Achievement of substantial cost reduction through joint purchasing by the radiology departments of a large vertically integrated health care system

Rationale and Objectives. The authors sought to lower costs by coordinating the purchase of equipment, supplies, and services in the radiology departments of a vertically integrated health system formed by the merger of two of the largest academic medical centers in New England. Methods. The radiology departments at Massachusetts General Hospital and Brigham & Women's Hospital formed a cost-reduction task force to explore opportunities to jointly decrease costs. Data from the operating budgets of both institutions were collected and analyzed to find specific items within the budgets that could yield substantial cost savings. Results. The project's first phase yielded over $810,000 in reduced costs from a system-wide annual budget of only $7 million for film and contrast material. Ongoing additional projects suggest that longer term contracts that contain steeper discounts with a decreased number of vendors will result in further decreases in the cost of materials and supplies. Conclusion. Coordination of purchasing by the radiology members of an integrated delivery system can yield substantial savings.