2016 HealthConnect Ortho PPI Piraino

The Single Manufacturer Model

for Orthopedic Implants

Stephen Piraino

Director, Corporate Purchasing &

Supply Chain

Einstein Healthcare Network

Financial Disclosure

No Financial Connections or Affiliations to disclose

Insert Pictures/Tables/Charts Here

Health System Overview

Clinically Integrated Network

Einstein Medical

Center Philadelphia

(533 acute beds)

Einstein Medical

Center

Montgomery

(171 acute beds)

Einstein Medical

Center Elkins Park

(66 acute beds)

Moss Rehab

Integrated in

inpatient facilities

13 ambulatory

centers

Four hospital

partnership

programs

10 ambulatory

sites across

region,

with more sites

planned;

31 primary care

sites

Health Network Statistics

Total Revenue $1.1B

Licensed Beds 995

Employees 8,500

Fellows and Residents 410

Employed Physicians 535

Independent Physicians 668

Admissions 43,000

Outpatient/MD Practice Visits 1.4M

Emergency Department Visits 158,000

Academic Components

ACGME Programs 23

Fellows and Residents 410

Tertiary and Quaternary Clinical Capabilities

Trauma Level Level I

NICU Level Level III

Health Network Workload

Payor Mix

Observations: Financial Impact


Department of Orthopedics

• 13 Employed Orthopedic Surgeons

• Orthopedic Offices located at all 3 Hospitals as well as several outpatient sites

• Blue Distinction Center for both Hip & Knee Replacement as well as Spine Surgery

• Procedures are done across all 3 Acute Care Hospitals

• Majority of Total Hip & Knee Replacement Volume is done by 5 Surgeons

• Majority of Spine Surgery is done by 3 Surgeons


2015 Procedural Volumes

• Primary Knees: 440

• Revision Knees: 75

• Primary Hips: 276

• Revision Hips: 61

• Shoulders & Elbows: 20

• Joint Replacement Procedures Total: 872

• Single Manufacturer for Total Joints

• Single Manufacturer for Spinal Fusion

Single Manufacturer Model

How we got there, and Held the Gains

• Formal Request for Proposal (RFP) Process

• Financial Proposals

• Oral Presentations

• Detailed Review of each Manufacturers Clinical Technology and Philosophy

• Review of each Manufacturers Future Product Pipelines

• Process took approximately a full year

• All surgeons fully participated and then voted

• Dynamic Leadership by Hospital Administration to engage the Department to Initiate Change

• Strong Leadership by Chairman of Orthopedics in support of the change to one vendor

• Ongoing Support by Chairman of Orthopedics to continue Single Manufacturer for 8+ years

• Established Process for New Product Requests to run through Surgical Value Analysis Committee


Operational Advantages

• Economics:

• Due to 100% Market-share commitment we have very aggressive invoice pricing

• Also have manufacturer rebate program for maintenance as well as growth

• Pricing regularly benchmarked by ECRI and IMS as well as GPO confirms best in class

• Purchasing/Supply Chain Operational Efficiencies

• Line Item Component Pricing

• Revision Procedures Pricing Advantage

• 5600 Total Joint Implant SKU’s in Lawson (Recently Added 5000 SKU due to Vendor Merger)

• 1730 Spine Implant SKU’s in Lawson

• Less Items to Update when price changes are negotiated (Lawson, Cerner, Siemens)

• Less Manufacturer Sales Reps proposing New Technology



• Operating Room Efficiencies

• Training: OR Nurses know the trays and instruments and can immediately tell if anything is missing

• Procedural Interoperative flow: Due to standardization cases run more smoothly

• Interoperative EMR Documentation & Patient Charges: More streamlined and less choices in Cerner

• Less “Bill Only” to Manage

• Manufacturer Rep Labor: 1-2 reps on-site every day assisting

• Procedure Planning: One rep to call for questions

• Relationships: Stronger relationships built with manufacturer catch Add-On cases more quickly



• Sterile Processing Department Efficiencies

• Instrument Tray Usage is More Predictable

• Standardized Tray Issue Process

(Typically 6-7 Trays for a Total Knee/Hip Procedure)

• Missing Instruments are Diminished

• Fewer Loaner Trays are Delivered; Back-up Trays are on-site

• Less Trays are Wrapped, Not Used, Unwrapped, Picked Up, Returned following week

• Less Storage Space Required for Trays


Inventory/Storage Advantages

• Less Implant Inventory to Keep On Hand (Consignment)

• Only One Manufacturer vs Many

• Less Consignment Inventory Agreements to Manage

• PAR Levels

• Cycle Counts with Reps (Semi-Annual Physical Inventory)

• Expiration Dating Checks

Information Systems

Structure and Interoperability/Interfaces

• Lawson Purchasing/Contracts System – Cerner Millenium ORIS – Siemens Patient Billing System

• Bi-directional Interface Between Lawson & Cerner

• Lawson sends all new item master additions

• Lawson sends all existing item changes

• (Lawson Item #, mfg name, mfg cat #, vendor cat #, Description, UOM, price)

• Cerner sends supply usage (Currently not using this data)

• Cerner uses Lawson Item # on Preference Cards and Pick Lists

• Cerner Interface with Siemens Patient Billing System

• Cerner sends Supply Usage by Patient by Procedure using CDM # to Siemens

• Accurate Cost Per Procedure Reporting by Physician

• Minimize “Free Text” Charges

• Current OR Lawson Item Master Percentage > 95%

Systems Integration

Interface Diagram

Cerner MilleniumOR Information

System

OR Room 1

OR Room 1

OR Room 1

Documented Supplies and Implants Used

Lawson Perpetual Inventory Location

(IC12)Usage Transactions

Lawson Perpetual Inventory Location

(IC12)Reduce Stock on Hand

Stock below Reorder Point?

Lawson reorders more inventory up

to stock level (MAX)

Yes

Wait for additional Usage transactions

No

Goods Received

Increase Stock On Hand

Lawson PAR Location (IC81)

Non-Documented (Non-Billable) Supplies Used

Cerner-Lawson Inventory Model

Inventory Manager uses

Handheld scanner to count stock

Stock on hand below PAR

Lawson creates Requisition

Yes

WaitNo

Goods received

No Transactions

pass from Cerner to Lawson

Questions

2016 HealthConnect Ortho PPI Piraino

Documents

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