IDNs lighten workloads by using non-contracting services offered by GPOs.
Perhaps one of the greatest challenges group purchasing organizations face today is educating the healthcare industry that they are not, in fact, all the same. Group purchasing organizations, now, more than ever, work to assess their members’ needs, including supply chain goals and objectives, infrastructure, policies and more. Gone are the days when group purchasing organizations tried to be everything to everyone. Today, they analyze which products and solutions are the best fit for which institutions, all the while finding the most cost-effective ways to meet their members’ needs. Not only must group purchasing organizations launch new initiatives to remain competitive, they then must work closely with members to ensure these programs provide positive opportunities and results. Without close communication with its members, a group purchasing organization may be less successful at keeping its finger on the pulse of the medical community. The Journal of Healthcare Contracting interviewed six group purchasing organizations – Amerinet, Broadlane, HealthTrust, MedAssets, Novation and Premier – to learn how each is attempting to differentiate itself in today’s market. Here is what they had to say. At a Glance Group purchasing organizations strive to differentiate themselves and show their members – current and potential – how they stand apart from one another. The following chart is a summarization of programs offered by six group purchasing organizations – Amerinet, Broadlane, HealthTrust, MedAssets, Novation and Premier. Whether their programs are new within the last year, or tried-and-true services, each one offers its own unique set of solutions to contracting, financing, managing and making wise clinical or environmentally friendly choices in healthcare.
| Amerinet | Broadlane | HealthTrust | Medassets | Novation | Premier | |
| New Programs within last 12 months | Healthy Environment |
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| Additional Programs | Partnership with Energy Star®, the U.S. Environmental Protection Agency’s voluntary program |
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Broadlane
The Journal of Healthcare Contracting: What are the greatest challenges for GPOs trying to differentiate their services and programs from those of their competitors?
Broadlane: We believe that an RFP and a market basket cost analysis alone will not provide a proper understanding of how GPOs are truly differentiated and which model best supports the strategic direction of the hospital or IDN.
We evaluate partnership opportunities in the following ways:
- In-depth, on-site assessment to gain the necessary understanding of a potential client’s strategic direction, supply chain goals/objectives, current infrastructure, IT systems, policies/procedures, etc.
- Category analysis, which examines every product purchased by a hospital or IDN for an entire year and calculates both the immediate impact and long-term conversion opportunities associated with utilizing our GPO portfolio. The category analysis accounts for physician preference and current market shares to determine actual price eligibility. This process takes about 30 to 45 days, and provides a detailed 5-year relationship impact analysis.
JHC: When your GPO implements a new program for its members, how does it maintain an edge over competitors who follow suit with similar programs?
Broadlane: One of our key differentiators is the deep relationship we enjoy with our clients. We have a “real-time” understanding of emerging supply chain challenges, which allows us to develop solutions in a proactive (vs. reactive) environment. We pride ourselves for the speed with which we bring new solutions to the market. When we develop a new cost reduction opportunity, our clients are involved from the inception, preparing for the opportunity and working with our resources to develop an implementation plan. Once the initiative is launched, we work hand-in-hand with our clients to implement the opportunity and monitor results. Given the dynamic nature of our industry, we continuously evaluate our current services, as well as look for additional opportunities to improve the financial performance of our clients.
JHC: What new services or programs (in addition to your contract portfolio) have you offered your members in the last 12 months?
Broadlane: We continue to expand our focus on physician preference items and high-spend procedure areas such as the OR and cath lab. We have built upon our successful custom contracting efforts in the areas of orthopedics and cardiac rhythm management devices to move into full margin management for high-cost, high-volume procedures. We have developed an inventory management solution to manage the de-centralized inventories in our clients’ ORs and cath labs.
Our Medication Use Management (MUM) program has expanded to focus on additional therapeutic drug classes, and while most providers continue to experience annual pharmaceutical cost increases, our best performers are actually seeing a reduction in overall drug costs.
To address the cost levers associated with the purchasing process, we developed our centralized purchasing organization, Purchasing Services, which offers a scalable solution for providers looking for better purchasing controls, greater contract coverage and compliance, non-contract spend management, more efficient purchasing transaction management and detailed comprehensive purchasing intelligence.
All of the solutions we create are in response to challenges faced by our clients.
JHC: In addition to new services, please list and explain your top five programs (apart from your contract portfolio).
Broadlane: First, Broadlane is an acknowledged leader in healthcare supply chain outsourcing. We provide complete supply chain management for IDNs and hospitals alike. For example, at The Health Alliance of Greater Cincinnati, the materials management staff is comprised of Broadlane employees. The same is true for Continuum Health Partners and the Brooklyn Hospital in New York. We have a large staff of Broadlane employees working at Kaiser Permanente and 17 who are dedicated to CHRISTUS Health. Other outsourced clients include Sisters of Charity of Leavenworth Health System and University of Massachusetts Memorial Health Care. Broadlane’s centralized Purchasing Services offer clients a scalable solution for another critical business process – transaction management. Purchasing Services help our clients better utilize their own staff while improving customer service, increasing transaction efficiency and lowering procurement-related expenses. Our centralized staff immediately identifies and acts on purchasing organization price discrepancies and can manage 100 percent of a client’s purchases electronically.
Second, through Broadlane’s Clinical Services, we focus on controlling the escalating cost of physician preference items, with a strong focus on orthopedic implants, cardiac rhythm management devices and therapeutic pharmaceuticals. We have implemented an innovative value analysis approach, designed to proactively engage physicians in the development of physician preference strategies and modify certain behaviors to do the following:
- Better manage the introduction of new technologies
- Rationalize product consumption.
