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GPOs – Valued Partners in Healthcare
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The healthcare group purchasing organization (GPO) members of HSCA work closely with their provider partners across the continuum of care to reduce cost, add value, and improve outcomes for patients. Below you'll find some narratives that help to demonstrate why GPOs are valued partners in healthcare.

 

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Great Results

Posted By HSCA, Wednesday, March 29, 2017

TPC helps hospitals achieve significant economies of scale by collaborating as a single contracting entity.

By Alan Dorich

It has been said that culture trumps strategy, and it is TPC’s culture of innovation and commitment that enables its hospital members to endure the highs and lows of the increasingly volatile healthcare market, President and CEO Geoff Brenner says. “Culturally, we have developed into a very fluid and adaptable organization that consistently achieves market-leading results amid unprecedented industry disruption,” he says.

Based in Plano, Texas, TPC is a hospital-owned coalition that focuses on innovative cost-reduction strategies within supply chain, purchased services and clinical product utilization. Its history goes back to 2007 when several large health systems conducted a study to measure the true value of consolidation.

“The results of the study revealed that as much as 80 percent of the anticipated financial value generated by hospital consolidation could potentially be achieved by collaborating as a single, committed contracting entity and if successful, it would diminish the need to merge assets,” Brenner explains, noting that the group ultimately chose not to merge assets but rather to form a highly-committed partnership by creating TPC.

Today, TPC consists of 11 healthcare systems located in three states, and has achieved more than $180 million in documented savings since 2010. “By working together as a single contracting entity, TPC hospitals have developed the collective market footprint of a very large integrated delivery network, with a very high commitment level,” Brenner says. “They collaborate as one system to achieve the economies of scale they need to remain financially strong to serve their local markets.”

Two specific areas where TPC has achieved industry-leading financial results are within difficult clinical product categories and purchased services. “On average, TPC members have documented a 20 percent reduction in their supply costs,” Brenner says.

Tough Enough

Brenner has been in the healthcare industry since 1995 and originally served as the president of TPC’s parent company. He credits TPC’s success to the hospitals’ unwavering commitment to each other and the sophisticated self-governance model that has evolved over the years.

“They collaborate as one system,” he says, noting that this enables the company to strategically focus on savings opportunities that are the most difficult to achieve, but offer the highest financial return.

“Oftentimes healthcare supply coalitions set lofty goals to pursue the tougher, higher-yield product or service categories, but those ambitions often fail to materialize because the governance structure was not engineered to deal with inter-hospital conflict, difficult tradeoffs and the binding commitment that is required,” Brenner explains. “TPC’s board, executive steering committee, supply chain leaders and physician/clinical leaders have consistently demonstrated the courage to tackle the most challenging scenarios because they recognize their collective ability to optimize their supply chain has a direct correlation to their financial health, and their ability to provide safe, cost-effective care to their local communities.”

The Best Model

 TPC hospitals routinely evaluate the value propositions offered by their suppliers, Brenner says. “Within the hospital sector, the focus on costs and value are unrelenting,” he states. “Every decision maker is under immense pressure to make prudent, sustainable choices.”

Oftentimes this effort requires physicians to evaluate supplies and vendors they have used for many years. This prospect can be very difficult, since the physicians may have developed strong preferences for the products they use on a regular basis and strong alliances with the supplier representatives. “Navigating those scenarios is one of the greatest challenges,” he admits.

But TPC addresses this challenge by providing the physicians with clinical and financial data that reveals, often for the first time, clinical utilization patterns, clinical outcomes (quality), product costs and ultimately, value. Physicians are highly educated, intelligent, ethical and data-driven; when presented with concise, well-vetted data, they prudently evaluate the variables and propose one or more viable alternatives. That is the power of strong member-led governance.

“Alternatively, if TPC approached the physicians with a preformed agenda that required them to convert from Supplier A to Supplier B, they would justifiably resist the change,” Brenner says. “But as they collaborate as peers and their confidence in the data and the process builds, they identify options to improve the cost metrics without sacrificing clinical quality or patient care.”

Committed to Change

Brenner is proud of the culture at TPC. “There’s a relentless commitment to innovate and evolve,” he says, noting that it requires employees to become increasingly more “comfortable with unprecedented ambiguity.”

