University Hospitals, a healthcare system in northeast Ohio, has joined up with three smaller health systems in the state to create a new purchasing collaborative to save money on supplies and improve the efficiency and effectiveness of care delivery.
University Hospitals, EMH Healthcare in Elyria, Ohio; Parma Community General Hospital in Parma, Ohio; and Southwest General in Middleburg Heights, Ohio, have launched the Purchasing Organization of the Western Reserve (POWR).
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In 2011, EMH, Parma Community General and Southwest General launched the Community Health Collaborative (CHC), a nonprofit collaborative to pool hospital resources as a way to improve the hospitals' buying power and efficiencies.
Even through working together, the CHC health systems "can't purchase large volume levels on their own," according to CHC President Frank Lordeman, in a press release.
[See also: Collaboration cuts costs]
"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."
Terry Deis, president and CEO of Parma Community General Hospital, said in a written statement, "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."
Leveraging the size and scale of University Hospitals and the Premier healthcare alliance, a national group purchasing organization located in Charlotte, N.C., the four health systems have saved $700,000 over approximately the last four months, according to Alven Weil, director of public relations and communications for Premier. The savings include $250,000 on expensive physician preference items, like artificial knees and hips or cardiovascular stents, according to a Premier press release. Additional savings were seen in pharmacy contracting and medical and surgical products.
"It's not just the community hospitals that benefit from working together," said Alan Wilde, University Hospitals vice president of System Services, in a press release. "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."
All four parties agree that other hospitals and healthcare systems in Ohio are likely to join both collaboratives.