Teaming up the materiel management efforts of the six member hospitals of the Jefferson Health System (JHS) has already brought about several millions of dollars in savings with even more to come.
The savings have been realized through the early and continuing collaboration of the materiel management operations of the JHS member hospitals.
"We decided early on that it was in our institutions' best interests that we work together in one coordinated materiel management initiative for the whole System, particularly in such areas as computer systems, major agreements, equipment and supplies, warehousing, storage and distribution," says William J. Wardle, Jefferson's Assistant Vice President for Materiel Management.
"We concluded we could help each other do better in our non-group contracting by blending each others' volume. We decided to go forward with a collaborative contracting effort," he adds. "To carry out these goals, we formed the JHS Materiel Management Integration Task Force."
Monthly Task Force Meetings
With Mr. Wardle as Chairman, the Integration Task Force holds monthly working meetings. Its members are: Robert C. Burkholder, Jefferson's Director of Purchasing; Ira S. Tackel, Jefferson's Director of Biomedical Instrumentation and Supply, Processing and Distribution (SPD); William Bennett, Director of Biomedical Instrumentation and Materiel Management, and Anthony Renzi, Director of Purchasing, both Methodist Hospital; John Barickman, Associate Vice President, Materiel Management, Victor Howe, Director of Procurement, and Chris Torres, Director of Operations, Main Line Health.
"Our impressive savings to date are due to the continuous teamwork of the Integration Task Force in evaluating and negotiating a number of resources and contracts. We expect the savings to grow over the months ahead," predicts Mr. Wardle.
The savings have been adding up since last summer, and particularly since August, when Jefferson Hospital joined with other JHS hospitals in agreeing to make all group purchases of equipment and supplies through one group purchasing organization, Premier.
Premier is the largest group purchasing organization in the country, representing 1,800 hospitals nationwide, or one-third of all not-for-profit hospitals.
Says Mr. Burkholder, Jefferson's purchasing director: "Handling purchases for so many hospitals means Premier gets the best prices. We estimate Jefferson's average savings on contracts thus far to be between 15 and 20 percent."
By March 24, the annualized savings to Jefferson alone were nearly $1.2 million, with the total for the entire system going over $3.3 million.
"We're reviewing contracts all the time, so the savings are sure to rise," Mr. Burkholder explains. "We're confident of seeing system-wide savings continue to grow for the remainder of 1997."
"While the biggest to date, the savings achieved by working with Premier is just one of several cost-saving initiatives our department has taken in a team approach with our peers at Main Line," explains Mr. Wardle.
One big example is the team-initiated JHS-wide collaboration on all new direct vendor contracts those not handled by Premier to leverage the system's collective purchasing power. Savings to date: $800,000.
* Facilitating the transition of Methodist Hospital into the Premier group purchasing program as of March 1. This included integrating Methodist Hospital materiel management staff into the JHS Materiel Management Task Force program.
* Negotiating single JHS vendor agreements for distribution of pharmacy and medical/surgical supplies.
* Negotiating voice mail system agreements for JHS and TJU at substantial savings. This includes maintenance agreement savings as well.
* Selecting PeopleSoft as the JHS materiel management information system. Project planning is now under way.
* Now negotiating a JHS "Energy" contract that could significantly reduce MLH annual energy costs. The contract would also provide a similar savings potential for any new JHS member.
* Developed a strategy and implementation plan to form a consolidated system-level contracting office.