- Leverage innovative sourcing strategies
- Focus on service line profitability (orthopedics and cardiology)
- Sustain the hard earned gains. This is a heavily data-driven process, and implementation is managed by Broadlane’s clinical resource team to facilitate open peer interaction.
Third, Broadlane operates its own e-commerce exchange. We leverage our exchange, not only to reduce transaction costs, but to capture the purchasing data required to perform various analytics and return “actionable” intelligence to our clients. Our Informatics Services provides this information. For example, our client portal, OnRamp, provides sophisticated contract management and reporting capabilities to assist our clients in managing their spending and identifying/prioritizing savings opportunities. Broadlane’s STAR Program takes this a step further by providing performance reporting to monitor quality and efficiency measures by service category and identifying variances in performance from industry norms, benchmarks, and/or best practices.
Fourth, Broadlane manages a capital equipment sourcing approach called Live Group Buys, which is a bulk, negotiated purchase of diagnostic imaging systems, open to all Broadlane clients with the objective of obtaining the best technology at the best value. Typically, we run
Live Group Buys each year for each of the following modalities: MRI, CT, CR, cath lab, R&F, ultrasound, Pet/CT, DR and angio. Client representatives (including physicians, clinicians, department directors, executives and clinical engineers) meet at Broadlane’s offices for a two-day presentation and negotiation session. The participants pre-commit to direct their specific modality purchase to the awarded supplier. Our clients then select the best technology, leading to substantial cost savings, contract enhancements (extended warranties, payment terms, service coverage) and higher client satisfaction.
Fifth, our labor services business continues to grow, and we have expanded our focus on agency labor to include premium shift labor and non-salaried labor management. We are currently in 43 markets across 23 states and manage in excess of $500 million in temporary labor spend annually for our clients.
JHC: What sets these programs apart from similar services offered by other GPOs?
Broadlane: We strive to differentiate ourselves through the meaningful savings and other results we deliver for our clients. Our focus on all controllable expense (premium shift/temporary labor, supplies, purchased services and capital equipment) drive sustainable, bottom line improvements. In 2006 alone, we signed 20 new clients and added over $2 billion in new purchasing volume.
JHC: What additional programs/ services do you offer?
Broadlane:We offer a host of services; however, we offer two things that we believe to set us apart from our competitors. First, we believe our Code of Conduct sets the standard for our industry. Second, our contract award process is driven and governed by our clients, with Broadlane employees providing staff support. That said, in addition to the Clinical Services mentioned above, Broadlane has numerous standardized programs, including the following:
- Procedure Optimization Program, which allows a provider to fully identify and understand the factors that drive costs for particular procedures.
- Surgical Process Redesign Program, which helps to maximize OR efficiency, expand capacity, increase revenue and enhance physician and patient satisfaction.
- Reprocessing of Single-Use Devices, a comprehensive solution for implementing a reprocessing program.
- Supplies Analysis and Standardization Program, which helps providers standardize and manage I.V. supplies and inventory, and can reduce overall costs up to 30 percent.
- Therapy Bed and Wound Care Program, which allows a provider to utilize best practices in pressure ulcer prevention, wound care and kinetic therapy.
- Custom Procedure Tray Utilization Program, which assists in lowering supply cost by reducing waste and decreasing inventories.
Finally, we continue to make great inroads into the alternate care market, with over 2,100 ambulatory care centers, hundreds of radiology and long term care facilities and over 19,000 physician practices.
| Mission Statement
Broadlane improves the financial and operating performance of healthcare providers through innovative services that combine best-practice processes, advanced technology and economies of scale. Guiding Broadlane’s journey are jointly shared values – Clients, People, Integrity, Citizenship and Financial Responsibility. Their common thread is integrity: doing what is right. Clients People Integrity Citizenship Financial Responsibility Source: www.broadlane.com |
Premier
The Journal of Healthcare Contracting: What are the greatest challenges for GPOs trying to differentiate their services and programs from those of their competitors?
Premier: Ironically, the greatest challenge is the perception that one GPO is much like another. In fact, each one has a different focus, different capabilities and services and a different value proposition. Premier was created by not-for-profit hospitals to better serve their patients by working together. Through Premier, hospitals share resources, analyze clinical and financial data, evaluate thousands of medical products, take part in educational seminars and conferences, and share best practices. In addition, we offer revenue returned to our members in the form of cash distributions, as well as comprehensive field support and value-added services.
JHC: When your GPO implements a new program for its members, how does it maintain an edge over competitors who follow suit with similar programs?
Premier: When smaller independent hospitals need access to better pricing, we bring them together in regional or virtual collaborations. When large IDNs with a particular affinity, such as Catholic providers, wanted to come together to meet particular purchasing goals, we formed a Catholic Contracting Group. When hospitals want better pricing by committing to standardization, we offer programs such as Rational Choice Med/Surg, where volume from hospitals across the nation can drive down the already low best price on a national contract. Member-driven sourcing committees keep the focus on innovative sourcing strategies to meet their needs. Premier has also invested heavily in developing a superior enabling technology platform and values customer intimacy.
JHC: What new services or programs (in addition to your contract portfolio) have you offered your members in the last 12 months?
Premier:
- SpendAdvisor. SpendAdvisor uses an organization’s purchase order data, supplemented with data from participating members, suppliers, pharmacy wholesalers, and national benchmarks. To identify simple price opportunities that do not require changes in purchasing patterns, the program helps members pinpoint contracting opportunities for local negotiations to yield savings by comparing regional, local and Premier contract alternatives. With deeper analysis, SpendAdvisor detects greater savings derived from product standardization and conversion opportunities.
