Why Cross-Referencing Matters When Benchmarking Medical Devices
Considering the complexities of the modern healthcare ecosystem and the ever-present push to cut costs, hospital supply chain staff are always looking for ways to rein in clinical spend. One underutilized way to do this is through cross-referencing when benchmarking medical devices and clinical products.
What Cross-Referencing Looks Like
To understand what cross-referencing means in this context, consider how hospitals procure clinical supplies and equipment. Hospitals purchase clinically-specific products with clinically-specific uses. They can’t always substitute a similar-looking or similar-functioning item. In order to switch or substitute, hospitals need items that meet all the same clinical needs.
When supply chain staff goes to market or starts a sourcing project, they hear a lot of noise from vendors. Vendors will say that their products are unique or different in an effort to drive purchase decisions, but often this is just marketing hype rather than real differentiation.
Cross-referencing, then, is the process of evaluating products to find all clinically equivalent products in a given category. It examines factors such as:
- Clinical indication
An 8mm screw and a 9mm screw, for example, aren’t clinically equivalent. Clinicians need specific sizes, and substituting simply isn’t an option. The same goes for a titanium hip versus a ceramic hip.
Cross-referencing is just as much about knowing what items aren’t clinically equivalent as it is determining which items are.
Why Cross-Referencing Matters
Discovering clinically equivalent products can drive immediate cost savings. Many products will have a clinically equivalent variant that’s less expensive, even at list or GPO price. Once these are identified, supply chain can transition to less expensive clinically equivalent products, reducing clinical spend and saving the hospital money.
There’s also a deeper level of savings to discover. Effective cross-referencing can help when negotiating price points, too. Supply chain staff often don’t stop with list or GPO prices. They negotiate with vendors directly. To do this, they need to have better comparative data.
Supply chain teams can achieve a boost in negotiating power through benchmarking with Lookup by Curvo, discovering what other hospitals are paying for a given item.
Another component of this comparative data is identifying and benchmarking clinically equivalent products. For example, supply chain can power up negotiation skills with Vendor A by pitting them against the real (lower) price for an equivalent product from Vendor B.
What A Supply Chain Team That Doesn’t Cross-Reference Clinical Products Looks Like
Cross-referencing matters the most when working on standardization or switching products. If a supply chain team doesn’t have the bandwidth to do more than a project or two a year, there may not be a strong need for cross-referencing. However, using Curvo, hospitals can also realize gains in RFI and RFQ scenarios.
What are the dangers or missed opportunities for a supply chain that isn’t cross-referencing? For organizations that have the bandwidth (or could have it) but aren’t cross-referencing, one of the biggest losses is knowledge and negotiating power. Most supply chains are using some form of benchmarking tool. But some of these tools don’t have cross-referencing ability. They are unable to match a product to another one that’s clinically relevant. The same goes for a tool that doesn’t dynamically update as new products are added. Without a smart and dynamic benchmarking tool, supply chain teams lose much of the knowledge they need for negotiating power.
Today’s supply chain teams that aren’t using a clinical spend management solution must follow a laborious, manually intensive, convoluted process to attempt anything resembling this. It involves a whole litany of steps and processes:
- Multiple spreadsheets
- Requests for information from vendors (including cross-reference information)
- Price lists
- Historic utilization charts
- Calculation of future spend
On and on the list goes, and all this data is processed and compared manually. And we haven’t yet mentioned the black hole of tiered pricing, where prices can change based on percentage of spend and guaranteed spending thresholds.
It’s a messy, manual process with plenty of room for improvement. This is where Curvo can help hospital supply chain teams.
How Curvo Simplifies and Automates Cross-Referencing
Curvo’s powerful solutions simplify and automate the cross-referencing process, saving your team time and energy. Take this RFQ example for biologic mesh. Curvo pulls in all the offers at all the varying pricing tiers, demonstrating how much savings (or additional spend) a given quote would result in. Curvo takes detailed, hard-to-read data and turns it into something that’s visually appealing and, most importantly, actionable.
In addition to this high-level overview, Curvo also gives you the ability to do scenario modeling. You may already know or suspect that surgeons won’t be willing to move away from certain products. In Curvo’s scenario modeling tool, you can exclude certain products or force certain ones to specific vendors. The visualizations here make it easy to see whether you’ve made percentage-based market share commitments to unlock various pricing tiers.
Curvo makes these and other laborious manual cross-referencing processes nearly automatic. Your supply chain team can gain near-instant insights and gain the information they need to better negotiate with vendors and suppliers.
Automate Manual Cross-Referencing With Curvo
For modern health systems, cross-referencing is simply not an option. It’s a necessary process to rein in unnecessary clinical spend. And while cross-referencing has always been associated with manual effort and countless spreadsheets for supply chain, it doesn’t have to be that way.
To learn more about cross-referencing when benchmarking, read our success story with Health Future to find out how Curvo’s real-time scenario modeling and trend-spotting, fast analysis, and benchmarking helped the organization achieve $2.8 million savings (combined with other initiatives) within the first year. View the success story here.