Members of a Northeast alliance of health systems are forming their own group purchasing organization to better manage procurement and sourcing of supplies.
AllSpire Health Partners, an alliance of seven health systems in New Jersey, New York, Maryland and Pennsylvania, announced Wednesday that it would form AllSpire Health GPO. The GPO's members are hoping to better aggregate their purchasing volumes, streamline negotiations and find opportunities for efficiency between their networks, they said.
Initial members include Atlantic Health System, Morristown, N.J.; Hackensack University Health Network, Hackensack, N.J.; Lehigh Valley Health Network, Allentown, Pa.; Meridian Health, Neptune, N.J.; WellSpan Health, York, Pa.; and Reading (Pa.) Health System. The alliance's remaining member, Lancaster (Pa.) General Health, was not included in the announcement.
The organization has signed an exclusive deal with HealthTrust, a national GPO based in Brentwood, Tenn. Every participant in the GPO will become a member of HealthTrust. The GPO, which is majority-owned by Hospital Corporation of America, has a strict, compliance-driven model: customers are required to use the GPO's contracts for 80% of their supply spend on most types of products.
AllSpire's GPO will be governed by a board consisting of a senior executive from each member organization, and its operating committee will be comprised of supply chain leaders from each system. The GPO will be headquartered in the Lehigh Valley region of Pennsylvania and is expected to be operational in the third quarter.
“The launch of the AllSpire Health GPO is the exciting culmination of hard work by our members and signifies the strength of the AllSpire Health Partners,” said Dr. Brian Nester, chair of the network's executive committee and CEO of Lehigh Valley Health Network.
The formation of regional and niche GPOs has become an attractive strategy for health systems looking to work with area providers to find better pricing and local sourcing. Experts said last year that the acquisition of MedAssets by the Irving, Texas-based GPO now known as Vizient could open the doors to regional and provider-led GPOs looking to fill its place and offer service to smaller membership bases.
The Greater New York Health Association's GPO, affiliated with Charlotte, N.C.-based Premier, is one of the biggest regional GPOs in the country, while St. Louis-based Ascension has its own GPO, the Resource Group, and Mercy, also based in St. Louis, also has a sizable GPO in the south, known as ROi. Community Hospital Corp. partnered with HealthTrust last year to launch its own GPO focused on community hospitals, and Pittsburgh-based Highmark founded its own GPO in 2012 before acquiring what is now known as Allegheny Health Network.