Although the work itself can be very challenging, “We have learned to confront each obstacle as a team, and in that approach we have developed a love for what we do, with whom we do it, and for the healthcare organizations for which we do it,” he says. “The real credit belongs to the TPC hospitals; they have been setting the bar day in and day out since 2007.”

TPC’s plan is to stay aggressive when it comes to serving its hospital members and innovating cost reduction strategies within supply chain, purchased services, and even revenue cycle (a new strategic focus area). “Together, we’ve created significant momentum, economies of scale and tangible value.” Brenner explains. “As we move forward, TPC may be required to expand beyond contracting and explore process-related opportunities. The worst thing we can do is look at the results we’ve had and think that trajectory continues upward without continually, and often radically, rethinking our business.”

Tags:  Cost  Texas  TPC 

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Vizient Members Adopt Energy Best Practices to Drive $3.7M in Budget Savings

Posted By HSCA, Wednesday, September 21, 2016

Hospitals are among the most intensive consumers of energy in the United States, with 3 to 5 percent of their annual budget going to energy costs. Yet many continue to overpay for energy supply by relying on traditional purchasing methods. Unfortunately, those methods rarely deliver the best price for the hospital.

Unlike supply chain purchasing for commodity items, the energy market requires a totally different approach that’s more akin to managing market-sensitive assets and liabilities, such as the hospital’s bond portfolio. To be successful, a hospital needs to be able to decide between hedge purchasing versus index decisions (or a combination of both), using financial probability modeling.

“We see many members issuing request for proposals using just their own volume, or in some cases, buying their energy with minimal market intelligence,” said Will Gowan, senior director, contract services for Vizient. “The Vizient energy program, which facilitates the implementation of energy procurement best practices, is helping hospitals realize significant savings.”

Three Vizient members have booked $3.7 million in budget savings by adopting these best practices in energy procurement and management:

·         Use of analytics to manage market risk and capture savings

·         Internal alignment of facilities, finance and supply chain staff around a central strategy that integrates both supply and demand management

·         Aggregation of spend with other hospitals to drive cost savings

 

WellSpan Health, a growing multihospital network based in south central Pennsylvania, realized a $2.1 million savings over their current contract term by transitioning from a traditional bid-based, fixed-rate procurement method to an actively managed market approach. A first step in the transition was organizing a multidisciplinary committee, consisting of the chief financial officer, chief operating officer, treasury vice president and key facility directors, who actively manage the electricity and natural gas spend across the organization’s facilities.

The committee then made the decision to join an aggregation network with other Vizient members and was able to reduce electricity supplier margins by 50 percent. Additionally, they have begun using statistical market analysis to identify savings opportunities in the forward markets, which led to a new contract design where the health system layers its energy purchasing over time. According to Richard Harley, vice president of corporate treasury services at WellSpan, “Our organization now manages its energy spend much as it does other market-sensitive assets and liabilities.”

Another health system seeing a reduction in costs as a result of adopting best practices and having access to analytics through a Vizient energy partner is Lifespan, one of New England’s leading health systems. Lifespan had already taken steps to more directly control its energy costs by recently building a cogeneration plant at its Rhode Island hospital campus. While that step was yielding cost savings, they wanted to take their energy program to the next level.

“We now have access to the highest level of financial and market analytics available in the industry,” said Tom Magliochetti, vice president of facilities at Lifespan. As a result, Lifespan saved $1 million on an already well-managed energy budget and is continuing to integrate and optimize both its on-campus assets and its market procurement processes to drive savings.

At the same time, OhioHealth, a 12-hospital IDN based in Columbus, has revitalized its energy management by implementing all three best practice principles. “The market forecasting and analytics were the key difference in reducing OhioHealth’s energy procurement costs by more than $600,000 over the past year,” said Alan Nelson, system vice president of treasury at OhioHealth. “Even more importantly, the health system has transitioned to managing energy using a team approach.”

“Vizient’s mission is to drive savings for our members. While we are confident every Vizient member can find benefit regardless of market conditions, we haven’t stopped working to improve," said Gowan. “We're currently conducting an outreach to all Vizient members interested in improving their energy results through our best-practices approach. We would particularly like to hear from member facilities, finance, and supply chain leaders so we can perform an assessment to discover opportunities and drive greater savings for all participants,” said Gowan.

