Highmark supply chain deemed a success
Less than a year since its start, Highmark Inc.'s supply chain partnership is saving member hospitals money by allowing them to pull together and buy in bulk.
“We absolutely are saving money, and it's significant,” said Bill O'Connor, senior vice president at Provider Supply Chain Partners, a Highmark company.
On average, member hospitals will save 4 percent to 31 percent on total nonlabor spending annually, Highmark projects.
Highmark's goal is to provide affordable health care, O'Connor said, and to do that, it needs to make sure expenses are kept in check.
The company leverages its buying power, O'Connor said.
For example, he said, a person buying groceries for one household would pay a certain price, but somebody buying groceries for 20 households can buy a truckload and negotiate prices.
In this case, medical apparatus goes into a collective shopping cart — items such as replacement hips or knees, pacemakers, crutches, bandages and pharmaceutical drugs.
Since its beginning in April, 11 hospitals have joined the buying agreement, including five in the West Penn Allegheny System, five in the West Virginia United System and St. Vincent Health System in Erie.
Highmark is targeting facilities in Pennsylvania, West Virginia and Delaware.
Though other supply chain service organizations exist, O'Connor said, Highmark's took a different approach by working with doctors.
“We are taking it a step further,” he said. “When it comes to medical devices, we're really trying to work with the physicians. We have advisory boards that we use to communicate and educate and get them to help us make good quality decisions.
“It enables us to work with the supplier community and ... make much stronger and aggressive commitments.”
Al Mansfield, chief financial officer at St. Vincent Health System, underscored the doctors' influence in guiding purchases.
“Together with physicians, Provider can evaluate from a clinician's point of view the clinical merits of competing products,” Mansfield said.
Already, he said, the hospital has realized a cost savings, which he said will become more significant over time.
Rossilynne Skena is a staff writer for Trib Total Media. She can be reached at 724-836-6646 or email@example.com.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Dominion Resources CEO Farrell made $17.3M in 2014
- Nonprofit Concordia Lutheran Ministries adjusts to marketplace realities
- Stocks gain on encouraging signs in spending and home sales
- Farmers fund research on gluten-free wheat
- GNC will expand its testing of supplements in settlement with NY
- Consumer spending inches up in February as income soars
- Pittsburgh region’s unemployment rate stays steady
- Naturi startup of Pittsburgh created out of desire for better yogurt
- Increased credit card use reflects confidence, flat wages