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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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Arkansas Children’s Hospital Implements $1.3 Million in Annual Savings in 90 Days With Predict|Price Performance

Posted By HSCA, Friday, January 15, 2016

Arkansas Children’s Hospital, the only pediatrics medical center in Arkansas, spans nearly 30 city blocks and has 370 beds. ACH has a staff of approximately 500 physicians, 95 residents in pediatrics and pediatric specialties, and more than 4,400 employees. Its physicians are consistently named to local and national “best” and “top” doctors lists.

Arkansas Children’s Hospital set a goal of finding $250,000 in savings in one year. By using Predict|Price Performance, they found $1.3 million in annual savings in just 90 days.  Read more in the attached summary.

Tags:  Arkansas  Cost  Vizient 

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Arkansas Children’s Hospital Implements $1.3 Million in Annual Savings in 90 Days With Predict Price Performance

Posted By HSCA, Thursday, October 1, 2015
Updated: Friday, November 27, 2015

Arkansas Children’s Hospital, the only pediatrics medical center in Arkansas, spans nearly 30 city blocks and has 370 beds. ACH has a staff of approximately 500 physicians, 95 residents in pediatrics and pediatric specialties, and more than 4,400 employees. Its physicians are consistently named to local and national “best” and “top” doctors lists.

CHALLENGE

Lisa Farmer is the first to admit she’s a skeptic. To put it simply, she said her job as director of Materials Management requires it. “I listen to people all day every day tell me how great things are — that’s the nature of sales,” she said. “But I’m always questioning things. If I believed it all, we would buy everything from everybody. My job is to find the melody within the noise.”

Arkansas Children’s Hospital transitioned along with Children’s Hospital Association from a competing group purchasing organization in July 2012. At that time, Vizient, the Association’s preferred data and analytics partner, introduced Farmer to its Predict|Price Performance application — the industry-leading benchmarking solution that allows users to gain control of their supply chain, negotiate better prices and increase cash flow.

But Farmer had her doubts. ACH had not used a price benchmarking solution previously, and the recent GPO conversion hadn’t really given her team members time to get their feet on the ground with Vizient. “I wanted to do everything we could on our own and then see where the dust settled,” Farmer said.

Would hearing what her peers had to say about Price Performance and seeing some of its results in the coming months be strong enough evidence to change Farmer’s mind?

SOLUTION

Indeed it was. By May 2014, Farmer saw things very differently. “I started seeing examples of savings from other hospitals,” she said. “When I saw what some of our suppliers were negotiating with other hospitals, knowing our compliance levels were at least the same if not better, I realized then that there was something to Price Performance.”

 

The data intelligence offered by Price Performance quickly made Farmer a believer. “I can look at line-item detail and determine exactly where we fall in the grid — whether that’s in the 10th percentile, the 50th or the 75th,” she said. “And knowing where you fall tells you if there’s any room to negotiate.”

Though still early in the process, the solution already has dramatically improved the physician buy-in process at ACH, particularly with spinal implants. Farmer said, “When I met with the physician, he was blown away by the data. I have to explain to physicians that although their relationships with vendors are valued, those same relationships may be costing our hospital money.”

Previously working with Vizient's other pricing solutions made Price Performance even more valuable for ACH, Farmer added. “We had implemented everything we could within Vizient itself before we moved to this tool, so that allows us to strategically negotiate with vendors even further. Overall, we were right in the middle of the bubble graph, so we didn’t have the best pricing or the worst. Knowing where our opportunity is, I can negotiate to move us further to the left on that grid.”

Price Performance has already saved ACH enough to pay for the organization’s subscription several times over, and hospital leadership is thrilled. “Any time I can put hard dollar savings back on the table for them, it’s a great thing,” Farmer said. “Price Performance allows me to break it down by line item so that I can actually show them what we buy, how many, our old price and our new price. It’s not soft dollars — it’s real.”

Nothing beats the feeling Farmer now has when she enters vendor negotiations. “When I walked in before, I was blind. I had no idea what constituted a good price or a good percentage to go after,” she said. “In my mind, if we saved $400,000, that was a good savings. What Price Performance helped me realize was that there was $800,000 still on the table.”

Farmer called Price Performance a no-brainer if one were willing to put the effort into it. “You do have to work the tool,” she said. “It’s not a fountain where someone has tossed in coins and you just pick them up off the ground — but it’s pretty darn close!”

RESULTS

Farmer had established a Price Performance savings goal of $250,000 in the first year. However, ACH saved $1.3 million in just 90 days, including $804,000 in spinal implants and $354,000 in cochlear implants.

“We had several other savings examples of $40,000 and $50,000, and we’ve had some that were $5,000, but whether it’s a dollar or a million dollars, it’s better than what we were previously paying,” she said. “As we continue to position ourselves for health care changes, this is something we all have to do. Price Performance just allows us to do it in a much more strategic fashion.”

Tags:  Arkansas  Cost  Vizient 

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