Tags:  Cost  New England  Ohio  Pennsylvania  Savings  Vizient 

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Intalere Launches Industry-Leading Real-Time Cost Transparency Tool - Intalere OptiPrice Advantage

Posted By HSCA, Tuesday, September 20, 2016

St. Louis (September 19, 2016) - Intalere, the healthcare industry leader in delivering optimal cost, quality and clinical outcomes, today announced the introduction of Intalere OptiPrice Advantage℠ (powered by BroadJump™), a tool which provides real-time product cost transparency to help hospitals capture millions of dollars in savings on medical and surgical supply costs.

“Today, hospitals may spend months gathering information to negotiate a single pricing amendment. Even then, they may lack meaningful pricing information with which to negotiate. Intalere OptiPrice Advantage is a strategic sourcing tool which enables you to compare the price you are paying for medical surgical products to the price other hospitals from across the country are paying on the exact same products,” said Julius Heil, Intalere president and CEO.  

Intalere Optiprice Advantage helps balance a facility’s negotiating power with suppliers and significantly reduces the cycle time to renegotiate pricing agreements. The solution utilizes medical surgical product pricing data submitted monthly by more than 400 hospitals from across the country to the Intalere OptiPrice Advantage database, which is refreshed on a daily basis. Participating facilities represent both Intalere members and non-members.

Members can analyze spend by categories – such as stents, orthopedic implants, endomechanical, ICDs, osteobiologics, etc. – to determine the range of cost savings available in comparison to what other hospitals with a similar product mix are paying.

The data-driven analytical design can be filtered and formatted for customized views to enhance the depth and breadth of benchmarking needs. Intalere OptiPrice Advantage also generates a revised price list by SKU so members can seamlessly integrate this list with a pre-approved pricing amendment template. Intalere OptiPrice Advantage benefits customers by making them more:

  • Efficient - Reduce negotiation preparation from six months to a few hours.
  • Transparent - Access real medical surgical product prices paid by peer hospitals with first-hand market-share and dollar volume comparison.
  • Tactical - Quickly gather trusted, timely data to strengthen negotiating position and achieve a clear path to savings.

The system is extremely easy to use and can be learned in less than one hour. Intalere will also provide ongoing customer support. Yavapai Regional Medical Center and Virginia Mason Medical Center have both signed on as the newest customers of Intalere OptiPrice Advantage.

“This tool is really the epitome of making evidence-based decisions, which is becoming increasingly important in today’s healthcare marketplace,” said Tim Ingram, director of materials management, Yavapai Regional Medical Center (YRMC). “The real-time analytics, national scope, comparison modules and service line features give it an advantage over other similar tools I have used, and it really makes you comfortable and knowledgeable in terms of ‘putting you in the driver’s seat’ when negotiating.”  According to Ingram, within two days of implementing Intalere OptiPrice Advantage, YRMC was able to identify more than $100,000 in price reductions on just one product.

Intalere’s partner in bringing Intalere OptiPrice Advantage to members is BroadJump LLC, which is focused on delivering supply chain analytics that drive greater efficiency and enable hospitals and health systems to manage their supply costs on-demand. The BroadJump platform is powered by the fastest growing and most up-to-date repository of healthcare supply chain data available anywhere.

Tags:  Cost  Intalere  Savings  Transparency 

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Intalere and Intermountain Healthcare Committed Contract Portfolio Brings More Than 10 Percent Savings, Best Practice Model to Share with the Market

Posted By HSCA, Wednesday, August 31, 2016

The Challenge

According to a recent USA Today article, “Each of the nation’s 5,700 hospitals must cut $2.6 million a year on average in costs in the next 10 years to meet the demands of proposed healthcare reform.” Given how much waste and inaccuracies currently exist in healthcare, improving and re-engineering current processes using improvement methodologies and techniques is crucial.

No other area provides more opportunity for savings than the supply chain, which can represent up to 50 percent of a healthcare provider’s budget. Savings can be realized through both lower costs of acquisition and lower operating costs. An optimized supply chain can help a facility stay lean, manage costs and respond to fluctuations in demand. 