- SpendAdvisor Pharmacy Spend. This program estimates rebates and tier performance in the middle of a performance program’s evaluation cycle, assisting members in changing spending habits to meet savings goals.
- Premier Consulting Solutions (PCS). PCS offers consultative services, enabling hospitals to improve clinical, financial and operational performance.
- Pharmacy. Pharmacy includes the following solutions:
- SpendAdvisor Pharmacy Spend. (Discussed above.)
- Auto-Substitution. A cross-referenced substitution list links all equivalents, generic-to-generic, brand-to-generic and ampule-to-vial to an auto-substitution product to ensure that members have access to the lowest prices on generic pharmaceuticals.
- Plasma. Products are assigned to Premier so they can be reallocated according to members’ needs. This group effort provides flexibility and helps to ensure product availability to all members. (Discussed below.)
- Pharmacy consulting practice. This program is staffed by 13 pharmacy consultants who have completed over 50 projects in three years, saving members in excess of $30 million.
- SafetySurveillor – Pharmacy. An automated medication management solution offered by Premier Informatics, this Web-based tool is designed to enable clinicians and infection control professionals to optimize anti-infective usage, enhance outcomes and reduce the costs associated with medication errors.
- Center for Evidence Based Pharmacy Practice. The program houses intellectual property compiled over three years of pharmacy consulting and tool kits on timely topics, which enable members to implement formulary strategies. Premier also offers a one-stop shop pharmacy Web site.
- ValueAdvisor. ValueAdvisor serves as a central repository of all information related to supplies and technologies under review, offers insight into the accomplishment of expected improvements and/or cost reductions, and provides a workflow process that drives each initiative.
- Rational Choice Med/Surg. Rational Choice M/S cuts the costs in commonly used, typically low-cost supplies by providing a minimum 5 percent savings in aggregate above the Premier national agreements through additional aggregation and commitment to standardization. Open to all members, the voluntary program provides substantial savings through 36-month agreements. More than 40 product categories are scheduled for release in waves in the next 36 months. Members can elect to participate in as many categories as they wish.
- Best Practice Tray (BPT). An alternative to more expensive custom procedure trays, BPTs reduce the cost of high-volume surgical procedure trays by 20 percent or more. The first 10 trays, which have pre-determined components, have included cystoscope, laparoscopic cholecystectomy, laparotomy, C-section, general minor, angiography, ortho-upper extremity, ortho-total hip, ortho-total knee, and ortho-knee arthroscopy packs. Other BPTs are expected to be introduced.
- Plasma Program. Plasma and recombinant products are allocated to Premier members via an interactive allocation process, which allows assignment and reassignment of products, such as IVIG and albumin according to the patient needs within member facilities
- SpineAdvisor. SpineAdvisor helps members improve quality and decrease costs related to the use of implants and devices in spinal surgery. The program measures cost and quality performance for product conversion, physician engagement and process improvement. Clinical tools and resources, as well as reimbursement information, are available to assist with the clinical, coding and financial responsibilities.
JHC: In addition to new services, please list and explain your top programs (apart from your contract portfolio).
Premier:
- SpendAdvisor.
- Pharmacy program.
- Voluntary aggregation opportunities. Premier encourages local, regional and affinity buying opportunities that enable members to collaborate in specific ways for optimal negotiating power. Voluntary aggregation opportunities achieve savings for our members in the following ways:
- Create “bulk buy” opportunities.
- Create a custom “collaboration tier” not currently recognized under a national agreement.
- Achieve a higher contract tier on an existing agreement.
- Negotiate improved delivery and payment terms.
- Establish coverage where Premier does not currently have a contract.
- Rational Choice Med/Surg.
- Collaborative Breakthrough Series. The series uses the Institute for Healthcare Improvement’s (IHI) model for improvement. Participants collaborate with peers from other healthcare organizations to accelerate improvements. During the nine-month program, teams meet in face-to-face learning sessions three times, reinforced by monthly reports and conference calls as well as daily communications through Premier’s e-mail discussion list. The current series is addressing blood and blood products, cardiovascular, contract administration, orthopedic implants, perioperative, and revenue cycle.
JHC: What sets these programs apart from similar services offered by other GPOs?
Premier:
- SpendAdvisor. As part of its commitment to members through a performance partnership, Premier is convinced that the future success of supply chain management and supply expense management lies in the effective manipulation and interpretation of data to make informed decisions.
- Pharmacy program. Premier works to help members achieve best value in the following ways: Deploy more skilled professionals dedicated to helping members with effective drug utilization management; offer a comprehensive generic auto-substitution program assuring participants of a 5 percent price advantage; offer Spend Analytic tools to capture missed savings and optimize value and to help pharmacists proactively manage complex performance marketing programs; staff a Center for Evidence Based Pharmacy; provide a variety of clinical and operational benchmarking tools.
- Voluntary aggregation opportunities. Premier not only responds to members who wish to be a part of a voluntary aggregation opportunity, such as a regional collaborative, but also actively encourages creative aggregation opportunities so that members can leverage greater volume, commitment and standardization into lower prices.
- Rational Choice Med/Surg. This program, which provides additional discounts off national contracts, especially benefits small members.
