Purchased services: Not so different than PPI
To the Editor:
I just wanted to drop you a line and say that I enjoyed your articles on purchased services. [“Purchased Services: A Strategic Approach,” October 2015 Journal of Healthcare Contracting.] Purchases services is an area that we have been addressing since I arrived at Piedmont. Having said that, it seems to be an area that has been recently discovered by the healthcare industry. In fact, every consultant and GPO now offers a purchased services “solution.”
It reminds me of the early days of the discovery that there may be an opportunity in this new thing called “physician preference items.” The truth is that, just like PPI, we often have the skills and talent in place to address these opportunities. Much like the character in the “Taken” movies, supply chain professionals have the unique set of skills to help their customers to reduce spend in these areas.
I would also say that I agree with the comments that much like physicians and PPI, there can be an emotional attachment to some of these vendors. Just like PPI, I think the secret to success is having built a prior relationship with customers that results in trust and a willingness to work to a common goal and their full participation in the process.
I would encourage any of my supply chain comrades to take on the purchased services space and feel confident that it is no more difficult then PPI and can be addressed with similar tactics.
Joe Colonna
Vice President of Supply Chain
Piedmont Healthcare
Atlanta, Ga.
NEWS
Court rules that UPMC must provide in-network services to Highmark Medicare plan members
The Pennsylvania Supreme Court ruled that UPMC (Pittsburgh, PA) must continue to provide in-network services to members of Highmark Inc’s (Pittsburgh, PA) Medicare Advantage plans. The state took UPMC to court after it announced plans to end its Advantage contracts with Highmark because Highmark allegedly failed to pay UPMC contracted rates for oncology care. The Court’s ruling affirms a state judge’s May 2015 decision that the system must remain an in-network provider for Highmark’s Medicare Advantage plans under the term of a consent decree reached between the two organizations and state officials in 2014.
Tenet to sell five Atlanta-area hospitals to WellStar for $661M
Tenet Healthcare Corporation (THC) (Dallas, TX) entered into an agreement with WellStar Health System (Marietta, GA) through which WellStar will purchase and manage Tenet’s five Atlanta-area hospitals and 26 physician clinics. The deal has a sale price of $575 million and WellStar will assume $86 million in debt, for a total transaction value of $661 million. The hospitals included in the deal are Atlanta Medical Center (Atlanta, GA), Atlanta Medical Center – South Campus (East Point, GA), North Fulton Hospital (Roswell, GA), Spalding Regional Medical Center (Griffin, GA), and Sylvan Grove Hospital (Jackson, GA). The facilities have a combined total of 1,192 beds, 4,300 employees, and 1,390 doctors. The sale is expected to be finalized in Q1 2016, subject to regulatory approvals and other closing conditions.