Jan 31, 2022 7:00:00 AM | 11 Min Read

5 Ways to Find Implant Savings in 2022

Posted By
Tim Anderson
5 Ways to Find Implant Savings in 2022

In 2022, it is time to look ahead for many hospitals and health systems. After a challenging two years, many hospital supply chain leaders are taking a hard look at their current operations and spending in an effort to streamline and reduce costs.   

Kermit has spent the last 10 years doing just that for hospitals and health systems across the country, saving our clients close to $200 million in their implant spending while also saving them many thousands of hours processing vendor bill sheets.

As we enter 2022, these are five strategies to consider for finding implant savings at your hospital. 

No-Risk Assistance with Your Implant Contract Negotiations

With the recent procurement and staffing challenges supply chain departments face, many conclude that the easiest course of action is to simply renew expiring contracts with their medical device vendors. After all, an extension of the same pricing and terms means that you have locked in your pricing and avoided any increases, right? 

As John Owens, Kermit Co-Founder and Managing Director of Services, explained in a recent blog post, sticking with your current pricing amounts to a price increase – you are simply subsidizing your competition’s better pricing. But while supply chain leaders may recognize the flaws in extending contracts, the fact remains that staffing and bandwidth limitations can make it the only viable option.  

Owens and Kermit have mastered a streamlined approach to achieving an average of 30% savings for hospitals by managing their contract negotiations for them. Kermit’s model assumes all the risk for this project: our rates are based on the amount of savings achieved, and it is not paid out until those savings are realized.  

Fill Open Supply Chain Leadership Roles with Interim Veteran Talent 

Hospitals and healthcare systems have been acutely affected by what industry experts call the “Great Resignation.” Many supply chain departments are seeking talent while there is a severe shortage of hiring candidates. These staffing challenges reach all the way up to leadership levels, leaving hospitals and health systems struggling to stay on track with operational and savings goals. If these supply chain leadership roles stay vacant for too long, the lack of focus on generating savings quickly translates into margin erosion that will take significant work to undo. 

This difficult reality was faced by Inova Health, a nationally recognized health system in northern Virginia. Inova turned to RDA (Ron Denton & Associates), an end-to-end healthcare supply chain management firm that specializes in quickly placing veteran supply chain talent into interim leadership roles in hospitals across the nation. RDA’s interim leaders have at least 20 years of experience in supply chain leadership roles and have both the skillset and tools to make an immediate impact. 

For example, Kermit worked directly with RDA at Inova in 2021, helping to achieve more than $6 million in savings through the first phase of the project, with an anticipated $11 million in total savings through the full length of the engagement. 

After the success of the Inova project, Kermit and RDA have teamed up to provide an option for a combined solution for hospitals and health systems facing similar challenges as Inova Health.  

Upgrade and Integrate Your Scheduling and Tray Management System 

Surgical scheduling and tray management has been identified by many supply chain and perioperative teams as an area ripe for innovation. Questions are being asked about the manual steps in the process. How much time are we spending coordinating schedules with surgical vendor reps and making sure that their devices have been dropped off? What percentage of loaner trays arrive on time?  

And the biggest question of all: can any of this be automated? 

That is why Kermit has a strategic partnership with a leading tray management and surgical scheduling solution that integrates with your ERP and with Kermit, creating an “procure-to-pay" solution that optimizes the surgical workflow from the initial scheduling to vendor payment.  

Automate Your Bill Sheet Audit and Payment Process 

The paper bill sheet: isn’t it kind of crazy? In 2022, the standard process for a vendor to bill you for implants used in your operating room is via pen and paper! 

Have you ever thought about what the optimal process would be to manage this complex spend category?    

If so, I can’t imagine you’d envision a process that relies on scribbled and barely legible notes riddled with bar codes that anyone hardly uses. The fact is that this paper-based process doesn’t just feel inefficient, it is inefficient and is costing hospitals across the U.S. millions in overspending every year 

In fact, based on the over 120,000 bill sheets reviewed and audited by Kermit, we estimate that today’s bill-only process is inflating annual implant spend by an average of 5% as a result of incorrect pricing, wasted items, unwarranted line-item pricing and other mistakes made by implant reps. 

Kermit’s founding team of former medical device representatives developed technology to fix this problem. Built by a team with intimate knowledge of how these paper bill sheets are taken advantage of, Kermit’s software adds much-needed checks and balances to the bill-only process, all without disrupting your current internal workflow.  

With Kermit, the paper-bill sheets are standardized and uploaded to a secure cloud via HIPAA-secure smartphone app where Kermit’s AI and curated business and clinical rules ensure your hospital are only paying what you truly owe for every case. The savings are so significant that the cost of the Kermit subscription is typically covered by the savings in just the first quarter of use.  

Analytics, Analytics, and a Little More Analytics! 

While implementing these changes and processes can lead to a lot of success, the true key to managing your implant utilization and spend depends on reliable and well-organized data.  

As we have covered before in our blog, using data and analytics can transform your implant spend and help you find low-hanging fruit for savings, benchmark costs across your organization, provide real-time measurement of achieved savings and keep your vendors in-line.  

Consider the data you have today for your implant usage, spend, and savings. Do you have enough data to make impactful operation changes? Are the data housed throughout the organization in disparate sources that take up valuable time and resources to collect and aggregate? 

The data points collected by Kermit through the digitization of implant bill sheets can help any supply chain executive, service line director, or CFO get a firm grasp on their implant spend, find low-hanging opportunities for savings, and answer any questions related to their bill-only surgeries.  

As the former CFO of a Kermit client said: “The real-time data and analytic capabilities of Kermit are a game changer for the management of the PPI spend category.”  

How Kermit Can Help Improve All 5 Areas 

Whether you want to find savings through working with a team of experts on implant contract negotiations or are interested in combining a revolutionary bill-only workflow with a streamlined tray management and surgical scheduling solution, Kermit and our strategic partners bring decades of experience to help you achieve success in one project plan.  

Fill out the form below to get a consultation with one of our experts to understand how Kermit and our partner solutions can benefit your hospital or health system:  


Topics: PPI Spend Management, Bill-Only Process, Contract Negotiation, Vendor Management

Related Posts


What’s Happening in Your Operating Rooms?

If you are old enough, you may remember the iconic scene from the 1979 horror film “When a Stranger...

Read More

Using Advanced Analytics to Transform Your Implant Spend

Pop quiz: Using data you have access to, answer the following questions:

Read More