Software coordinates surgical implant orders

For hospital administrators, the process of procuring surgical implants and tools and making sure they are within budget can be complex. Medical-device representatives talk to surgeons about what they'll be bringing to a surgery. But administrators are often in the dark about what tools were actually used during a procedure.

If administrators find out after a surgery that a tool or device used was off-contract or more expensive than anticipated, the hospital then has to haggle with the vendor over price. This takes time and slows the payment process.

“It is a constant problem trying to reconcile all that stuff,” said Adam Higman, vice president at Soyring Consulting, a St. Petersburg, Fla.-based healthcare consulting firm. “Depending on the institution and the relationship with the surgeons and the representatives, who takes the fall (for the charges) can be variable.”

Responding to this confusing situation, Amin Rahme founded Surgery Exchange to hold device sales representatives accountable for what they bring to a surgery so that any off-contract items can be approved ahead of time. Surgery Exchange's software requires them to pre-register all items with administrators, and allows surgical staff to record which tools and implants they use during surgery.

Those items then can be reviewed, and if necessary, analyzed by contract compliance administrators before a purchase order is approved and sent through the platform. Compliance staff members are kept in the loop about potential supply changes and off-contract requests throughout the process, and are able to discuss any discrepancies with vendors.

Sales representatives often bring nearly $100,000 worth of devices to a surgery, but often use only a few thousand dollars' worth of those products because surgeons don't often know what sizes or components they'll need until they open a patient up, Rahme said.

“Sometimes the surgery requires things that weren't planned before. That's OK,” he said. “But with our software, there are no surprises.”

Because implant surgeries typically are scheduled at least a month in advance, Rahme believes there is more than enough time for vendors to plan what products they would like to bring to the hospital. Even though it takes them extra time to log items through Surgery Exchange, they will get paid more quickly because there's less reconciliation to be done after surgery, Rahme said.

Atlanta-based Surgery Exchange also requires surgical staff to record the lot numbers of items used during surgery. That can be helpful for hospital officials in case of a product recall.

Software currently on the market helps providers with scheduling, purchase orders and materials management. But those products don't handle the “bill-only” reconciliation process. Bill-only happens between scheduling and accounts-payable—two departments that don't necessarily communicate with each other and have little support for this process.

“We've got all these systems in place, but the unique challenges of the bill-only process fall mostly outside of the systems that are in place now,” Rahme said.

Four hospitals currently use the Surgery Exchange system, which was launched in January: Huntsville (Ala.) Hospital; the two hospitals of the Leesburg-based Central Florida Health Alliance; and Sarasota (Fla.) Memorial Healthcare System.

Rahme estimates Surgery Exchange saves hospitals an average of about 2.5% in supply costs. Beyond that, the company touts its ability to significantly reduce the time it takes hospital staff to reconcile bills for surgical tools and devices.

For Thomas Fender, vice president of the surgical service line at 876-bed Huntsville Hospital, that means freeing up his staff for more important tasks. He said he expected surgical-device vendors to push back on adding new software to their workflow, but he hasn't gotten any negative feedback yet.

“It creates transparency and clarity of communication and accountability,” Fender said. “There's no place for anybody to hide, because everything is out there. There's little excuse for any of us to drop the ball.”

Right now, Fender is using Surgery Exchange only for joint products, which represent about 125 procedures a month at his hospital. He's rolling out the software for spinal implants next and has plans to eventually use the system for all implant surgeries.

Rahme wants to expand Surgery Exchange and its holding company, MedTech Exchange, to support the total episode of patient care and help hospitals reduce readmissions. He said his company has a strategy and partners to implement that plan.