Northeast Ohio Health Systems Form Collaborative to Lower Purchasing Costs, Enhance Care
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A group of Northeast Ohio-based health systems have formed a new purchasing collaborative designed to improve the efficiency and effectiveness of care delivery.
In partnership with University Hospitals, three health systems launched “” - the Purchasing Organization of the Western Reserve. Leveraging the innovation and scale of University Hospitals and the , POWR drives down the cost of supplies, including physician preference items (PPI).
Together, the four POWR health systems have saved $700,000 in approximately four months, including $250,000 on PPIs. Additional savings were realized in pharmacy contracting, and lab and med/surg products. POWR is currently working on better managing the cost of orthopedic implants and cardiology devices.
Along with University Hospitals, POWR members include:
In 2011, these three health systems formed the Community Health Collaborative (CHC) to better meet today’s healthcare challenges.
But even by joining forces, the CHC health systems “can’t purchase large volume levels on their own,” according to CHC President Frank Lordeman, a veteran executive with considerable experience in the administration of large healthcare. “However, in partnership with a larger health system such as University Hospitals, we’re able to take advantage of their scale to generate significant savings,” Lordeman said. “With additional physician preference contracts, the potential for savings by CHC systems is substantial.”
As Premier owners, the four POWR health systems benefit from the most prevalent aggregation of , which generates more than $5 billion in savings each year by uniting nearly half of the nation’s hospitals to deliver the highest quality and most cost-effective care to patients.
Terry Deis, president and CEO of Parma Community General Hospital noted, “When we announced CHC, we said the collaborative would give us new opportunities to work together as healthcare systems that are similarly sized, similarly positioned and face similar challenges. Because of our existing relationships with Premier, the supply chain was the logical place to start, and we’ve seen an immediate impact. This is just the beginning, and it’s a strong start.”
All four parties agree that other hospitals and healthcare systems in Ohio are likely to join both collaboratives.
“It’s not just the community hospitals that benefit from working together,” noted Alan Wilde, University Hospitals vice president of System Services. “University Hospitals benefits as well since aggregation often leads to better pricing for all because the additional volume drives better price points. The cooperation in purchasing also can lead to our hospitals working together more closely in the clinical arena.”
According to Premier COO Mike Alkire, “Across Ohio, Premier member hospitals and health systems are collaborating, using data and scale to identify inappropriate resource use, and compare products and evidence-based practices. Pushing through today’s reforming environment requires setting aside competitive differences when appropriate to attain mutually beneficial results for patients. POWR participants are an example of this, and they’re well along that path already.”
Premier is the nation’s largest performance improvement alliance of more than 2,800 U.S. hospitals and 93,000 other sites using the power of collaboration and technology to lead the transformation to coordinated, high-quality, cost-effective care. Owned by healthcare providers, Premier operates a leading purchasing network with more than $5 billion in annual savings. Premier also maintains clinical, financial and outcomes databases based on 1 in every 4 patient discharges. A world leader in measurably improving patient care, Premier has the largest performance improvement collaboratives in America, including one in partnership with the Centers for Medicare & Medicaid Services. Headquartered in Charlotte, N.C., Premier also has an office in Washington. . Stay connected with Premier on , and .