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Going Digital to Lower Health Care Costs

In an operating room in Colorado, a nurse frantically records thousands of dollars of orthopedic devices on a piece of paper as they prepare to turn the room over for the next case. Unfortunately, this manual recording process is not unique to this particular hospital. As a past medical device rep I experienced these inefficiencies in countless operating rooms across the country.

Current methods for tracking devices are antiquated with little to no analytics. Orthopedic operating room nurses record used devices such as plates, screws, and drill bits on a piece of paper, and sometimes even use the tag attached to the surgical gown. This process can take nurses up to 10 minutes per procedure and often contain inaccuracies. Most importantly, this data is not leveraged for actionable analytics.

Dr. David Laverty, an orthopedic surgeon in Austin, estimated that nearly 20% of tracking forms are inaccurate. Laverty credits this to illegible writing, inaccurate SKU’s, and unorganized paperwork, which ultimately results in increased amounts of administrative tasks, and poor transparency of implant costs.

In order to curb costs and cut out waste, providers must leverage digital methods to track and analyze medical devices that are both used and wasted. Optio Surgical, a Colorado based medical device software company, is attacking these inefficiencies head on. Optio tracks every orthopedic device used in surgery and provides actionable analytics on what was used, what was wasted, and opportunities to reduce costs.

Dr. Bill Quirk, a Colorado Physician, notes, “Innovative and cost-effective products are few and far between in my world of clinical medicine. Optio’s software platform creates financial efficiencies, improves OR throughput, and increases patient safety.”

The consequences of inefficient and inaccurate tracking are severe. Aside from not complying with the FDA’s UDI Requirement  to track Class II and Class III devices, failure to track orthopedic devices leads to increased cost and waste due to a lack of transparency; evident in the following examples:

  • The list price of a total hip implant has increased nearly 300% in a 13-year period with very little to no innovation.
  • An estimated $36 million in hip and knee arthroplasty implants are wasted in the U.S., and waste occurs in 30% of orthopedic trauma cases.
  • The American Journal of Orthopedics noted a single hospital system spent $34 million just on orthopedic implants; $634,668 was lost simply because of wasted implants.

As we usher in 2018, one must ask why the health care system hasn’t embraced the digital age to automate device tracking? Firstly, recording hundreds of different loose screws, plates, hips and knees in a single day across multiple vendors with different product descriptions and SKUs is no simple task. Secondly, orthopedic device companies don’t necessarily want products tracked as a reduction in cost and waste means a reduction in profits.

Optio Surgical is starting with orthopedics to track devices and reduce costs as it is very difficult to track, extremely expensive, and common; 6 million procedures annually. Short term plans are to expand into other specialties such as cardiovascular, plastics, and neurosurgery. Just one hospital calculated that it wasted $2.9 million during neurosurgery procedures.

It is estimated that the U.S. healthcare sector can save $300 billion by adopting digital practices due to the extraordinary efficiencies that are created. As our annual health care expenditures quickly approach 20% of GDP, it is time that we leverage digital technologies and algorithms that are ubiquitous in other industries to effectively curb health care costs.

 

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