- Collaborative Breakthrough Series. What really sets the Collaborative Breakthrough Series apart is its multi-disciplinary team approach, which brings together clinicians, finance and materials to discuss the latest change concepts that have been implemented in hospitals, along with direction as to how to implement the concepts.
JHC: What additional programs/services do you offer?
Premier:
- Safety Institute. The Institute is an integral part of the group purchasing process and assists with the selection, review and contracting for high quality and cost-effective products and services that enhance the clinical and environmental safety and health of patients and healthcare workers.
- Supplier Diversity Initiative. Supplier Diversity integrates inclusive diversity practices into group purchasing contracting, allowing Premier members to support minority, women, veteran, and small business suppliers through Premier agreements. Members have access to resources for developing, managing and improving their supplier diversity efforts, and Premier is piloting fee-for-service consulting to help members develop stronger programs.
- Healthcare Informatics. Healthcare Informatics supports hospitals’ quality improvement and labor management initiatives. The information in the Informatics data warehouse, Premier’s Perspective™ database, allows Premier to understand the relationship between quality, safety, risk, labor cost, supply cost and revenue.
- Performance Suite™. Performance Suite provides Web-based performance measurement and benchmarking tools, real-time surveillance, and best practices to help hospitals improve quality and safely reduce costs.
- Premier Insurance Management Services (PIMS). PIMS helps Premier members with property protection and reducing risk. The program offers members a comprehensive portfolio that includes risk management, employee benefits, and property and casualty coverage.
| What Premier is
Premier Inc. is a hospital performance improvement alliance with 1,700 participating not-for-profit hospitals and health systems serving communities nationwide. 200 hospitals and health systems created and entirely own the Premier alliance. Premier’s core purpose is “To improve the health of communities.” Why Premier exists Who owns Premier Source: www.premierinc.com |
Novation
The Journal of Healthcare Contracting: What are the greatest challenges for GPOs trying to differentiate their services and programs from those of their competitors?
Novation: There is a lot of change in the industry right now. Today, there is greater competition, and hospital members have higher expectations. Hospitals are starting to take a more aggressive approach to controlling costs, and they want more member-specific data to find those areas they can affect quickly. As supply chain has become elevated within healthcare, we are seeing more and more emphasis on proving the value delivered through group purchasing. As competition increases and member needs change, GPOs must find more efficient and cost-effective ways to meet those needs. Due to the continuous changes in the industry, GPOs are becoming more focused on those areas that they are good at and that drive the most value to differentiate their services and programs from their competitors.
JHC: When your GPO implements a new program for its members, how does it maintain an edge over competitors who follow suit with similar programs?
Novation: Novation constantly monitors market conditions, suppliers’ performance and adherence to contract terms to ensure that our agreements provide alliance members with the best value. As appropriate, contracts are adjusted and enhanced to meet changing market dynamics and unique member needs. In addition, Novation constantly reviews and evaluates products and services being developed by suppliers and works with members and suppliers to resolve issues and remove barriers to value.
Novation markets its contract agreements to alliance members through a variety of communications vehicles to help keep members up-to-date about new contracts, price changes, product shortages, recalls and industry news and clinical information. Novation contracted suppliers are also provided with timely news and information, which allows them to maximize their agreements with Novation.
JHC: Please list and explain your top programs (apart from your contract portfolio).
Novation:Beyond a national portfolio and advanced contracting services, Novation has used its expertise and experience to create innovative savings programs designed to deliver additional value to members and suppliers alike. These programs include the following:
- NOVAPLUS. Novation’s private label – NOVAPLUS – provides high quality, non-clinical-preference medical, surgical and pharmaceutical commodities that supercede national brand pricing and help members achieve standardization.
- Standardization Programs. Standardization is one of the most challenging aspects of supply chain management. Novation’s purchasing programs reward members based on their participation and ensures lower prices, enhanced patronage dividends and improved operational and staffing efficiencies. Novation’s Standardization Programs include: anesthesia, food service, medical, NOVAPLUS pharmaceutical, respiratory and surgical.
- Capital Equipment Group Buys. Based on member research and the aggregation of planned purchases, group buys provide members with even greater discounts and additional value, above and beyond existing Novation contracts. Equipment categories included in Novation’s group buys typically represent the top 50 percent of capital expenditures by alliance members.
- Custom Contracting. Novation offers flexible custom supply cost management options or custom contracting services, which are negotiated to meet the unique needs of individual members or groups of members.
JHC: What sets these programs apart from similar services offered by other GPOs?
Novation:Our programs are unique in the following ways:
- Novation is one of two GPOs that has a private label brand.
- NOVAPLUS offers more than 1,300 products from the industry’s leading manufacturers.
- Since its inception in 2005, Novation’s capital equipment program has helped alliance members save more than $64 million.
JHC: What additional programs/services do you offer?
Novation:
- Supplier Diversity Program. Novation’s Supplier Diversity Program is committed to the inclusion of approved minority, women and small veteran (veteran, disabled veteran, service-disabled) business enterprises (MWVBEs) as an integral part of the Novation supply chain management process. The members we serve are committed to economic development in their communities. The program will serve as an avenue to assist them in developing and using these businesses in their communities where appropriate. Novation has established the program as part of its commitment to supporting MWVBEs that meet high quality standards.
- Clinical Solutions. Studies indicate that healthcare organizations can achieve cost reductions of up to 14 percent through more efficient product standardization and utilization. Recognizing the value to be gained in this area, Novation has dedicated a team to the development and implementation of standardization and utilization programs. We also share programs and processes that have proven to be successful for other healthcare organizations. This continuum of education, tools and other resources helps members and supply partners work collaboratively to reduce costs.
