Journal article
A Patient-Centered Hospital Procurement of Physician Preferred Implants
Operations Research, Data Analytics and Logistics, Vol.46, 200498
06/2026
DOI: 10.1016/j.ordal.2025.200498
Abstract
•Operations research model for balancing the tradeoff between patient surplus and hospital profit in the procurement decision of physician preferred implants (PPIs).•Efficient methods for finding solutions and estimating optimality bounds.•Insights to better manage demand uncertainty, inventory, and serviceability of PPIs.
Produced with technologically advanced design and materials, implantable medical devices (IMDs) provide innovative treatments for diseases such as chronic arthritis. IMD procurement is the strategic process of ordering from manufacturers the right quantity of selected devices at the right time and best price and allocating those devices to patients that need them. Given that IMDs account for 40%–60% of total treatment costs, hospitals are increasingly seeking cost-saving strategies to optimize procurement. This study examines the procurement of physician-preferred implants that simultaneously maximize hospital surplus (profit) and patient surplus (value). To enhance flexibility while minimizing revision risks, we introduce IMD substitutions that allow physicians to use alternative devices within the same preferred category. Although this may incur additional training costs to ensure clinical quality and safety, hospitals could benefit from increased revenues and procurement discounts. We formulate the procurement problem as a stochastic programming model. We propose heuristic procedures to find good feasible solutions and estimate optimality bounds. Experimental results based on patient-reported costs and outcomes from total hip replacement literature show that modest increases in physician flexibility can lead to improved financial performance for hospitals, better patient outcomes, and reduced inventory risk from demand uncertainty.
Details
- Title: Subtitle
- A Patient-Centered Hospital Procurement of Physician Preferred Implants
- Creators
- Renato de Matta - Tippie College of Business, University of Iowa, Iowa City, Iowa, USA
- Resource Type
- Journal article
- Publication Details
- Operations Research, Data Analytics and Logistics, Vol.46, 200498
- DOI
- 10.1016/j.ordal.2025.200498
- ISSN
- 3050-7847
- Publisher
- Elsevier Ltd
- Language
- English
- Date published
- 06/2026
- Academic Unit
- Business Analytics
- Record Identifier
- 9985116064502771
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