A New Spend Management Approach for Shoulder Replacement Surgeries

As COVID-19 prompted hospitals to suspend routine care and postpone elective surgeries, financial stakeholders scrambled for innovative ways to balance the books. At Rush University Medical Center, one part of its overall cost reduction effort came from a unique source—performing total shoulder arthroplasties— commonly known as shoulder replacement surgeries.

The key to reducing shoulder spend at the 671-bed facility is the cost of the artificial shoulder joint itself. It’s a physician preference item, or PPI, meaning that the Chicago-based academic medical center—like all hospitals and health systems—buys the medical devices that a surgeon prefers. That’s why streamlining costs and negotiating with suppliers was top of mind for Luis Forero, director of strategic sourcing and procurement at Rush University Medical Center.

“Overall, our goal is to reduce expenses at Rush. And traditionally, our goals were about $4-5 million per year. When COVID hit, we were asked to save about $8-9 million, and we exceeded that,” Forero says.

By taking a collaborative approach to problem solving, Rush University Medical Center achieved a 21% reduction in the hospital’s shoulder replacement spend, delivering $800,000 in savings in less than one year.

Learn how Rush University Medical Center took an innovative approach to cost reduction and partnered with a healthcare performance improvement company to achieve a 21% reduction in the hospital’s shoulder replacement spend, delivering $800,000 in savings in less than one year. 

CQO Tie-in: Rush reduced shoulder replacement spend without compromising quality of the devices they used for shoulder replacement surgeries.


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