Case Study
Saving over $65,000 by Operationalizing Best Pricing for an IDN
Client Profile:
A well-regarded US-based Integrated Delivery Network (IDN) with approximately $8 billion in annual revenue from multiple high-volume hospitals. Physicians within this IDN are often early adopters of new medical technology and maintain strong relationships with medical device representatives, welcoming case and product support. Known for its stringent approach to pricing, the IDN negotiates assertively and rarely accepts initial pricing offers.
Client Challenge
Physicians at the IDN sought advanced technology for treating arrhythmia patients with minimally invasive procedures, aiming to reduce procedure times and improve patient outcomes. After establishing the technology's clinical value, the IDN initiated the pricing approval process for capital equipment and related disposables. Given the IDN’s reputation for price sensitivity, device representatives frequently started with higher prices, anticipating negotiations. The IDN’s objective was to secure the best possible pricing to maximize the product’s value for patient care.
TransformEdge Solution
The IDN collaborated with system physicians to assess future usage potential, which was significant. They requested an immediate 10% discount on the capital equipment, emphasizing the large volume of arrhythmia cases and the enthusiastic adoption expected in their electrophysiology (EP) labs. Additionally, they negotiated a further discount based on projected annual unit sales. The IDN engaged in multiple negotiation rounds, evaluating various pricing strategies and ultimately leveraging several savings programs to secure below-average pricing.
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Outcome
The IDN achieved a 10% discount on the $200,000 capital equipment purchase, saving $20,000 initially. For the disposable product line, they secured a 7% discount based on an estimated annual usage exceeding 500 units and arranged a rebate structure for growth beyond this threshold. Lastly, they included a risk-sharing program, providing a reimbursement of $800 for each re-intervention within a year.
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By negotiating beyond first-pass pricing, after several rounds of negotiations, the IDN saved over $65,000, reinforcing their commitment to cost-effective care and optimized patient outcomes.