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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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TPC Members Realize Huge Savings in Anatomic Pathology Lab Testing Services

Posted By HSCA, Tuesday, November 28, 2017

To meet the challenges of today’s healthcare system, lab executives and administrators are rethinking their business strategies. As the era of fee-for-service from government and private payers is replaced by value-based reimbursement, how will clinical laboratories and pathology groups be paid? As integrated care organizations, such as ACOs and medical homes, enter the healthcare market, which lab testing services will deliver the most value to these new users? And will payers issue coverage guidelines and set adequate prices for the flood of new molecular assays and gene tests coming to market? These complexities have already driven a handful of medical laboratories and pathology practices to bankruptcy, sale, or closure. Innovative lab business and service models, such as those at TPC, are emerging to address these concerns.

At TPC, our Anatomic Pathology (AP) Reference Lab Services address testing that includes Flow, Fish, IHC, Genetic, Histo, Cyto, and Consult, as well as many others. Our unique collaborative model allows us to deliver compelling financial and non-financial results to our Members that they could not achieve on their own. 

The AP lab initiative began in late 2014, led by TPC’s Lab Clinical Value Analysis Team (CVAT). The team consisted of lab directors from each Member facility, in coordination with Member pathologists and the TPC Supply Chain Council. 

When the process began, the membership’s contracts were spread across ten different suppliers. Together, TPC Members recognized an opportunity to standardize their AP reference testing needs. As this area of testing is extremely clinical and vitally important, TPC Members felt it necessary to dual source this category. Nevertheless, the opportunity to standardize to just two suppliers would achieve huge savings for all TPC Members, while still providing them the flexibility of choice in their primary and secondary sources. TPC assembled pathologists from each Member to review and evaluate the suppliers that would participate in the Request for Proposal (RFP) – taking into consideration each supplier’s test menu and service capabilities.

At the end of the review process, two suppliers were selected, and the results were impressive. The category spend for nine TPC Member organizations was over $3 million. By leveraging their combined purchasing power, these Members realized an immediate savings of $529,000, with the potential for more savings in the future. In addition to the financial benefit, the program also afforded a turnaround guarantee with penalty, third party billing, firm pricing for the term of the agreement, web portal tool and services, and educational training.

Through our unique collaborative model, TPC is able to achieve results that our Members could not achieve on their own.  We maintain strong partnerships to manage expenditures and focus on building innovative solutions to improve healthcare purchasing, ultimately driving down the cost of healthcare for patients. TPC provides the framework for independent, community-based hospitals to achieve system value through standardization, utilization, and pricing strategies that optimize operational, financial, and clinical performance.

Stronger Together. Superior Results.

Tags:  Cost  Savings  TPC 

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Great Results

Posted By HSCA, Wednesday, March 29, 2017

TPC helps hospitals achieve significant economies of scale by collaborating as a single contracting entity.

By Alan Dorich

It has been said that culture trumps strategy, and it is TPC’s culture of innovation and commitment that enables its hospital members to endure the highs and lows of the increasingly volatile healthcare market, President and CEO Geoff Brenner says. “Culturally, we have developed into a very fluid and adaptable organization that consistently achieves market-leading results amid unprecedented industry disruption,” he says.

Based in Plano, Texas, TPC is a hospital-owned coalition that focuses on innovative cost-reduction strategies within supply chain, purchased services and clinical product utilization. Its history goes back to 2007 when several large health systems conducted a study to measure the true value of consolidation.

“The results of the study revealed that as much as 80 percent of the anticipated financial value generated by hospital consolidation could potentially be achieved by collaborating as a single, committed contracting entity and if successful, it would diminish the need to merge assets,” Brenner explains, noting that the group ultimately chose not to merge assets but rather to form a highly-committed partnership by creating TPC.

Today, TPC consists of 11 healthcare systems located in three states, and has achieved more than $180 million in documented savings since 2010. “By working together as a single contracting entity, TPC hospitals have developed the collective market footprint of a very large integrated delivery network, with a very high commitment level,” Brenner says. “They collaborate as one system to achieve the economies of scale they need to remain financially strong to serve their local markets.”

Two specific areas where TPC has achieved industry-leading financial results are within difficult clinical product categories and purchased services. “On average, TPC members have documented a 20 percent reduction in their supply costs,” Brenner says.

Tough Enough

Brenner has been in the healthcare industry since 1995 and originally served as the president of TPC’s parent company. He credits TPC’s success to the hospitals’ unwavering commitment to each other and the sophisticated self-governance model that has evolved over the years.

“They collaborate as one system,” he says, noting that this enables the company to strategically focus on savings opportunities that are the most difficult to achieve, but offer the highest financial return.

“Oftentimes healthcare supply coalitions set lofty goals to pursue the tougher, higher-yield product or service categories, but those ambitions often fail to materialize because the governance structure was not engineered to deal with inter-hospital conflict, difficult tradeoffs and the binding commitment that is required,” Brenner explains. “TPC’s board, executive steering committee, supply chain leaders and physician/clinical leaders have consistently demonstrated the courage to tackle the most challenging scenarios because they recognize their collective ability to optimize their supply chain has a direct correlation to their financial health, and their ability to provide safe, cost-effective care to their local communities.”

The Best Model

 TPC hospitals routinely evaluate the value propositions offered by their suppliers, Brenner says. “Within the hospital sector, the focus on costs and value are unrelenting,” he states. “Every decision maker is under immense pressure to make prudent, sustainable choices.”

Oftentimes this effort requires physicians to evaluate supplies and vendors they have used for many years. This prospect can be very difficult, since the physicians may have developed strong preferences for the products they use on a regular basis and strong alliances with the supplier representatives. “Navigating those scenarios is one of the greatest challenges,” he admits.

But TPC addresses this challenge by providing the physicians with clinical and financial data that reveals, often for the first time, clinical utilization patterns, clinical outcomes (quality), product costs and ultimately, value. Physicians are highly educated, intelligent, ethical and data-driven; when presented with concise, well-vetted data, they prudently evaluate the variables and propose one or more viable alternatives. That is the power of strong member-led governance.

“Alternatively, if TPC approached the physicians with a preformed agenda that required them to convert from Supplier A to Supplier B, they would justifiably resist the change,” Brenner says. “But as they collaborate as peers and their confidence in the data and the process builds, they identify options to improve the cost metrics without sacrificing clinical quality or patient care.”

Committed to Change

Brenner is proud of the culture at TPC. “There’s a relentless commitment to innovate and evolve,” he says, noting that it requires employees to become increasingly more “comfortable with unprecedented ambiguity.”

Although the work itself can be very challenging, “We have learned to confront each obstacle as a team, and in that approach we have developed a love for what we do, with whom we do it, and for the healthcare organizations for which we do it,” he says. “The real credit belongs to the TPC hospitals; they have been setting the bar day in and day out since 2007.”

TPC’s plan is to stay aggressive when it comes to serving its hospital members and innovating cost reduction strategies within supply chain, purchased services, and even revenue cycle (a new strategic focus area). “Together, we’ve created significant momentum, economies of scale and tangible value.” Brenner explains. “As we move forward, TPC may be required to expand beyond contracting and explore process-related opportunities. The worst thing we can do is look at the results we’ve had and think that trajectory continues upward without continually, and often radically, rethinking our business.”

Tags:  Cost  Texas  TPC 

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