Recognizing the importance of supply chain, Intermountain Healthcare elevated its strategic importance to their organization and has been recognized as the #3 healthcare supply chain organization in the country by Gartner. Senior leadership has committed resources to bring in skilled and talented people as part of their supply chain organization, while also centralizing reporting relationships, and involving and earning the trust of all stakeholders, including clinicians and physicians. Intermountain also implemented a fact and data driven approach, and most importantly, fostered a commitment to innovation, excellence and growth.

But as good as their supply chain organization is, there is always room for improvement. Through an audit performed by a third party company, it was revealed that Intermountain’s pricing for products in the medical/surgical commodity categories was not as competitive as they had initially anticipated. The audit showed that Intermountain could decrease costs in these areas by at least 10 percent by increasing their purchase volume commitment to certain suppliers and standardizing products and suppliers.

The Solution

Intermountain created a board level goal to align internal stakeholders around product standardization. This ensured that performance criteria is tracked and reimbursement to executives is directly tied to supporting standardization goals.  They also invested $1.2 million in new resources to accelerate and deliver the initiative.

Intermountain partnered with Intalere to ensure that these resources and efforts can be made available to other qualified health organizations as well as help put the plan in motion. Over the past several years, the two organizations had sought to redefine the traditional Provider-GPO relationship, which had previously been built mainly around just contracts and procurement. They have been able to evolve the relationship in a collaborative, innovative manner that has resulted in achieving millions in supply expense reduction as well as bringing Intermountain the increased bandwidth to undertake projects that would have required the addition of full-time resources. The relationship has maximized value for both organizations through:

  • Collaborating together with resources and projects aligned to support strategic objectives for both organizations.
  • Leveraging the strengths of both organizations to provide added resources.
  • Using data to reduce variation.
  • Developing a communication and integration model that is flexible, focused on strategy and tactics, but also leaves room for innovation.
  • Learning how data analytics and an information-rich environment support cost/quality initiatives and the implementation of best practices.

The teams worked together to define this initial effort of commodity standardization. They have continued to define new categories to be standardized that they plan to release each quarter. This will build the savings and continue to deliver value for years to come

The benefits of standardization to Intermountain include:

  • Better standardization of patient treatment across all facilities, resulting in better outcomes.
  • Cost savings of 10 percent or more on spend areas covered by the commodity program driven by their volume and commitment.
  • A 7 percent reduction in SKUs ordered, stocked and managed at their facilities.
  • Better supplier engagement due to increased commitment.

For Intalere, the Intermountain commitment magnified their ability to negotiate more favorable terms with suppliers, which could be shared and built upon further by participation of other members.

“Based on Intermountain’s success with the program, we envisioned expanding access to the portfolio to other acute care facilities who can benefit by getting the same pricing that larger facilities are receiving. It creates a win for all involved,” said Joe Tibbs, vice president, sales operations for Intalere, who works closely with Intermountain.

Initial standardization goals were set for 2015 in terms of categories and commitment level, with the plan to expand categories of participation as the program moved forward. Not only did Intermountain expect to save nearly $3 million through implementation of the program, but the larger goal was actually three-fold, to push the initiative past just a cost reduction initiative. 

“Obviously, the committed nature of the program would enable significant cost savings,” said Trent Gee, senior sourcing manager for Intermountain. “But beyond that, the program requirements enable standardization, which in turn enables improvements in supply chain effectiveness. Further, the reduction of product variation facilitates reduction of clinical variation.”

The Outcome

The initial implementation of the project, brought $2.78 million in savings, or a 10 percent reduction in costs. SKUs were also reduced by 497, bringing further cost reduction in inventory management and process improvement. The partners continue to work on adding categories and further reducing SKUs throughout the remainder of 2015 and beyond.

“This is a prime example of how, in sharing our goals, we also came up with ideas for new areas of collaboration, consolidation and building more volume that we could then share with others,” said Richard Bagley, Intermountain’s director of strategic sourcing.

The overarching objective of this program is taking the focus off mere commodities and elevating the supply chain to a strategic driver of change, not only bringing validated cost reduction of 10 percent, but also:

  • Process improvement.
  • Standardization and elimination of variation.
  • Review and validation of high quality clinical items to assist in consistent patient outcomes.
  • Establishment of guidelines, processes and governance.

