Structuring a Spine Program

Joe Cantlupe, for HealthLeaders Media , August 15, 2011
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Several years ago, the UCSF Medical Center projected a loss of $13.9 million in spinal implant costs. When Mckinney became director of the spine program, one of her first tasks was to help the healthcare system unravel the problems. Over time, the complicated spinal implant revenue issues were identified and simplified, and costs were reduced, she says.

The hospital system worked on a plan that enabled physicians and administrators to work in harmony to reduce costs under a revised committee implant-purchasing structure, which wasn't always easy or comfortable, Mckinney says. The hospital system has now reversed its losses and has a competitive price index better than 83% of hospitals with implants, she says.

In carrying out the plan, a physician champion was identified to help create a formula and organized plans for negotiating with vendors. A procurement team was identified to evaluate cost and utilization of items, Mckinney says.

"We assigned the pricing so we would have specific information, have transparency, and share that information with physicians," she says.

"We discussed opportunities to improve [spending and lowering costs] on some of the higher-cost items," Mckinney says. It was important to have an administration and physician team to evaluate working with vendors, she says. Too often, physicians had worked with vendors to develop their own schedules and payments, some with the same companies for years.

Once a physician champion was identified, the system created "categories of like cases, and we assigned the pricing for specific information, and the information was shared with physicians." The spine steering committee's focus on implant procedures and costs became a central part of the hospital's makeover leading to cost reductions. For instance, if an implant is discussed and one physician isn't used to the particular item, "other physicians would speak clinically about how they use it, and talking about what are the greatest opportunities for savings. The discussion comes down to, 'Is it worth an extra $1,000, or can I use an alternative implant in lieu of item X?'" Mckinney says.

Success Key No. 5: Imaging technologies

Sacred Heart Hospital decided that it needed to compete with outpatient centers in developing spine programs. One of the first things it did was hire Thapar as director of the Brain and Spine Institute, and in the next several years he and hospital leadership expanded the hospital's surgical suites, specifically for brain and neurological care.


The major element of its program is development of digitally integrated systems that allow the surgeon to be certain that implants were ideally positioned even before the surgery process has begun. Thapar says the procedures allow for "instant verification of surgical outcomes" through images for minimally invasive procedures. By using the imaging system, which includes brain mapping and navigational technology, surgeons eliminate the need for large and painful incisions required in traditional spine surgery.

By using the programs, the hospital has expanded its surgical program with more practitioners and nurses. The expanded suites also have resulted in increases in brain and spine surgeries, from 60 in 2003 to 622 in 2009, Thapar says, an increase that "is very successful."

Thapar says the increases show that "through a wide range of procedures, with a community hospital, if you have the right talent and technology, you can rival a tertiary care facility."

Reprint HLR0811-6


Joe Cantlupe is a senior editor with HealthLeaders Media Online.
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