- Safety Initiative. Novation’s comprehensive safety initiative promotes and enhances patient, employee and environmental safety. Through this initiative, Novation strives to increase member awareness of its safety-related contracted products; catalogs supplier safety initiatives; obtains member input on safety issues; keeps members informed about current safety issues; and incorporates safety specifications into the contract process.
- Innovative Technology Evaluations. The intent of Novation’s new medical technology evaluation process is to identify devices or products that are used to diagnose or treat patients and that offer incremental benefits to patient care, patient safety or healthcare worker safety. When evaluating new medical technology proposals from suppliers, Novation considers such factors as whether the product is used to diagnose or treat patients, member interest in and demand for the technology, and advantages and disadvantages when compared with similar products. When appropriate, members with expertise specific to the proposed new technology and third-party sources will provide input into the assessment.
VHA and UHC
Irving, Texas-based VHA created Novation in January 1998 (along with Oak Brook, Ill.-based University Health Consortium) to purchases supplies, devices, drugs and capital equipment. VHA itself offers a wide range of supply chain management solutions. Two of the newest capabilities are analytics and physician preference management solutions. VHA also manages about 70 contracts that cover the most common services used by hospitals, such as telecommunications services. VHA members purchase $2.1 billion worth of services through VHA annually.
In addition to these services agreements, VHA members can also tap VHA for consulting services that cover clinical improvement, supply chain improvement, capital equipment planning and pharmacy improvement. Through VHA’s 17 regional offices, members can join collaboratives that target common operational and clinical challenges and problems that are specific to distinct geographies. For example, VHA’s Mountain States office sponsors a learning network that enables hospitals in resort communities to learn from one another and share ideas for coping with staffing, clinical and supply issues that arise when community populations double or triple during certain periods of the year. Another VHA region has formed its own malpractice insurance company to serve the needs of members in the region.
Meanwhile, University Health Consortium offers a variety of management information tools, benchmarking tools, clinical effectiveness and system redesign programs, and supply chain optimization programs. For more information, visit www.whc.edu.
| Getting to know Novation’s Joellyn Willis
Joellyn Willis is president of Novation, the healthcare contracting services company for VHA Inc. and the University HealthSystem Consortium (UHC). Willis was formerly vice president of supply chain management for Constellation Energy Group, a Fortune 200 competitive energy company, based in Baltimore. In that capacity, she was responsible for leading corporate and supply chain strategy for the organization. Prior to joining Constellation, Willis worked as a consultant for two years in the manufacturing industry. Willis has more than 15 years of senior leadership experience directing sourcing and logistics operations in the electronics and utilities industries. Throughout her 25-year career, Willis has led organizations to create and use best practices and implement innovative supply chain processes, driving substantial savings along the way. |
HealthTrust
The Journal of Healthcare Contracting: What are the greatest challenges for GPOs trying to differentiate their services and programs from those of their competitors?
HealthTrust: The biggest challenge is overcoming the myth that all GPOs are the same. HealthTrust is a company of operators, and we demonstrate our competitive differentiation on a daily basis with our extensive contract portfolio coverage and industry-leading pricing. The second biggest challenge is overcoming the belief that “more is better.” Our goal at HealthTrust has never been to be “all things to all people.” Our mission at HealthTrust is to provide the best clinically recommended products for the best price – a commitment we have never strayed from.
JHC: When your GPO implements a new program for its members, how does it maintain an edge over competitors that follow suit with similar programs?
HealthTrust: Since its inception, HealthTrust has stayed true to its primary mission of “best products for the best price.” Focusing our efforts on industry-leading contracting, we have consciously limited the number of new programs that we have implemented and instead provide our members with the true sustainable value that we originally had in mind – best product pricing.
JHC: What new services or programs (in addition to your contract portfolio) have you offered your members in the last 12 months? Please list and explain these in detail.
HealthTrust: One of the most valued services we provide is our Strategic Sourcing (S2) contracting program. Our S2 program has a very extensive contract portfolio with several suppliers, which includes spinal and trauma implants, hips knees, and small joints. In addition to our orthopedic portfolio, we also have some exclusive contracts such as Kyphon for kyphoplasty procedure and Infuse (bone morphogenic protein) offered through Sofamor Danek. Lastly, we have several minimally invasive, cutting edge orthopedic products under contract. Our cardiovascular portfolio is also extensive, and we cover exclusive product areas, such as carotid stents, tissue valves, and dozens of proprietary products offered by the supplier community.
JHC:In addition to new services, please list and explain your top programs (apart from your contract portfolio).
- Emerging technology. Free consulting on capitol equipment purchases (regardless of contract).
- Monthly technology newsletters.
- Customer service. Knowledgeable, fast, efficient, and responsive.
- Account management. Seasoned personalized account managers assigned to each member.
- Standardization Incentive Program (SIP). Incentive program that provides additional level of financial benefit.
- Audit. Aggressive pricing and rebate tracking, which allows millions of dollars to be returned to our members yearly.
JHC: What sets these programs apart from similar services offered by other GPOs?
HealthTrust: HealthTrust’s commitment to the customer is validated in our pricing portfolio and our retention rate. Since our inception in 1999, HealthTrust has averaged a 99 percent retention rate. We believe it is facts like these that set us apart from other GPOs.
JHC: What additional programs/services do you offer?
HealthTrust:HealthTrust offers a number of exclusive services, including the following:
- Implementation. One of the most important services that we offer new customers is our implementation plan. Second to pricing, we have found implementation to be another area of concern for potential customers.
