It’s a critical time for healthcare leaders as they face new challenges from the COVID-19 pandemic and continued declining reimbursements. In a recent Modern Healthcare article, ECRI’s Executive VP and COO, Tony Montagnolo, was featured alongside other industry leaders on the topic of COVID-19 and the market pressures thought to be reshaping procurement. Here’s what he shared with Modern Healthcare on his vision and strategies for reaching value-based care goals and wisely preparing your health care system for the future.
Ethylene oxide (EtO) sterilization has been in the news a lot lately, and healthcare has much at stake. According to officials at the U.S. Food and Drug Administration (FDA), approximately 56% of all critical medical devices are sterilized using industrial EtO sterilization. Currently, there are no validated industrial alternatives, so additional closures of EtO processing facilities would have the potential to impair the U.S. healthcare system.
While some state legislators are considering bans on industrial EtO sterilization facilities, healthcare leaders, manufacturers, and FDA have been reviewing options to ensure the availability of sterile medical devices and supplies necessary for patient care.
Purchased services are seen as the next great savings frontier in healthcare—and with good reason. Spend on purchased services accounts for approximately 30 to 35 percent of a hospital’s non-labor expenditures. Tapping into even a small portion of that spend can lead to significant financial savings. However, purchased services contracts are complex and the legal language can be difficult to understand. What seems like a competitively low price may actually result in unexpected charges and poor performance outcomes.
Over the past few years, I’ve worked with many hospitals and health systems on purchased services contracts and have seen my share of “the good, the bad, and the ugly.” What are some of the recurring themes? Some vendors bury language that is advantageous to their business. They omit key information and make performance management difficult for the hospital. While every purchased services contract is unique and every circumstance is different, it is possible to mitigate common traps and omissions that can lead to unexpected costs, poor performance, and no remedy when things go south.
Looking for service contract pitfalls to avoid? Check out my top three purchased services contract problem areas to gain the insight you need to improve the quality of services and drive savings across your organization.
Topics: Supply Chain