This type of collaboration, driven by data, strategic alignment and flexibility will help to drive improvement and long-term sustainability for healthcare organizations facing the new era of healthcare. The future value of programs such as this is the opportunity and ability to share this model with other healthcare providers.

Tags:  Intalere  Savings 

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Intalere Member Yavapai Regional Medical Center Saves More than $850,000 on Physician Preference Items through Intalere’s Clinical Advantage Solution

Posted By HSCA, Wednesday, August 31, 2016

The Challenge

Yavapai Regional Medical Center in Prescott, Ariz., a two-facility acute care hospital-based IDN, was faced with the realities that challenge many healthcare facilities today – ever-shrinking margins.

“We were looking at challenges in the organization related to reduced margins,” said Dorance Dillon, director of Supply Chain Management at Yavapai. “With our case mix, in essence 75 cents of every revenue dollar was coming through a combination of federal and state reimbursement. With that, facing continued shrinking margins, we needed to do something.” 

Among their strategies, Yavapai worked with a consulting group to engage their entire organization in Lean process principles and more fully partnering with a group purchasing organization to drive cost savings. “We selected Intalere for reasons that involved attention to detail, supporting us operationally, and also from the standpoint of the identified savings that Intalere can and would provide,” said Dillon.

One of the biggest challenges Yavapai faced was in the area of physician preference items (PPI). Almost half of all the medical surgical supplies used in U.S. hospitals are physician preference items (PPIs), including devices and implants. Yavapai’s major areas of spend revolved around those including cardiac rhythm management, total joint reconstruction for hips and knees, spine hardware, bone products and trauma/fracture management implants.

The Solution

Through their Intalere Clinical Advantage® program (ICAP), a proven strategy for reducing high-dollar implant costs while positively impacting clinical outcomes and physician support, Intalere immediately set about collecting data and conducting a market analysis. With hundreds of members across the country, Intalere was able to provide benchmarks and pricing information to bring context to the price points Yavapai was paying. Yavapai was then able to leverage this benchmarking and price point information to reduce their operational costs or direct pricing on the products.

Gaining physician support and buy-in is an absolutely critical piece to the success of any PPI project. Engaging and collaborating with physicians to develop key relationships supported through evidence-based outcomes is a foundational piece of the Intalere Clinical Advantage program. 

“The ACAP team had the ability to engage our medical staff to obtain these price points and do that without offending any of our medical staff physicians,” said Dillon. “They presented the data and information while also explaining very specifically how they arrived at those numbers, including taking into account that Yavapai is in a rural setting.” Dillon and the physicians were also engaged by the way the information was presented to them. “They said these are real prices that you are entitled to. Go back to your vendors and share this.” Using this particular approach served to educate and enlighten the physicians, giving them comfort to understand that the process was not about forcing them to move away from certain products they might have been trained on or been comfortable with, but to support them and help work collaboratively to reduce the expenses associated with the products they used.

The Outcome

Yavapai was able to identify some quick wins and significant savings. In the cardiac rhythm management category, they were able to reduce expenses by 10-15 percent, a savings of $350,000. In the area of total joint replacement, savings was $500,000. “A cost reduction of up to 20 percent is quite significant and these are savings that have trickled right down to our bottom line,” said Dillon. “But just as important, it does not require the physicians to change what they are using and it did not change anything as it relates to the reps that support our organization.” 

A key ingredient Dillon stressed is that while many organizations or potential partners can supply data, how you get from the page to the actual implementation is the true driver of success. It is paramount to have pricing transparency and subject matter experts that can interpret the data to your organization. What is the organization? Where are they? Where do they provide services? Factors such as these affect pricing within the market. “And I think that is where Intalere really shined,” he said. “In terms of their team understanding this organization, coming on site, meeting not only my team members and certain executives within the organization, but also being able to engage the physicians and surgeons where they live and being able to present a very compelling case.”

“Intalere has been a very good partner. They have guaranteed their savings,” said Dillon. “We still have other opportunities to work through, but I could absolutely state that Intalere has come through with flying colors to support what they said they would do.”

