Put focus on suppliers
Iread your article “Supply-side economics” (Aug. 20, p. 24) with great interest. In Owensboro, Ky., we have been on the mission to reduce our costs since I arrived here three years ago. Last year was a great year as we found more than $7 million and the two previous years netted more than $5 million each. Owensboro Medical Health System is a 371-bed stand-alone hospital.
Certainly there are a great deal of savings to be had with supplies, but I’ve also found tremendous savings in maintenance agreements, service contracts, capital equipment buys and so on. OMHS has been using two GPOs and, of course, negotiating ourselves.
If the country wanted to save Medicare billions of dollars a year, simply make every supplier put a price on every product and charge every hospital the exact same amount. That would eliminate the giant hassle of getting a fair price. During the benchmarking process, I found knee implants that ranged from as high as $10,000 at one location to as low as $3,700 at another. Same exact product. That just isn’t right.
Hospitals spend billions on consultants, GPOs, benchmarking companies, data cleaners, etc. All that would go away if we were being treated fairly. It’s pretty simple … Obama care is going after the wrong part of our industry. They need to get the suppliers right.