Case Study: MaineHealth

We helped MaineHealth source over $5 million in purchased services and realize $1 MM in savings.

Summary

MaineHealth partnered with Medpricer to analyze purchased services spend categories and to execute strategies to reduce the total costs. To date, Medpricer has helped MaineHealth source over $5 million in purchased services spend and realize over $1 million or 25% in savings. Categories have included clinical services such as custom packs and translation and interpretation services and facilities services such as EVS supply. By working with Medpricer, MaineHealth has developed a local sourcing capability that has improved their contract managers spend under management and competitive bidding cycle time while diversifying their sources of savings.

Background

MaineHealth is a $2 billion in revenue, not-for-profit family of leading high-quality providers. Ranked among the nation’s top 100 integrated healthcare delivery networks, MaineHealth member organizations include Maine Medical Center and five other acute care facilities. MaineHealth sought ways to expand the amount of spend under management for each of their contract manager, improve the cycle time for competitive bids and to diversify their savings methods and initiatives. MaineHealth’s primary GPO is VHA.

Results

A large health system with a robust internal sourcing department and a partnership with a large GPO, MaineHealth was able to achieve remarkable savings on very complex projects by using Medpricer.

MaineHealth started with a pilot for custom procedure packs where Medpricer earned a 32% savings, twice the savings the health system expected. Two other initial sourcing projects followed – translation and interpretation services and EVS supply. In total, MaineHealth realized $1 million in savings on $5 million of purchased services spend.

Commenting on how Medpricer supports his contract managers, Luis Soto, Maine’s VP of Sourcing, said:

“MedPricer has served as an additional resource and provided tools to empower and support our Contract Managers. Our Contract Managers have been trained on MedPricer platform and jointly lead negotiation with Medpricer. This has been especially helpful on savings projects that are not performed frequently by us, but Medpricer may have done several times within one year. Therefore, Medpricer can guide us on what to look out for but more importantly what questions to ask”

Mr. Soto continued highlighting cycle time improvements:

“Another great benefit is the reduced time to develop an electronic RFP and to put this out to bid. It is extremely fast compared to the traditional paper model which can take several months to complete. In contrast, using the MedPricer platform, the negotiation can take only a few hours while achieving much higher savings due to a more competitive live bidding process.”

Mr. Soto also commented on how Medpricer enabled Maine to strategically develop greater local sourcing capabilities:

“Leveraging the Medpricer process and technology is extremely important in terms of savings diversification. The typical evolution of supply chain first relies heavily on GPO contracting and then moves to add more local contracting eventually becoming heavily diversified with different business partners and initiatives to maximize and to achieve the highest level of savings.”

Medpricer’s formal process, documentation, live negotiation and side-by-side comparison analysis before, during and after the negotiation simplified the purchase of thousands of items and made it a streamlined, orderly process that exceeded savings expectations.