Case Study: Hennepin County Medical Center

Transcription services resulted in 30% savings, and the process led to a 67% reduction in sourcing cycle time.

Summary

In partnership with Medpricer, Hennepin County Medical Center has achieved high percentage savings – including 30% on one project – and evolved their in-house sourcing team to do more great work faster. The partnership with Medpricer is an opportunity for HCMC to continue to grow their in-house sourcing by learning through an experienced partner and bring even more value to the organization.

Background

Hennepin County Medical Center (HCMC): Is a 472 bed county-owned health system based in Minneapolis with approximately $50 million in purchased services spend – an amount higher than HCMC’s estimated non-purchased services spend. VHA is Hennepin’s primary GPO.

When Hennepin County Medical Center (HCMC) shifted its purchasing from a county-run group to one in-house, the in-house team began working immediately to incorporate the business goals of the medical center into the purchasing process.

HCMC initially worked with Medpricer to achieve three sourcing objectives: 1) identify and realize cost-savings 2) engage stakeholders in sourcing projects to increase value and service levels 3) implement a transparent and competitive negotiation process.

“We want to provide value to the organization,” said Luis Valadez, HCMC’s Director of Supply Chain Management.

Mr. Valadez initially used Medpricer to increase sourcing capacity to achieve savings targets without sacrificing stakeholder value or compromising the process. He also saw an opportunity for Medpricer to help them evolve their internal sourcing team skills by bringing in and transferring category expertise.

The need arose quickly for additional expertise in healthcare sourcing, and the young purchasing team looked to Medpricer’s experience and expertise to help evolve their own sourcing know-how and get results equal to those of much larger health systems.

“We are able to demonstrate value to the organization because of the value we get from Medpricer,” said Valadez. “Medpricer is able to provide us with benchmarking analytics to show us how we compare. We are able to use best practices to get the best value and quality,” he said.

Results

The first project for transcription services resulted in 30% savings, and the process led to a 67% reduction in sourcing cycle time and less time-consuming administrative work for the team, freeing them to do more contract management and implementation. And the team is gaining skills they can use in the future.

“Medpricer helped us to do a lot of great work fast. The volume is more than we’ve ever done before,” said HCMC Portfolio Manager Lisa Ackerman. “My team gets great ideas on how to do our RFP projects better.”

Medpricer started with a pilot sourcing project – Transcription Services – where Medpricer helped HCMC:

  • Complete the Sourcing process 67% faster
  • Identify savings of 30% than the current cost for comparable services
  • Award to a new vendor with a superior software and vastly improved service levels compared to incumbent at 24% savings with the majority of transition and implementation costs included

After the pilot, Medpricer has continued to help HCMC’s team drive higher sourcing project volume more rapidly with high savings. In the first eight months of partnership, Medpricer has helped HCMC complete five projects with a combined average savings of 30% including:

  • Electronic Eligibility Software
  • Reference Lab Testing Services
  • Managed Print Services
  • Interpretation Services

Other projects planned and on-going include:

  • Linen Service
  • Cleaning Services
  • HVAC Repair Services
  • Collection Services
  • Waste Management
  • Landscaping Services

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