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Supply chain lessons emerging from the coronavirus pandemic

July 15, 2020
Business Affairs Risk Management

Nationally, the savings potential from single-use device reprocessing in electrophysiology broadly is just under $900 million. $780 million could be saved in AFib procedures alone. However, reprocessing activities produce nowhere near this level of savings. Our studies suggest that, across all EP procedures, hospitals could more than double their EP reprocessing savings – and realize an additional $532 million in savings.

This level of economic infusion into the hospital supply chain would certainly go a long way towards producing the supply chain slack needed to address, as an example, a pandemic. However, this level of savings increase is only possible if the hospitals are successful in taking control of their supply chain and leverage reprocessing as a supply chain strategy. This means informing vendors that the clinical effectiveness and financial sustainability of EP labs depend both on close technical and clinical collaboration with the vendor AND on controlled, safe cost reduction strategies, such as single-use device reprocessing. In addition to maintaining clinical outcomes, cost control is vital to both superior patient care and the financial viability hospitals. In simple cost terms, if a hospital currently saves $100,000 a year reprocessing simple, inexpensive catheters in the EP, it could increase these savings to $300,000 by including mapping catheters and diagnostic ultrasound catheters.

Hospitals must look for technologies or solutions, both in the EP lab and beyond, that reduce costs and either reduce procedure time or improve patient care. The supply chain and cost challenges surfaced by the pandemic have shown us very clearly that the current cost realities are not sustainable for healthcare. There must be a new deal made with large manufacturers in order to create space and flexibility in the supply chain and to reduce vulnerability.

In summary:

• Do not entertain new technologies that add costs without demonstrably improving patient care.
• Demand that you get the full utility of the assets you purchase, which includes reusing single-use devices.
• Ask your key vendors to immediately start working with reprocessors to ensure their products can be reprocessed.
• Finally, take a look at your reprocessing program: Most hospitals only save about half of what they COULD save from reprocessing. Then work with your reprocessor to realize those savings.

About the author: Lars Thording is the VP of marketing & public affairs at Innovative Health LLC.

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