By seeking input from all of its members, Intalere Eastern Alliance continues to add new contracts and increase savings for its participants
Amerinet Eastern Alliance was formed in 2013 with the intent “to bring the purchasing power of all of the facilities Amerinet represented together to standardize and lower cost,” David Hanline, then vice chair of AEA and director of ancillary services at OSS Health (York, Penn.), said in a 2015 interview with The Journal of Healthcare Contracting.
Three years after it was first formed, we checked in on the alliance – now known as Intalere Eastern Alliance (IEA) – to see how it has developed since we first spoke. Following is an interview with Don Smalley-Rader, senior director of strategic alliance solutions for Intalere.
Don Smalley-Rader
Journal of Healthcare Contracting: Almost two years ago, David Hanline, vice chair of what was then called the Amerinet Eastern Alliance, told JHC that AEA had 14 organizations, ranging from ambulatory surgery centers, clinics, profit and not-for-profit hospitals. Can you give us an update? How many organizations? What types of facilities are they? Over what geographic area are they spread?
Don Smalley-Rader: [Intalere Eastern Alliance] is comprised of six regional subgroups representing 212 parent organizations. They are comprised of all classes of trade such as physician office groups, surgery center groups, critical access and small regional hospitals. They are mainly in the eastern half of the country, but the Alliance’s committed contract program is available to Intalere members throughout the country.
JHC: Many regional purchasing coalitions seem to be comprised primarily of acute-care facilities and systems. Is Intalere Eastern Alliance different in this regard?
Smalley-Rader: Our program is designed so that all healthcare facility types are able to participate. Compliance is based on the categories you actually purchase and you are not penalized if you do not purchase product within the category. The leadership council members (comprised of participating members in all [classes of trade]) specifically wanted to build a program that enabled this. Their goals were to design a program that was inclusive and enables all of our regional sub group members (212 total) to be able to opt into the program if it made sense to them financially and they were able to convert to the vendors within the program.
JHC: Can you please talk about your “management structure?” In other words, do you have full-time staff devoted to running IEA?
Smalley-Rader: Intalere’s Alliance program is staffed full time with four team members that are 100 percent dedicated to the growth and maintenance of the Alliances at Intalere. In addition to this we have a custom contracting team that is dedicated to our alliance contracts and enhanced tier program. Our account management teams and program specialists are in partnership with us to provide our Alliance members the best support available to GPO members anywhere. The true difference is that we employ member-driven boards to assist in driving the direction of each regional sub group as well as having an eight-member leadership council work on program oversight and development.
JHC: Can you explain the process whereby your supply chain executives meet and make their decisions?
Smalley-Rader: Our regional subgroups meet quarterly to review the needs within their region and to collect input from membership on future program advancements. We base all decisions on group spend and seek members’ input into all decisions before enhancing or creating new contracts for the group. Vendors provide contract enhancement presentations at these regional meetings, and additionally, we seek industry-specific education for our members based on their requests.
JHC: When we last spoke with IEA, we learned that initiatives pursued in the prior 12 months included distribution, negative pressure and wound care/bandages. How are those agreements progressing?
Smalley-Rader: We have progressed positively in regards to the creation and expansion of our programs. We typically add 16 to 20 contracts/enhancements annually to our IEA base portfolio offering to our alliance members. And [we] are putting the finishing touches on our committed program portfolio, which is averaging 17 percent additional savings to our members off contracted pricing.
JHC: Any lessons learned since you signed them, in terms of how contracting on behalf of an RPC differs from contracting for a single hospital or hospital system?
Smalley-Rader: It is critical for the success of any regional collaborative to be driven from the members’ perspective. If decisions are made without the data and the full support of your program members, you will be doomed to failure. These two elements are the very essence of a successful program. One other element that is critical is to work with vendors who truly want to partner with your organization’s goals. If there isn’t a sense of team from the member, vendor and GPO, this program doesn’t work.
JHC: Since signing the agreements, what have been your primary contracting initiatives?
Smalley-Rader: We continue to evolve the Alliance programs based on our members’ input. No collaborative should ever be a static program. What worked two years ago may be fine or, based on the evolving healthcare landscape, may need only minor tweaks or a major overhaul. The idea is to embrace change and stay ahead of the curve. Our past initiatives mainly focused on the med/surg product categories. We plan to look into all areas of spend and assist in the development of programs that benefit our members in every avenue of cost to the membership.
JHC: Two years ago, David Hanline told JHC that participating IEA members gained a lot more than good contracts, namely, “The ability to sit and discuss issues that your facility may be facing and figure out solutions together,” many of which are not even related to purchasing. How would you describe the non-contracting-related benefits to healthcare organizations who commit to an RPC?
Smalley-Rader: The networking that occurs within a successful collaborative should be the driving force of why a member attends quarterly meetings and participates in these programs. The sharing of ideas, successes and, frankly, the failures they experience is invaluable to them as a whole. History is the great educator and if we can avoid mistakes by learning from our respected peers it is a great time- and expense-savings. The greatest quotes I get usually come from prospective members who attend our meetings as guests. They can’t believe the culture and environment we foster as a group. Even though they are not members, our staff and membership seek out their input based on their outside perspective and they are made to feel like what they share with us matters. It is a culture that many are amazed at and undeniably why, once we get them to attend, it is a far easier path to get them to join and participate.
JHC: How do you and Intalere interact? For example, do you use Intalere contracts or not? Do you rely on Intalere people to be actively engaged in IEA? Why or why not?
Smalley-Rader: IEA and Intalere are a joined program. Intalere is the engine and IEA is the driver. Our members utilize the Intalere contract program and through IEA are able to gain tier enhancements or options contracts to benefit the membership.
JHC: Your IEA Committed Savings Program promises higher savings for those who commit to a select group of contracts. Can you explain the program? Can you offer an example or two of how it has worked?
Smalley-Rader: We are putting the finishing touches on our committed program portfolio, which is averaging 17 percent additional savings to our members on contracted pricing. The program has been so successful we have made it a national program that is still being driven by the IEA leadership council. Basically, members need to participate in 70 percent of the applicable contract categories to qualify. They have to reward that contract category vendor 80 percent of their spend to qualify for that contract.
JHC: Do you have any suggestions or advice for supply chain executives wishing to start an RPC? Is there anything you believe they need to be aware of that will make them more successful?
Smalley-Rader: First and foremost, find the right partner. Make sure it is one that will allow the membership to drive the program. Without a member driven process it doesn’t succeed. Make sure the members make the participation rules and are a part of the oversight and maintenance of the program. And remember that decisions are for the groups’ best interest, not any one individual’s needs.