response time with early warning of product recalls. Armed with data and insights, they were able to approach vendors and negotiate better pricing, even for their smaller affiliates. “We try to submit every capital purchase through ECRI,” stated the material management director. In one example, if a hospital was placed in a Tier 1 pricing structure, they would advocate for that hospital to be moved up to Tier 3, where better pricing was available. In some cases, they would explore local contracts to ensure that their smaller hospitals received more favorable pricing. This centralized approach to negotiating allowed them to improve pricing across multiple facilities.
Result
By leveraging ECRI’s proposal analyses for supplies and capital, the hospital was able to consistently secure better pricing, including for its affiliates. For example, ECRI conducted four proposal analyses that identified potential savings of over $580,000, with the largest savings coming from vascular/aortic pricing. Alerts Workflow automated recall management armed them with easily accessible information to share with the department of health in the event a recall was audited.
The hospital was able to negotiate better pricing with vendors, often improving their rates significantly. As a result, the hospital and its affiliates saved money and ensured that even the smaller hospitals could benefit from the same competitive pricing that larger institutions received.
ECRI identified over $580,000 of potential savings, which enabled the hospital to secure better pricing.