SPRINGFIELD, PA – Hospitals are continuing to look for ways to improve supply purchasing, and they’re beginning to rely more heavily on analytic services provided by group purchasing organizations.
As one example, Crozer-Keystone Health System in Springfield, Pa. recently identified about $140,000 in potential savings over a year after global spending analytics studies were conducted.
The studies, accessed through VHA Inc., an Irving, Texas-based group purchasing organization, represent a value-added service typical of those GPOs are offering to assist member hospitals and gain a competitive advantage in the hotly competitive purchasing market.
More hospitals are expected to take a closer look at supply purchasing, which often trails only labor as the biggest cost category.
Results of the analysis, using VHA’s Global Spend Analysis Tool, helped Crozer-Keystone realize where it could achieve more savings in supplies, said Anita Keenan, the system’s director of purchasing.
“VHA’s Global Spend Analysis solutions have helped me get my arms around what we have accomplished as a department, and where we may have additional cost savings opportunities,” she said.
The analysis pointed out where the five-hospital system had achieved compliance in supply ordering and noted potential gaps, she said. It also showed the impact that purchasing volume could have on savings, she added.
“We found that we weren’t always appropriately priced or pointed out that the business within a contract had evolved over time,” she said.
In some instances, the tool found purchasing areas for which VHA didn’t have letters of participation from Crozer-Keystone, thus affecting the system’s ability to report its purchasing volume and limiting potential savings.
Finally, the analysis identified future opportunities for savings, Keenan said.
The effort helped improve purchasing operations in the system by highlighting the savings impact that purchasing could have, she said. “There is a heightened awareness of the staff as they complete their day-to-day processing of contracts,” she added.
Crozer-Keystone developed a validation scorecard to assist officials during the 90 days that they worked with the VHA analytics tool. The scorecard now is being offered to other VHA member hospitals using the purchasing assessment tool. The system will conduct another assessment next year, Keenan said.
“As cost pressures continue to rise, hospitals need to continue looking for ways to accelerate their financial and clinical performance,” says Scott Downing, group senior vice president for supply chain solutions at VHA. “That’s why incorporating analytics into healthcare is so important – it combines essential data elements, analytical expertise and the latest technologies to provide insight into a hospital’s supply operations, allowing purchasing executives to use information to quickly focus on the most important issues.”
Data capture and analysis capabilities have improved, said Dan DeLay, who leads VHA’s analytics division.
“Just a few years ago, the ability to collect the type of data we’re talking about didn’t exist,” he said. “This is a new capability in the supply chain in healthcare that has existed in other industries for a few years. It’s difficult for individual hospitals to do this, but it’s a perfect space for VHA because we can do this on the part of our members.”