Our Capital Purchase Success Stories In Hospitals

“East Coast Health System”

Summary:

For the past eight years, Johns Hopkins has partnered with Medpricer to source more than $444 million in spend across 106 projects saving over $82 million in Purchased Services, medical-supplies, commodities, capital and construction and physician preference items. In Purchased Services alone, Johns Hopkins has processed $94 million in spend saving $13.3 million across 14 projects. Not only has Medpricer delivered necessary cost savings for the Hopkins organization, but has also supported efforts to standardize suppliers, where appropriate, resulting in substantial value for JHHS beyond savings alone.

Johns Hopkins was able to do more with less and find significant savings by using Medpricer to augment its staff and source more categories than ever before. Johns Hopkins relied on Medpricer’s category expertise to effectively communicate the needs of their stakeholders, ensuring necessary service levels at the best value. Medpricer’s moderated real-time e-negotiation platform enabled them to find savings from their preferred suppliers not available in other ways. By supporting all of the heavy lifting in a sourcing engagement, Medpricer was able to free up the Johns Hopkins’ Supply Chain team so that they could focus on other important areas such as category and contract management, maintaining vendor relationships, and supporting stakeholders in day-to-day operations.

Background:

Johns Hopkins Health System (JHHS) is a $7.7 billion integrated global health enterprise and has been ranked number one in the nation by U.S. News & World Report for 22 years of the survey’s 26-year history. Johns Hopkins Medicine operates six academic and community hospitals with 2,798 patient beds, four suburban health care and surgery centers, and has more than 2.8 million outpatient encounters per year. Premier is Johns Hopkins primary GPO.

Johns Hopkins had the following challenges:

  • Speed & Efficiencies: Reduce sourcing project cycle-time by reducing administrative tasks such as multiple in-person and e-mail communications.
  • Staff Augmentation: Conduct more competitive bids with their limited staff and higher savings targets.
  • Expertise: Gain expertise in infrequently sourced categories which their limited size sourcing team did not have in-house.
  • New Facility Sourcing: Source capital equipment required for a 550 bed critical care and children’s tower on top of their existing workload.

Results:

Medpricer began with a Purchased Services pilot project for specialty bed rental services. Johns Hopkins saved an unexpected $560,000 through the project.

Beyond the savings, Johns Hopkins maintained complete control and had the freedom to manage contracts and implement new contracts while Medpricer did the most difficult and time-consuming tasks of sourcing.

“We all felt very supported and secure that the patients’ best interests were at heart in a complicated and expensive contract,” said stakeholder Amanda Owen, a wound care nurse in the JHHS Department of Medicine, after a bid. “Within two hours, the whole thing was done.”

Johns Hopkins found Medpricer’s technology eliminated the long, drawn-out process of paper-based negotiations and accelerated the process significantly by conducting a live, moderated negotiation where stakeholders and supply chain could participate and work directly with vendors in real-time to obtain the best value. Medpricer’s unique negotiation process generates a level of competition that isn’t typically found through traditional negotiation methods. This process drives cost down while simultaneously ensuring stakeholder’s unique needs are met while improving the existing service levels for each facility.

After the initial bid bid, Medpricer has continued since 2008 to support Johns Hopkins across the full-spectrum of categories including projects totaling the following in total contractual spend:

  1. Purchased Services – $94 million
  2. Medical supplies – $94 million
  3. Physician Preference Items – $92 million
  4. Capital Equipment – $79 million
  5. Commodities – $41 million

A special project not included in above amounts is where Medpricer provided new facility construction eSourcing and the process to source all of the capital equipment that went into the new John’s Hopkins’s 550 bed critical care and children’s tower. Medpricer processed $43.5 million of the capital equipment with estimated savings of $12.9 million or 30% savings.

All told, since 2008 Medpricer has supported Johns Hopkins in 106 projects saving them over $82 million.

Outcome:

Since 2008, Medpricer has partnered with Johns Hopkins to help them source more than $444 million in spend across 106 projects saving over $82 million through Medpricer’s unique blend of services, technology and market intelligence.

Johns Hopkins was able to do more with less and find significant savings by using Medpricer technology and services to augment its staff and source more categories than ever before. Johns Hopkins found savings from their preferred suppliers not available previously by using Medpricer’s moderated real-time e-negotiation platform.

By supporting all of the heavy lifting in their sourcing projects, Medpricer freed up the Hopkins’ Supply Chain team to focus on category and contract management, vendor relationships, and stakeholder support.

Children’s of Alabama

Challenges:

  • Complexity of acquiring 1,300 unique products with at least 3 suppliers per product for a $500 million, 12 story new facility.
  • Extreme number of bids and terms for sourcing organization to compare and make awards.
  • Emphasize the use of local suppliers in the award process

Solution:

  • Defined detailed equipment specifications and documentation.
  • Provided cloud RFP management and real-time negotiation platform to discover the best combination of stakeholder requirements, terms and price.
  • Provided award analytics and decision support.

Results:

  • Processed 1,300 unique products with at least 3 supplier bids per product.
  • Created and managed 23 unique RFPs.
  • Gained 29% savings across $16.7 million of budgeted capital spend.
  • Awarded local suppliers a large share of business.

Crystal Run

Crystal run is one of the fastest growing multi-specialty group practices in US serving patients in the Hudson Valley and lower Catskills area.

Challenges:

  • Capital furniture purchase of 118 distinct types for 66,000 square foot, two-story new building.
  • Tight deadlines dictated by accelerated new construction completion date or risk delay of entire project.
  • Find extra capacity in material management team to equip and furnish new building.

Solution:

  • Leveraged Medpricer’s Intalere Contract
  • Medpricer delivered full service creation, administration of RFPs and live, electronic negotiation.

Results:

  • Met accelerated schedule.
  • Selected vendor was 10% lower in cost than next vendor option.

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“We purposely kept the purchasing for the new facility out of the purchasing department so we wouldn’t impact their workload. MedPricer was a good solution because they have the expertise to locate the right suppliers for the equipment needed, and it doesn’t impose any financial strain on the institution.

We would have had to send out hundreds of RFPs, which would have been overwhelming. The time savings alone were tremendous. In days instead of weeks, MedPricer shows you the low and preferred supplier’s bids and makes it easy to compare them side by side, with just a few pieces of paper.”

Charles Payne, Sr. Former Director of Materials Management for Alabama Children’s Hospital