Tags:  Arizona  Intalere  Savings 

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Unique Provider Allied Services Engages with the Full Value of Intalere to Reduce Costs and Achieve New Levels of Success

Posted By HSCA, Tuesday, August 2, 2016

THE CHALLENGE

Allied Services, the leading provider of healthcare and human services for
northeastern Pennsylvanians with disabilities and chronic illness, is a truly
unique care provider. Founded in 1958, Allied’s 3,200 employees and volunteers
serve nearly 5,000 people in 22 counties, providing:

• Inpatient and outpatient rehabilitation.
• Vocational/community services.
• Home health.
• Homecare.
• Personal care.
• Skilled/long-term care.
• Transitional care.
• Hospice.

“We have been fortunate to grow and serve based on the needs of the
community,” said Vince Splendido, vice president of supply chain at Allied
Services. “Our diversity is challenging. It’s not just the traditional med surg
products and services, but there is lots of variety and special needs.”
When they engaged Intalere as their group purchasing organization in
2013, the first challenge was to learn and leverage as much about each other as
possible in order to maximize the partnership.

“Allied Services is a unique healthcare facility that Intalere hadn’t previously
experienced. It was a learning process for both Allied Services and Intalere
to find a program tailored to our type of care and breadth of services,” said
Splendido. “In addition to the cost reduction and quality of care enhancements
we expected to gain through our association with Intalere, we were looking to
establish a long-lasting, productive partnership that would bring the greatest
benefit to our patients and the communities we serve.”

As with all providers in healthcare’s current landscape, Allied had to find ways
to cut operational costs without decreasing quality of care, while dealing with
implementation of new government mandates for equipment and protocols,
and ever-increasing costs. Allied was also challenged with balancing a large
portion of uncompensated care with the desire to maintain all current services.

THE SOLUTION

The Allied team, led by Splendido, Assistant Director David Caprari and Purchasing
Manager Fred Roughsedge, set up weekly meetings and calls with their Intalere
counterparts, led by director of member solutions Tom Toth, to review Intalere
Savings Roadmaps and Opportunity Reports for cost reduction opportunities.

A dynamic reporting tool, Intalere Savings Roadmap®, analyzes and compares current
spend with the Intalere portfolio. Facilities can analyze and review total spend by:

• Contracts and tier commitment requirements.
• Total spend per contract.
• Current versus Intalere costs.
• Savings opportunities.
• Standardization status.
• Product category.

By identifying realistic and actionable opportunities for savings, the tool helps
prioritize the opportunities by developing the Savings Roadmap – an Excel tool that
maximizes bottom-line impact and provides the staff support to implement the
savings initiatives and the key supply chain dashboards to monitor, track and report
savings through all levels of the organization.

The Opportunity Report is best suited for smaller providers or for providers that may
have received an Intalere Savings Roadmap within the last six months and are looking
to maintain momentum and focus on the available opportunities.

As with the Roadmap, the Opportunity Report highlights areas of opportunity for the
provider. Those opportunities range from savings that can be quickly and easily realized
by signing a Letter of Commitment, to conversion opportunities. All of the information
is contained in an easy-to-read report.

THE OUTCOME

“From the beginning, Intalere showed a genuine interest in our success,” said
Roughsedge. “Using their data tools, they were able to dissect contracts in many
different areas and chart a path to savings.” Allied was able to implement collaborative
initiatives with Intalere in the areas of med surg, construction, nutrition, environmental
services, pharmacy and laboratory. Nutrition was one of the largest areas of spend for
Allied, which operates one of the largest cafeterias in the state of Pennsylvania.

In this case, and many others, Intalere’s field specialists worked directly with
department directors to identify savings and quality standards. “They engage down to
the department level – that’s where the real value is,” he said. “It’s just not the pricing,
but the value-added services they provide.”

Allied also took full advantage of Intalere’s alliance initiative, taking a board seat on the
Intalere Eastern Alliance. “The culture and cohesiveness of the group has afforded us
the opportunity to reach an even higher level of success, further allowing our size and
volume to reduce operational costs,” said Splendido. Allied served as a test site for a
standardization project around surgical gloves which brought them $65,000 in direct
savings while also engaging the clinical staff in the value analysis initiative to ensure
enhanced product quality.

Allied’s initial goal of reducing operational costs by 2 percent was easily achieved,
and the collaboration to bring savings and efficiency, both individually and through
the Intalere alliance program, continues into other areas. “Now everyone knows,” said
Roughsedge. “The Intalere name is recognized. The value is understood. There has
been a true cultural change and awareness of what this collaboration has brought to
our organization.”

