Memorial Hermann Utilizes Evidence to Reduce Excess Clinical Spend

a client success story

“We simply don’t have the time to uncover the breadth and depth of information surrounding
medical products necessary to provide evidence-based medicine. Hayes does.”

- Dina Roane, BSN, RN, CNOR, Clinical Resource Manager, System Supply Chain

Executive Summary

As Memorial Hermann moves through the changing landscape of healthcare, Supply Chain Management is continuing to partner with physicians to evaluate new technologies based upon clinical evidence. Advances in biologic products have been a challenge for both physicians and the health system. Utilizing Hayes, Inc.’s OnDemand custom consulting service, Memorial Hermann assessed the oversight and clinical spend on 2 key medical technologies. They utilized unbiased evidence assessments to gain alignment for recommendations on product standardization and/or elimination and utilization management.

Successes of the initiatives included:

  • Annualized cost savings of approximately $6.3 million across 2 product lines
  • Creation of established guidelines for introduction of new products
  • Alignment of clinical staff and internal resources to make quicker, more informed decisions
  • Strengthened support for better vendor negotiations
  • Valuable time saved by clinicians


Company Overview

The largest not-for-profit health system in Southeast Texas, Memorial Hermann has 16 hospitals and numerous specialty programs and services conveniently located throughout the Greater Houston area. Their 5,500 affiliated physicians and 24,000 employees practice evidence-based medicine with a relentless focus on quality and patient safety. Their efforts continue to result in national awards and recognition, including being ranked one of the nation’s top 5 large health systems by Truven Health for patient safety and quality. They offer leading-edge diagnostic technologies and treatment techniques as well as Houston’s first health information exchange that shares vital patient data among care providers, helping to ensure patients receive the right care at the right time.


The supply chain team at Memorial Hermann began to take note of an increase on a monthly basis in requests to add biologics to physician’s preference cards. As a result, a Biologics Clinical Programs Committee (CPC) was created specifically to address the challenges posed by an ever-growing demand. The CPC convened to focus on allografts (bone chips, demineralized bone matrix, tendons, spine spacers) and determined that they had been obtaining these products from 7 different vendors at varying costs. They also found that they were being added on during surgeries when the sales representative was present.

Additionally, the Biologics CPC decided to examine the literature surrounding the use of amniotic tissue products. Through some vendors, pricing for these products reached as high as $3500/cc, and the health system was using them in numerous procedures to aid in healing, including cesarean sections, spinal fusions, and total joint replacements. As a whole, the health system spent upwards of $2 million annually on amniotic tissue products.

The CPC also delved into the use of bone morphogenetic proteins (BMP), a biologic product consisting of concentrated growth factors used to enhance bone regrowth after surgeries, particularly in spinal fusions. Complications developed with a product that was in regular use, so the health system examined alternatives, including products marketed as BMP substitutes by a number of different vendors. The CPC also examined the use of bone marrow aspirate (stem cells extracted from the patients themselves) in order to determine their efficacy as well as their cost-effectiveness.

How Hayes Helped

Memorial Hermann has been engaged with the Hayes OnDemand service since 2013. The newly formed Biologics task force under the Orthopedics CPC, supporting more than 50 CPCs, engaged the OnDemand service from Hayes at the outset of this initiative. Hayes OnDemand tackles priority clinical problems and develops custom evidence-based solutions to reduce clinical variation and to drive quality outcomes. The service supports both the value analysis/supply chain committees and clinical committees (CPCs) responsible for developing evidence-based best practices, policies, clinical guidelines, and order entry sets.

The Hayes team performed a comprehensive search and review of the literature, relevant abstracts as well as selected published, peer-reviewed full texts looking at the safety, efficacy, cost-effectiveness, and patient indications of amniotic tissue products and bone marrow aspirates.

The practice of evidence-based medicine, along with the productive collaboration of value analysis, supply chain, and physicians at Memorial Hermann, relies on the findings of an unbiased evidence-analysis resource such as that provided by Hayes.

Results, Return on Investment (ROI), and Future Plans

The findings from Hayes revealed that there was insufficient clinical evidence to support the continued use of amniotic tissue products and bone marrow aspirates. Therefore, upon joint recommendation of the physicians, clinicians, and administrators on the Biologics CPC, these products were removed from the formulary. Patients are still given the option to prepay for bone marrow aspirates through their surgeons’ office.

Elimination of the use of amniotic tissue products allowed Memorial Hermann to realize approximately $2 million in annual savings. The elimination of bone marrow aspirates, BMPs, and BMP substitutes lead to an annualized savings of approximately $4.3 million. Any physician requests for the use of a new biologic now require a Hayes report for approval.

Additionally, the unbiased evidence assessments returned by Hayes strengthened Memorial Hermann’s position in vendor renegotiations.

Future plans include the use of the Hayes Knowledge Center, its Evidence Advisor Service, and the OnDemand custom research support for more complex initiatives for continued CPC support. This includes running multiple product comparisons for the same patient population and indications and an initiative to examine the growing use of synthetics.