Case Studies

Cost Reduction at Caltholic Health Care West, Now Dignity Health

SITUATION
CHW has engaged our firm for assistance with physician preference item on a service area basis over the past 18 months.  During that time we have assisted the Northridge facility (a flagship for the organization), the Oxnard/Pleasant Valley facilities, the three Central Coast facilities, and are presently involved with the California Medical Center campus.

SOLUTIONS
In each engagement we have, in accordance with the timetable set by the facility management, analyzed present spending, identified cost reduction and organization improvement opportunities.  After assisting with creating medical staff awareness and participation, we then solicited competitive bids, proposal analysis, final contract negotiations and implementation, providing all medical staff presentations and budget analysis for each service area.

RESULTS
For each area the scope has varied. 

• At Northridge Hospital and Medical Center, our first CHW engagement, our focus was initially Orthopedic Implants, where a 58% cost reduction was achieved. We then assisted with Spinal Implants, and obtained a 52% reduction in net costs. Both involved no change in vendors and no volume loss due to dissatisfied surgeons, etc. We are revisiting orthopedic implants at this facility at this time for another round of price reductions.
• CHW-Central Coast (3 facilities), one of the challenges that had to be addressed was developing consensus between surgeons regarding product selection. We worked with the medical staffs, both individually and collectively, in a manner that allowed for the development of decision making processes that all agreed to. This was accomplished before vendor contracting was begun and allowed for excellent results for the facilities.
• California Hospital Medical Center was unique in that it had relatively low total joint replacement volume but very significant trauma implant spending. Using our combination of procedure based analysis and market benchmarking, we provided a program that resulted in very significant decreases in costs for both procedure types. Specifically trauma implant pricing decreased by nearly half with no change in vendors.

Please contact HFS Consultants for more information.