Three Steps to Reduce Your Biologics Costs

One reason that hospital supply chain efforts often fail to influence meaningful change is that biologics product choices are mostly physician-preference driven. The biologics used in spine surgery belong to a complex and often overlooked category. Hospital supply chain professionals frequently encounter significant challenges when attempting to reduce costs and consolidate biologics vendors.

With over 20 years of experience in hospital supply chain management, and having conducted 50+ biologic- specific RFPs, I have found the following steps incredibly helpful in reducing biologics costs while maintaining positive clinical outcomes:

1. Group biologics by technology

Biologics have varying technologies and indications for use, as well as a wide range of available clinical evidence. For example, bone grafts represent a subcategory of biologics that are widely used in spinal fusion surgeries, which is typically a high-cost procedure.

Bone grafts are further organized into four categories: autograft, allograft, growth factor/peptide, and synthetic. Within the allograft category there are four types: stem cell allografts, premium allografts, demineralized bone matrix (DBM) and traditional allografts. The allograft subcategories are produced using human bone. Start by grouping biologics by these main subcategories.

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2. Look for the most cost-effective technologies

This step involves aligning with your clinical teams on the value of available technologies to price. For example, I have seen multiple hospitals and IDNs lower costs and maintain or improve physician satisfaction for lumbar fusion procedures by switching to more cost-effective technologies with similar or greater clinical evidence.

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3. Choose biologics vendors that offer a broad portfolio of products

Many companies in the biologics space have very limited portfolios, and often offer just one product in the biologics category. By choosing biologics vendors that offer a broad portfolio of products, your surgeons will have access to a wide range of technologies to match the needs of the patient, while the supply chain department can more effectively control costs. Following these three steps will help you on the journey to making sense of your biologics use and spend.