Tags:  Cost  Intalere  Pennsylvania 

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Virginia Mason Medical Center Value Analysis Project Improves Standardization and Intalere Contract Compliance, Results in $766,000 in Cost Savings

Posted By HSCA, Tuesday, August 2, 2016

THE CHALLENGE

Established in 1920, Virginia Mason is a non-profit organization offering a system
of integrated health services, featuring a multispecialty group practice of more
than 460 employed physicians and offering both primary and specialty care as
well as an acute care hospital licensed for 336 beds. Virginia Mason has been
recognized by numerous organizations as one of the top hospitals in the nation
and is one of the first organizations in the world to adapt the Toyota Production
System (TPS) to healthcare. As such, they are no strangers to implementing
process and efficiency improvements that can reduce costs and improve
clinical outcomes.

Traditionally at Virginia Mason Medical Center (VMMC), supply chain
involvement in new product implementation was primarily limited to
financial analysis. The clinicians determined whether to bring in products
without understanding the overall impact to the institution. A new process to
better integrate supply chain and clinical areas was needed to both improve
communication and to align organizational goals.

THE SOLUTION

VMMC initiated a project to enhance the product value analysis function
under the leadership of Bill Knight, value analysis manager, by establishing
value analysis teams (VATs) in areas including operating room, lab,
GI/endoscopy, IR/radiology, nursing and the regional medical centers.
The teams include members from each specific area plus the “core four:”
the value analysis manager, a physician advisor, clinical product review
specialist and a contract utilization analyst (an employee of Intalere
affiliate Health Resource Services (HRS)).

A standard agenda was established for each team, which included
a review of the following:

• Product issues such as safety, recalls and back orders.
• Products in trial.
• New products brought to the team.
• Intalere contract opportunities.
• Questions and concerns.

Each product was assessed according to several different criteria including:

• Quality.
• Functionality.
• Literature to support efficacy/evidence-based practice.
• Availability of replacement product.
• FDA approval/guarantee.
• Infection control issues.
• Environmental impact.
• Availability of Intalere contract.
• Finance/reimbursement analysis.
• Labor savings.
• Price.
• Standardization.
• Association with capital purchase.
• Physician certification.

THE OUTCOME

Although the concept of the value analysis team was not novel, the degree of
involvement of the clinical arenas was innovative.

Previously, almost every clinical area had its own product assessment teams
with only peripheral supply chain involvement. The new, comprehensive
value analysis teams allowed supply chain to be an equal partner in decisions
regarding new products. The collaboration of physician and clinical champions
fully addressed clinical efficacy aspects and also brought a level of credibility to
product choices.

It also allowed for increased visibility of VMMC’s group purchasing partners and
the value of using those contracts. To ensure accountability, all VAT scoreboards
are posted to the intranet for visibility of progress.

The value analysis teams improved standardization and Intalere contract
compliance, leading to a documented cost savings of $766,000. This also
decreased inventory and increased quality and safety of product usage. The
teams also respond to product safety issues and are able to identify similar,
higher quality products without increased expenses. Significantly, the value
analysis teams led to collaboration and collegiality between supply chain and
operational areas of the Virginia Mason integrated delivery system.

Tags:  Cost  Intalere  Savings 

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Vizient, Inc. Named to Supply & Demand Chain Executive’s SDCE 100 Top Supply Chain Projects for 2016

Posted By HSCA, Friday, July 15, 2016
IRVING, Texas--()--Supply & Demand Chain Executive, the executive's user manual for successful supply and demand chain transformation, has selected Vizient, Inc. as a recipient of an SDCE 100 Award for 2016.

The SDCE 100 is an annual list of 100 great supply chain projects. These projects can serve as a guide for supply chain executives who are looking for new opportunities to drive improvement in their own operations. These projects show how supply chain solution and service providers help their customers and clients achieve supply chain excellence and prepare their supply chains for success.

Vizient was recognized for its supply chain transformation project with INTEGRIS Health to sustain a $15 million savings realized from a Vizient cost reduction initiative. Vizient enabled the health system to enhance its organizational structure by aligning facilities under a single supply chain operations and assisting in training of skillsets for positions. The organizational improvements generated a sustainable infrastructure across INTEGRIS Health supply chain operations; improved contract and GPO compliance; reduced rogue agreements; provided greater visibility into vendor performance; and delivered more financial value from vendor relationships.

