October isn’t just the season of falling leaves and Halloween frights—it’s also a critical time for many hospitals and health systems as they close fiscal years or prepare budgets for the year ahead. While leaders focus on big-ticket priorities, one category often quietly creeps up in spend without much warning: implantable devices and physician preference items (PPIs).
If left unchecked, these creeping costs can eat away at margins, strain payer relationships, and erode trust between finance, supply chain, and clinical teams. But with the right strategies in place, hospitals can shine a light on these hidden costs and take control heading into 2026.
Implant spend doesn’t balloon overnight—it builds gradually:
Surgeon preferences shift toward newer devices without standardized review.
Bill-only workflows remain paper-based and inefficient, delaying visibility into true costs.
Vendors introduce “extras” that don’t get captured in contracts or negotiations.
Financial leakage occurs when mismatches in POs, invoices, and bill sheets aren’t reconciled.
These small variances can snowball into millions of dollars in missed savings opportunities over the course of a fiscal year.
1. Conduct a Year-End Spend Analysis
October is the perfect time to benchmark implant spend against national and regional pricing. Identify your highest-volume, highest-cost procedures and evaluate whether they align with fair market value.
2. Standardize Bill-Only Workflows
Manual, paper-heavy processes are one of the biggest culprits behind leakage. Automating bill-only capture ensures every charge is visible, accurate, and processed in real time—preventing costs from slipping through the cracks.
3. Engage Physicians with Data, Not Just Price
Spend creep often originates in the OR. Supply chain teams should share case-level insights with physicians to show how product choices affect overall costs and outcomes. Aligning decisions with data helps reduce unnecessary variation.
4. Strengthen Vendor Negotiations Before Renewal
As you finalize budgets for 2026, proactively review upcoming vendor contracts. Transparent pricing comparisons and utilization data give your team leverage to negotiate from a position of strength.
5. Set a Culture of Continuous Monitoring
Budgeting isn’t a once-a-year exercise. Establish real-time dashboards and monthly reviews to keep spend aligned with your financial targets throughout the year.
Hospitals that tackle implant spend creep now will enter 2026 with stronger negotiating power, better alignment across stakeholders, and clearer insight into their true costs.
At Kermit, we help health systems do exactly that—with bill-only automation, real-time benchmarking, actionable insights and expert consulting that deliver transparency and savings where it matters most. Our clients regularly uncover 3–5% immediate savings and identify more in long-term opportunities.
As you wrap up this fiscal year, don’t let implant costs creep up unnoticed. With the right strategies—and the right partner—you can turn October budgeting from a scary story into a success story.