Having orchestrated millions of dollars in savings in the supply chain, a group of 10 hospitals in Kentucky is now turning their attention to a larger challenge: managing population health.
"This thing is going to work," said Michael Karpf, University of Kentucky executive vice president for health affairs and one of the driving forces behind the Kentucky Health Collaborative.
Years in the making, the collaborative came about as Karpf and others saw the coming reimbursement shift from traditional fee-for-service to value-based care that puts hospitals and physicians at risk for the cost and quality of care.
To get the member hospitals used to working together, they jointly decided to start with some group purchasing initiatives over the past year that would generate savings beyond the larger group purchasing organizations that the members belong to, including Premier, Karpf said.
By carving out prosthetic purchases and some medical-surgical items, the hospitals have saved about $2 million so far, with another $2 million to $3 million in savings expected this year.
The savings over time are expected to pay for the $10 million that the member hospitals have pledged to capitalize the collaborative over three years, Karpf said. But another reason for starting with purchasing was to give the collaborative's CEOs a chance to work together, he said.