- Rigorous clinical advisory boards. HealthTrust’s clinical advisory boards are comprised of clinicians from our member facilities who solicit input from their peers to identify high quality supplies, equipment and services that should be considered for our contracts.
We employ 13 boards: Our clinical boards include laboratory, nursing, pharmacy, radiology and surgery. Ad hoc/specialty boards include respiratory, wound care, neonatal, spine and cardiovascular. And, our non-clinical boards include materials management, food and nutrition and information services.
We believe our uniqueness is the rigorous and consistent technical review processes that all products on our contracts are subject to. Even something as simple as a color change (white to blue gloves, green to clear syringes) from the same manufacturer may be run through a second clinical product evaluation. In addition, our boards are not affiliated with our contracting department, thereby avoiding any bias towards specific vendors or manufacturers.
Consorta
In April 2007, Schaumburg, Ill.-based Consorta Inc. and HealthTrust Purchasing Group finalized an agreement establishing Consorta as the sixth equity owner in HealthTrust. HealthTrust is now responsible for all GPO operations, including contracting. Consorta remains an independent organization, serving on the HealthTrust Board of Advisors, as well as providing educational and analytical programs. While all 3,000+ Consorta members currently can take advantage of the HealthTrust contracting benefits, over the next 18 months, they will convert from Consorta to HealthTrust contracts.
Amerinet
The Journal of Healthcare Contracting: What are the greatest challenges for GPOs trying to differentiate their services and programs from those of their competitors?
Amerinet: Providing relevant, cost-effective solutions that help members deliver the highest quality care possible is the most important objective that healthcare purchasing organizations face. At Amerinet, we are dedicated to developing programs and services that truly make a difference or bring measurable value to our members. Through research and development, we make certain our members are able to deliver quality patient care by having the most effective resource strategies available to control supply chain and procurement costs.
JHC: When your GPO implements a new program for its members, how does it maintain an edge over competitors that follow suit with similar programs?
Amerinet: Through execution and feedback, we continue to upgrade and revise our products and services based on the critical data collected from our members. Members’ input provides actionable information that we use to enhance our programs and services. Amerinet’s contract and clinical specialists augment our programs and services. These industry-minded individuals have actually worked in their field of specialty. They speak the same language as our members, and are better equipped to meet members’ needs.
JHC: What new services or programs (in addition to your contract portfolio) have you offered your members in the last 12 months? Please list and explain these in detail.
Amerinet: Amerinet recently created a new initiative for members for the Hospitals for a Healthy Environment (H2E). Jointly founded by the American Hospital Association, the Environmental Protection Agency, Health Care Without Harm and the American Nurses Association, H2E is an independent, not-for-profit organization focused on improving the environmental performance within healthcare. Amerinet was recognized by H2E for its efforts in helping members identify and develop strategies to support a healthy, clean environment.
JHC: In addition to new services, please list and explain your top programs (apart from your contract portfolio).
Amerinet:
- Member Resources. Member Resources provides real-time Internet access to members’ contract information, purchasing history and financial information. Features include Portfolios, TargetBuys, Reports, ValueSource and Financial Optimization Tools. The program is a critical pathway for Amerinet members to access real, cost-effective solutions, products and services. It assists members in controlling costs, saving money and tracking spending habits. The resources section of Amerinet’s Web site provides the following data on members:
- Contract search sourcing information
- Access to contract data sheets
- Online contract access/sign-up
- Contract update information
- Pricing information at item-level detail
- Item-level savings calculator
- Contract purchase activity report
- Market baskets
- Cost studies
- Access to electronic contract catalog of products and services.
- Amerinet Clinical Advantage Program (ACAP). ACAP is comprised of an innovative group of professionals spanning all aspects of the medical community. They are dedicated to improving efficiencies and reducing clinical-related expenses through a total spend management approach to margin improvement. This dynamic team of clinical and supply chain specialists will work closely with members’ staff to identify and maximize saving opportunities by doing the following:
- Benchmark implant costs
- Provide credible data
- Improve physician relations
- Reduce device costs
- Maximize contracts.
- Amerinet Diagnostix™. Amerinet Diagnostix is a subsidiary of Amerinet Inc., which provides data management and analysis tools to help healthcare providers optimize their financial performance through a total spend management approach to margin improvement. Diagnostix tools and services provide the following solutions:
- AccuPrice, a newly updated pharmacy price-auditing tool, which enables pharmacy directors to reduce the number of credits and rebills, saving time and money.
- AccuSave, a supply chain optimization and data management tool.
- Supply Chain Consulting, which offers on-site expertise to create and implement a roadmap to savings.
- Spend Analysis, which identifies cost-savings opportunities in the supply chain.
- Decision Dashboards, which provides a gateway for tracking and measuring total supply spend.
- Diagnostix tools enable members to work more efficiently in the following ways:
- Analyze total supply spend
- Identify cost-savings opportunities
- Improve margins
- Improve pricing through Amerinet Options® contracts when appropriate
- Optimize contract purchases
- Eliminate redundancy
- Reduce variability
- Reduce supply chain expenses
- Identify and eliminate pricing variances within the hospitals’ systems.
Diagnostix’s data management tools analyze, mine and utilize data from throughout the supply chain to help identify, track and realize hard-dollar savings and margin enhancement opportunities.
