In recent years, supply-chain executives have pushed for more product standardization and, in some cases, less reliance on their traditional group purchasing partners.
Ascension Health, Highmark and Dignity Health are three organizations that have moved forward with initiatives to launch their own GPOs. Dignity is also involved in a new venture with UnitedHealthcare to address the costs of physician preference items.
However, internal cost-cutting programs at hospitals remain a top priority.
Steve Kehrberg, senior vice president of supply chain for Catholic Health Initiatives, says a systemwide initiative to address costs and improve operations has led to cost reductions across a number of supply sectors, including food service and pharmacy.
Like other large health systems that have identified for-profit business ventures that will allow them to sell their supply-chain expertise and develop a new revenue stream, the Englewood, Colo.-based system plans to start marketing its clinical-engineering support services to other organizations.
Kehrberg projects $82.4 million in supply-chain savings for the three years beginning in 2013. The target takes into account both reduced costs and increased revenue.
“We think this is the key to our success going forward under healthcare reform,” he says.
Pressure on supply costs will continue to extend to medical-device companies, especially those that manufacture the commodity medical products and supplies that are under the most financial scrutiny, says Megan Neuburger, a senior director with Fitch Ratings.