Catholic healthcare may soon emerge as the latest battleground for the industrys heavy-hitting group purchasing organizations.
Two giant companies that negotiate billions of dollars in contracts on behalf of hospitalsCharlotte, N.C.-based Premier and Schaumburg, Ill.-based Consortaalready tout existing deals with Roman Catholic hospitals and health systems as a competitive advantage for prospective faith-based recruits. Officials with both GPOs say theyre well-positioned and eager to expand the ranks of their Catholic buyers, even as deals unveiled in recent months upended alliances between GPOs and health systems.
Consorta, which spent $5.2 billion on behalf of its largely Catholic members last year, shook healthcares group purchasing industry in January when it announced plans to become the sixth owner of HealthTrust along with five investor-owned systems. HealthTrust, Brentwood, Tenn., which is larger than Consorta, spends $8.5 billion annually, but only one-fourth of its members are not-for-profit. The deal, expected to close April 17, came nearly three months after Ascension Health, the nations largest Catholic system, exited Consorta to join rival Broadlane. Consorta President and Chief Executive Officer John Strong, who was unavailable to comment, previously said the two transactions were unrelated (Jan. 8, p. 6).
Debra Lynn Ross, Consortas spokeswoman, says the GPO plans to unveil by summer a targeted campaign to recruit Catholic hospitals and systems by highlighting reinvestment among its Catholic hospitals using returns from lower supply costs.
Meanwhile, Premier released in February the results of its Catholic Contracting Groups first year: $70 million in savings among five systems. Executives at the systems involved in Catholic Contracting Group say faith-based systems typically share a common culture that smoothed working relationships as partners negotiated contracts. Susan DeVore, Premiers chief operating officer, says the GPO is absolutely interested in expanding its Catholic and faith-based membership. DeVore says Premiers Catholic Contracting Group sees a possible partner in rival Consorta. I do think it would be a natural cultural fit and a natural mission fit, DeVore says, who added she hopes to continue prior discussions with Consorta.