- Supply Chain and Clinical Consulting Services. Amerinet’s supply chain and clinical consultants implement a total spend management approach that assists healthcare providers with achieving economic, performance and patient care goals. Through a strategic spend and clinical analysis, Amerinet’s specialists work with each member to identify saving opportunities and provide a fully customized solution. They interface with every aspect of the organization including executive, clinical, pharmacy, laboratory, materials, physical plant, construction, energy, labor management, IT and dietary, advising providers in matters where patient care and purchasing intersect. Our solutions ensure long-term value throughout the healthcare system by implementing best practices in process and technology through our total spend management services, including data resources, clinical collaboration, contract maximization, professional development and resource utilization. Throughout the process, healthcare providers define product specifications and requirements for quality, service and cost. In return, Amerinet provides the experts to assist members in choosing the right product and service that helps deliver the highest quality care possible.
- Capital Budget Initiative. We further assist our members by aligning their capital needs with the appropriate contract through our new budget match process. This initiative takes the appropriate contract and market-based valuation to support the budget process. The program more accurately aligns healthcare providers’ resources with the capital expenditures they are preparing to make.
JHC: What sets these programs apart from similar services offered by other GPOs?
Amerinet: Amerinet is unique in its program execution, service and the drive for customer satisfaction.
JHC: What additional programs/services do you offer?
Amerinet: We recently have partnered with Energy Star®, the U.S. Environmental Protection Agency’s (EPA) voluntary program that offers businesses and consumers energy-efficient solutions to help save money while protecting the environment. Through the program, healthcare providers can reduce costs, eliminate energy waste and implement new energy management practices. The EPA has developed a rating system through Energy Star, which enables hospitals to measure their energy performance based on how they compare to similar facilities nationwide. Amerinet works with its members to establish an Energy Star rating and create a strategic approach to better manage energy consumption.
| Getting to Know Amerinet’s Todd Ebert
Todd Ebert, Amerinet’s president and COO, oversees all customer-facing functions, including operations, sales and marketing. Prior to his appointment as COO, Ebert served as president since November 200
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MedAssets
The Journal of Healthcare Contracting: What are the greatest challenges for GPOs trying to differentiate their services and programs from those of their competitors?
MedAssets: Our model emphasizes accountability for controlling supply prices and total cost of procurement. In addition to supply chain management, MedAssets has added revenue cycle management, decision support, clinical performance improvement, supply chain data management and more. This allows us to focus on helping our clients improve their financial performance beyond traditional supply chain management techniques. We also work with other MedAssets business units to innovate and solve customers’ problems. For example, our CrossWalk® product seamlessly links the master item file with the chargemaster, enabling our customers to see when they are under- or over- charging for supplies and correct processes that lead to inefficient purchasing. We develop products by listening to what our members need.
JHC: When your GPO implements a new program for its members, how does it maintain an edge over competitors who follow suit with similar programs?
MedAssets: We pay attention to the unmet needs of our membership in the marketplace, as well as the possibilities for creating new solutions that enable our customers to improve financial performance. Having all of our offerings under “one roof” enables us to work with one partner for a coordinated approach to data collection and performance measurement, and to see the total cash created by the relationship.
JHC: What new services or programs (in addition to your contract portfolio) have you offered your members in the last 12 months?
MedAssets:
- Quarterly Group Buys. In 2006, MedAssets launched an enhanced program for capital Group Buys that provides a timely and effective process for identifying customer needs. The new program also gives the MedAssets’ contracting team enhanced ability to negotiate exceptional savings for total life cycle cost of ownership for capital equipment. As part of the newly designed process for Group Buys, MedAssets intensely markets these initiatives to its customer base. By focusing on increasing awareness of each Group Buy, MedAssets drives value for both the customer and vendor.
- Expanded food and nutrition services through partnership with FoodBuy. In April 2006, MedAssets Supply Chain Systems formed a partnership with the nationwide food service group purchasing organization, Foodbuy, LLC. The agreement enables MedAssets’ customers to experience additional savings on purchases made utilizing Foodbuy’s food and nutrition contracts. The increased savings is available as a result of leveraging Foodbuy’s $4-plus billion purchasing volume with MedAssets. MedAssets customers also have access to over 600 manufacturers’ contracts for additional cost savings. Foodbuy offers MedAssets Supply Chain Systems and its customers a comprehensive suite of procurement and supply chain services for food, non-food and service categories.
- Environmental purchasing. MedAssets Supply Chain Systems received a Hospitals for a Healthy Environment (H2E) Champions for Change Award for its leadership and support in helping hospitals improve their environmental performance while maintaining quality patient care. MedAssets was recognized for its environmental program, which focuses on mercury elimination, waste reduction, toxic substance minimization and environmentally preferable purchasing activities. In 2005, utilization of MedAssets’ online resource center increased 63 percent; 77 percent of new contracts met mercury elimination standards; and contracts for waste-reduction consultation services, recycling and reusable sharp container systems were established for member utilization.
- Executive Services Program. All MedAssets group purchasing customers now have access to the Executive Services Program made available through the acquisition of Shared Services Healthcare (Atlanta) in February 200
- The Executive Services contract portfolio assists healthcare executives in controlling administrative expenses and identifying high-quality business partners to provide needed professional services. The program includes the following services:
- Consulting. Services address such items as JCAHO preparation, labor and productivity, supply chain management, service line reviews, facility analysis and leadership development.
- Employment and human resources. Services support employee recruitment, development and retention efforts.
- Insurance. Solutions are provided for all risk financing needs.
- Information technology/niche software. Services assist in gaining operational efficiencies and data compliance.
- Outsourcing. Solutions facilitate an increased focus on core competencies.
