Hospitals Save $120 Million Using Data-Driven Purchasing Strategies to Drive Costs Down

Source: Healthcare IT News

Hospitals participating in the Premier healthcare alliance's ASCEND supply chain program have identified more than $120 million in savings over the past in three years.

As a provider-owned performance improvement alliance of more than 2,700 U.S. hospitals and 90,000 other sites, Premier operates a leading healthcare purchasing network with more than $4 billion in annual savings and close to $43 billion in annual purchasing data.

Premier’s 321 ASCEND (Accelerated Supply Chain Endeavor) members, which represent more than $7 billion in supply chain purchasing volume and more than 54,000 hospital beds, identify savings by aggregating, monitoring and analyzing supply chain data. Doing so helps them act on performance improvement opportunities that support care quality such as simplified and consistent purchasing practices, efficient clinical utilization and specially negotiated contracts.

When compared to a national sample of non-participants, ASCEND hospitals see decreases in their supply expenses by 8.7 percent more per CMI-adjusted discharge and 6.5 percent more in total operating cost. Of note, TriHealth Inc. has saved nearly $5 million.

"These hospitals are integrating data and enhancing communications among their departments to drive high-value care through the growing scale of ASCEND’s membership,” said Premier President of supply chain services Durral Gilbert. “The volume-driven practices and knowledge sharing activities create a cost-effective purchasing environment so that they can focus on delivering excellent care.”

ASCEND members have seen significant savings in clinical, non-clinical, capital and purchased services products and services. Overall, 25 percent of members have identified more than $1 million each in savings opportunities.

Additionally, more than $15 million in member savings has been identified for physician preference items, which account for 14 percent of ASCEND contracts. These savings include $4 million in drug-eluting coronary stents and more than $1 million in surgical mesh and DIR products. Overall, members benefit from 145 suppliers and 237 contracts.

Members also practice proper utilization and standardization through climbing session events focusing on timely and relevant contracting issues. During these sessions, hospitals share best practices to benefit the collaborative. To date, 31 climbing sessions have taken place on topics such as sterilization versus reprocessing, medical nutrition and radiopharmaceuticals.

After reviewing all eligible suppliers in a particular category, the ASCEND hospitals agree to standardize to one Premier-contracted supplier in that category. This decision is based on the supplier's ability to meet the general and clinical product specifications set forth by ASCEND members, as well as overall pricing.

Premier's data apps are used to identify opportunities that can reduce overall supply expenses. These apps include SupplyFocus, the industry's largest comparative database of supply chain cost information for acute care hospitals. All of Premier’s quality, safety, labor and supply chain apps are accessible in PremierConnect, an integrated platform with the world’s largest virtual healthcare community.

About the Premier healthcare alliance, Malcolm Baldrige National Quality Award recipient

Premier is a performance improvement alliance of more than 2,700 U.S. hospitals and 90,000 other sites using the power of collaboration and technology to lead the transformation to coordinated, high-quality, cost-effective care. Owned by hospitals, health systems and other providers, Premier operates a leading healthcare purchasing network with more than $4 billion in annual savings. Premier also maintains the nation's largest clinical, financial and outcomes database with information on 1 in 4 patient discharges. A world leader in delivering measurable improvements in care, Premier works with the Centers for Medicare & Medicaid Services. Headquartered in Charlotte, N.C., Premier also has an office in Washington. https://www.premierinc.com. Stay connected on Facebook, Twitter and YouTube.