(Story updated at 7:37 p.m. ET)
Four major health systems have partnered with two environmental organizations to launch a purchasing cooperative focused on “green” products that could compete with traditional group purchasing organizations.
Dartmouth-Hitchcock, Dignity Health, Gundersen Health System and Partners HealthCare want supplies and services that are environmentally friendly, so they've teamed up with Health Care Without Harm and Practice Greenhealth to launch a sustainable marketplace. The for-profit Greenhealth Exchange will offer an online catalog backed by a network of suppliers.
The venture brings together providers that boast a combined total of over $4 billion in purchasing power, 60 hospitals and $21.2 billion in annual revenue.
Executives declined to disclose contracted suppliers, but said they've pegged food service, furnishing and office supplies for their catalog, which launches in the next six months. The group is expected to eventually move into healthcare-focused products and will collaborate with suppliers in developing new, sustainable products.
Most GPOs have “green” contract portfolios. But leaders of the exchange maintained during a conference call Tuesday that those products and services aren't always competitively priced and are hard to find among millions of other nonsustainable items.
Greenhealth Exchange President John Strong said Greenhealth Exchange customers will benefit from sustainability research and products that meet certain metrics and provider requirements. He noted that a “green-only” marketplace should also help to drive competition in price among sustainable suppliers.
“GPOs have contracted for a number of green products, but they've also left (nonsustainable) products on contract. Sometimes the pricing of those green products isn't competitive as a result,” Strong said.
Most GPOs were not immediately available for comment. Irving, Texas-based Vizient is a sponsor of the CleanMed conference that began Tuesday in Dallas, and the GPO is “a strong advocate for environmentally preferred purchasing and increasing sustainability practices in healthcare,” said spokeswoman Angie Boliver, in a statement.
Vizient offers more than 35,000 “green” products" or items that contain at least one of the attributes deemed important to all GPOs collaborating with Practice GreenHealth, she said.
Boliver noted that Dartmouth-Hitchcock and Partners HealthCare both participate in Vizient's environmental advisory group made up of 15 member health systems.
Premier spokeswoman Morgan Guthrie said in a statement that the Charlotte, N.C.-based GPO is “committed to environmentally preferable purchasing." Premier has been previously recognized by Practice Greenhealth for environmental stewardship, Guthrie said, adding that the company offers over 230 environmentally-friendly contracts, including in energy procurement and analytics.
Greenhealth Exchange leaders noted that, for many hospitals, the cooperative's offerings will augment their current GPO contracts. For example, many GPOs don't readily offer contracts for green building materials, for which there is an increasing demand, said John Messervy, corporate director of design and construction at Partners HealthCare.
Health systems that want to purchase through Greenhealth Exchange will pay a fee and manufacturers and distributors will pay a fee for any sales done through Greenhealth Exchange. Systems own a membership share of the company after paying their dues, and the organization expects to add additional revenue streams related to information technology in the future.
“We still struggle to find the information that's organized, thoughtful and consistent on products,” said Dr. Jeff Thompson, CEO emeritus of Gundersen Health System. “If every vendor has their idea of what's green, you have to sort through that … the people that are interested in being reliable in their environmental purchases but don't have the infrastructure will be helped immensely.”
Kaiser Permanente, a competitor of Dignity Health and an industry leader among large systems when it comes to sustainable practices, provided some funds to Practice Greenhealth to explore the idea of the exchange, according to a system spokeswoman. The Oakland, Calif.-based system is evaluating participation in the co-op, but not participating at this time, she said.
Kathy Gerwig, the system's environmental stewardship officer, in a statement said that the system's suppliers suggest ways to reduce toxic chemicals, use less packaging and use more materials that can be safely reprocessed.
"Innovation gets rewarded as we embed environmental criteria into our product-selection decisions," she said.