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Surging prices for supplies are intensifying the pressure on hospitals already reeling from skyrocketing liability, staffing and technology costs. The prices for certain supplies far outstrip general inflation and, executives say, could undermine the financial viability of some service lines. That's forcing some hospitals to rethink their purchasing strategies.

Background: Hospital revenues for orthopaedic operations are not keeping pace with inflation or with rising hospital expenses. In an attempt to reduce the hospital cost of orthopaedic operations by reducing the cost of operating-room supplies, we developed a Single Price/Case Price Purchasing Program for implants used in total hip arthroplasty, total knee arthroplasty, and total shoulder arthroplasty as well as for arthroscopic shavers and burrs, interference screws, and bone-suture anchors., Methods: The Lahey Clinic asked orthopaedic vendors to supply all instruments, implants, and disposable items related to these selected products for one single price per unit or case. For example, a single price for total hip arthroplasty implants included instruments, acetabular cups, acetabular liners, acetabular screws, femoral stems, femoral heads, and stem centralizers, if required. The hospital implemented the Single Price/ Case Price Purchasing Program with a competitive-bid request for proposal. Surgeons evaluated the responses to the bidding process, and they made final decisions on product selection., Results: The Single Price/Case Price Purchasing Program at the Lahey Clinic was successful in reducing the cost of orthopaedic implants and supplies. In the present article, we could not disclose the specific prices that we agreed to pay our vendors. The specific cost reductions were 32 percent for hip implants with a change of vendor, 23 percent for knee implants without a change of vendor, 25 percent for shoulder implants with a change of vendor, 45 percent for arthroscopic shavers and burrs without a change of vendor, 45 percent for interference screws without a change of vendor, and 23 percent for bone-suture anchors without a change of vendor., Conclusions: The Single Price/Case Price Purchasing Program at the Lahey Clinic allowed the hospital to reduce its cost of orthopaedic operations by lowering the cost of operating-room supplies. This cost reduction is important in a health-care economy in which hospital revenues per unit of service or care are decreasing.

A cooperative effort between physicians and facility administrators with respect to purchase of materials and services can reduce costs dramatically and provide clinical benefits, as well. At Hamot Medical Center in Erie, Pa., orthopaedic physicians and hospital administrators developed a process for selecting a single source of implants used in total joint replacement procedures. As a result, the medical center was able to enter into a volume purchasing contract anticipated to save the medical center about $630,000 over the two-year period of the contract.

Although the experience of the Hospital for Joint Diseases is unique in terms of size of market controlled, the cost-containment techniques described above are applicable to almost any hospital. A crucial factor in any such process is enlisting the active participation of the surgical staff at every stage. On the basis of the success, this cost-containment procedure is being applied to other components of the medical device purchases.