“The challenges around operational improvement and cost reduction facing our industry are significant and gaining efficiencies in the supply chain are in the spotlight,” said Larry Bramble, vice president, Consulting Services – Supply Chain Operations. “Vizient’s approach is rooted in collaboration and creative problem solving that helps supply chain leaders make every aspect of their operations as cost effective as possible with sustainable results. We are extremely proud to have our work recognized by Supply & Demand Chain Executive.”

“Our goal with 2016’s SDCE 100 is to shine the spotlight on successful and innovative transformation projects that deliver bottom-line value to small, medium and large enterprises across the supply chain,” said Ronnie Garrett, editor of Supply & Demand Chain Executive. “The selected projects can serve as a roadmap for supply chain executives looking for new opportunities to drive improvement in their own operations. We congratulate all of our winners for a job well done!”

Tags:  Cost  Savings  Vizient 

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Innovative Companies and Solutions Featured at Intalere’s Emerging Technology Show

Posted By HSCA, Tuesday, June 7, 2016

Intalere, the healthcare industry leader in delivering optimal cost, quality and clinical outcomes, held its annual Emerging Technology Show at the recent 2016 Intalere Member Conference in Las Vegas, Nev. The event showcases emerging technology and diversity suppliers proposing new, enhanced products and services to Intalere members.

“Intalere has always worked diligently to cultivate supplier relationships which deliver optimal outcomes to our members,” said Tom Wessling, vice president, contracting operations. “This event is an important element in ensuring we are consistently evaluating participants with innovative products for inclusion in Intalere contracts.”

Among the diverse mix of solutions presented during the show were:

  • Minimally invasive spinal fusion.
  • Pathogenesis-based therapies.
  • Healthcare continuing education.
  • Vascular access technologies.

“Our objective is to present a portfolio that is very competitive and supports the products that members desire for patient care,” said Wessling. “This event is one example of how Intalere works to provide healthcare providers and patients access to breakthrough technologies and choices among healthcare products.”

Over the past several years, Intalere has contracted with a number of suppliers who participated in previous shows. Several companies that participated in this year’s event are being evaluated for inclusion in Intalere contracts.

Tags:  Innovation  Intalere  Nevada 

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Optimize|Item Master Identifies $500,000 in Billing for Omaha Children’s

Posted By HSCA, Friday, January 15, 2016

The challenges faced by health care providers throughout the United States are daunting. Reimbursements are declining while costs are increasing, and staff is feeling pressure to do more with less. Simply getting paid for the services that are provided is an undertaking that can easily consume a vast amount of resources. In fact, billing and collections can be the most challenging factor in the revenue cycle equation. Health care providers are constantly adjusting their billing and collections methods in an effort to accommodate changing regulations and keep up with industry standards.

This is certainly true at Children’s Hospital & Medical Center in Omaha, Neb. — the only full-service pediatric specialty health care center in Nebraska. At Children’s, no child in need of medical care is ever turned away because of inability to pay. This may be why, according to Chris Klaiber, materials manager at Children’s, “we’ve always been paid a high percentage of the charges we bill.”

This was the case until fall 2012, that is. Chris and his team began noticing that some insurance payers were requiring that Healthcare Common Procedure Coding System codes be included when billing for certain items. “We’d never had a situation that required us to include HCPCS codes, so this was new to us,” said Lori Kirsch, value analysis nurse at Children’s. “Even if there was only one line item that was missing a HCPCS code, the payer would refuse to pay the entire bill.”

Realizing that these interruptions in their revenue cycle were unsustainable, Children’s began urgently looking for the missing codes to move the revenue process forward. Using every resource they knew of to tackle the problem, resources were stretched thin as their “all hands on deck” approach turned registered nurses into makeshift medical billing coders.

“Vizient helped Children’s bill over $500,000 within a couple of passes through Optimize|Item Master. Just imagine trying to fill a $1 million hole in your budget, and finding over half of it in one place. That’s huge.”  Read the rest of the story here.

Tags:  Cost  Nebraska  Vizient 

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