Disruptive Technology Provides Pricing Transparency Between Hospitals Drives Significant Savings!
I attended a fascinating session at the Becker’s Roundtable conference for CEO/CFO/CIO’s. Being a technology geek, I love hearing and seeing how technology is improving the cost of providing healthcare. The power of data can truly be amazing as in this example!
For years, hospitals have been isolated from each other on how much they are paying for devices from vendors. David Ricker and his buddies got together and said “Why is that?”, and then did something to change it. They formed a company called BroadJump that provides easy-to-use software that allows a hospital to see how much they are paying for a device compared to other anonymous hospitals. BroadJump’s software provides an apple-to-apple comparison on how much they are paying for a specific device and compares it to other hospitals.
Ken Wheat, SVP & CFO, of Eisenhower Medical Center co-presented on how BroadJump’s software has helped save them money. The general theme of the presentation is that with the help of BroadJump’s software it helped bring transparency to where they were over paying for devices. Armed with this information, it allowed Eisenhower Medical Center to negotiate the price for the devices and supplies down and save money.
How much variation exists in cost for devices and supplies? For a pacemaker, the software reported a 90% variance in the cost for specific type of pacemaker. For surgical tape, there was a 27% variance in cost for the same exact surgical tape.
As I listened to the presentation, I kept seeing correlations between BroadJump-and-Hospitals and with TrueCar-and-Consumers. TrueCar provides transparency on how much others are able to buy the car that you are looking to buy. Armed with this information you are able to get better pricing on the car you want.
Perhaps the phrase “Disruptive Technology” has become a cliché that gets used to often. In this example it’s certainly warranted. To paraphrase a comment from David, we disrupted an area that was in need of disruption. This disruption shifts power and control from vendors back to the hospitals. Our healthcare system should be thanking companies like BroadJump for helping them bring significant savings to supply chain costs, and be more supportive of other companies who can do the same.
Transparency and data bring big financial results. “Why is that?” It’s because for too long hospitals have been in the dark and have not had easy access to quality data. Quality meaningful data empowers decision making and saves money. Investing in systems that provide transparency brings visibility, which drives value. The power of data will continue to have big time results until transparency becomes the norm.
Mobile Aspects brings visibility and transparency into the usage of devices and supplies in surgical areas. Having quality data on physician usage and preferences and being able to compare that to others can empower hospitals and drive decision making. One discussion we are having with many of our customers is utilizing our high quality data to determine physician costs and comparing to their outcome databases.