- Revenue cycle management. Services and technology address revenue challenges across the healthcare continuum.
In addition to supply chain offerings, the acquisition of Avega Health Systems has allowed MedAssets to offer our customers decision support technology. In addition, MedAssets’ service line consultants can facilitate action items uncovered with decision support tools and teach the hospital how to use the information for a positive impact. Avega solutions combine financial, clinical and operational data for a clear look at performance and profitability.
To address revenue cycle, CDM Master®, a chargemaster monitoring and maintenance tool, was launched in February 2007. This solution assists hospitals in maintaining appropriate charges for services and incorporates defensible pricing tools so that charges can withstand public scrutiny.
JHC: In addition to new services, please list and explain your top programs (apart from your contract portfolio).
MedAssets:
- CDQuick® e-catalog. CDQuick features over 1,000 contract coversheets, 600,000+ line items, 4,500+ users and 90,000 searches per quarter. It is also the source for many other MedAssets Supply Chain Systems’ tools, including the following:
- Pharmacy Audit. Advanced Pharmacy Purchase Order price audit tool.
- ALERTS System. Customized “alert notification” of all contract changes and important issues.
- Executive DASHboard. Summary of a facility’s entire MedAssets GPO contract purchasing data in an easy-to-interpret, visual format. This information, together with the facility’s key indicator data, provides relevant statistics on performance and contract utilization and permits viewing of multiple facilities.
- CAPTURE® Templates. Charts of products used in individual departments designed to help simplify product ordering and cost-reduction.
- MedAssets e-Newsletters. Timely information regarding contracting services, updates on new and renegotiated contracts and features about suppliers and their value-added services.
- MedAssets Annual Budget Forecast Index. Forecast of future price changes.
- Strategic Information Services. Strategic Information Services (SI) is the audit function that shows correct contract pricing and occurrences of price variation. It clarifies supply chain data across multiple facilities for national benchmarking. The data provides audit reports showing when a customer did or did not get the contract price. This includes such information as price variance reports showing variation within certain time periods; database maintenance reports indicating areas in need of database clean up; and non-contract-opportunities reports showing suppliers and items that were purchased off contract. Other SI services include:
- Local Compliance Catalog (LCC). A customized version of CDQuick, the LCC is a single repository for all contract information, including GPO, system, regional and local contracts.
- Master Item File Services (MIF). MIF creates one database with a standardized list of items and nomenclature from the materials management information systems or enterprise resource planning supply chain item masters. Unnecessary items are removed from the item master, and relevant items are added. This service promotes better analysis of data and supports on-contract purchases.
- Strategic Information for Pharmacy. This solution provides pricing discrepancy review and resolution, failure to supply tracking and recovery, monitoring of marketshare programs with real-time performance reports and practical reports offering cost-saving contract alternatives to selected items that were purchased.
- Clinical Pharmacy Program. Clinical Pharmacy Program helps member pharmacies and medical practitioners stay abreast of pharmaceutical news and research, make clinically optimal and fiscally appropriate choices and gain knowledge and support through peer interaction. MedAssets offers a number of services, including Formulary Management Assistance, Information Services and Publications, Educational Programs, Consulting Services, Research, DSH Inpatient Program, 340B Program FAQS and Disease State Management Processes.
- Custom Advantage™. MedAssets Contracting Teams work with IDN teams to identify, prioritize, and co-develop Custom Advantage™ agreements unique to customers based on individual needs, local competitive factors, volume and compliance capabilities.
JHC: What sets these programs apart from similar services offered by other GPOs?
MedAssets: CDQuick, Strategic Information, and Pharmacy Audit are proprietary software of MedAssets. Implementation and Custom Advantage are also proprietary processes formulated with our knowledge and experience.
JHC: What additional programs/services do you offer?
MedAssets: We continue to take on greater responsibility for improving the financial performance of our customers. Our GPO, MedAssets Supply Chain Systems, is one of the subsidiaries and focuses on supply procurement management. Additional subsidiaries enable MedAssets to provide many other solutions to problems outside of supply chain including the following:
- Revenue cycle management
- Supply chain analytics
- Decision support systems, including budgeting, managed care contract management and cost accounting
- Clinical performance consulting to improve key service-line performance
- Supply chain performance consulting.
| MedAssets Values
Compassion – We value people and strongly believe that everyone is entitled to treatment that is dignified and loving. We believe providing care to those who need it most is the foundation of servant leadership and we respect and support our customers’ commitment to this task. We support our industry through programs that advance the quality of care through education. We are socially responsible and invest our time and resources in activities that bring measurable value to the communities we serve. Character – We conduct ourselves with the highest levels of integrity and fairness. We lead with brutal honesty. We strive to surround ourselves with diverse individuals who possess an intense work ethic, high moral standards, and who are recognized by their dependability and commitment to excellence. We take pride in the work we do as a team. We are passionate about our industry and our desire is to win business in a fair and honest manner. Confidence – We believe that true empowerment breeds excellent customer service and individual satisfaction. We make positive things happen. We are experienced and knowledgeable on many of the issues that keep our customers awake at night. We attempt to provide innovative solutions that are practical, flexible, and known for their quality and value. Commitment – We are responsive to the needs of our customers and do everything we can to assure their success. We are committed to providing a workplace where employees are given the direction, tools and freedom to accomplish great things. We reward excellence. We believe that financial stewardship is prudent and necessary. We strive to maximize financial returns for all our stakeholders, including our customers, suppliers, shareholders and employees. Source: www.medassets.com |