Food product standardization savings soon to top $1 million
WNC Health Network (WNCHN) is a collaboration of hospitals and other providers supporting cost-effective, quality health services. In Asheville, NC, it began in 1995 to identify, explore and implement cost-effective, joint opportunities among its members in Western North Carolina and has evolved to include 48 hospitals and health systems representing 55 sites, 13 health departments and the Mountain AHEC. Not-for-profit WNCHN is an independent regional network that helps members meet the challenges of a changing healthcare environment through shared healthcare services, patient quality of care initiatives and group purchasing. www.wnchn.org.
Situation:
Leadership of the Western NC Health Network (WNCHN) and members of the Premier field force who work with WNCHN members realized several years ago that there were additional savings available to members if they would standardize the products they use to those available through Premier committed manufacturer agreements (CMAs). CMAs are contracts Premier negotiates with business partners based on a defined committed volume of purchases for better pricing.
Solution:
In 2004 U.S. Foodservice representatives, Premier’s sole food service distributor, began meeting with WNCHN Vice President of Member Services Tim Bugg to understand better the role of each and relationship with Premier. The result was a common strategy to drive savings by maximizing value of the Premier foodservice program. Each year since, U.S. Foodservice examines WNCHN’s aggregated purchases, looking for items to convert to Premier CMAs and targeting high volume items first. The goal: get members at least to try CMA items. U.S. Foodservice representatives work with their accounts to convert as many to CMAs as possible.
Result:
For the past five years, U.S. Foodservice has been tracking the success of standardization through conversions to Premier CMAs by WNCHN members. The results are significant – more than $700,000 in four years with the potential for another $500,000-plus in 2009.
"We look for purchases that can be converted to Premier CMA items. We target
high volume items first. We figure if it works in one hospital, all members
should at least take a look. What we want them to do is at least try CMA items.
We go to members and say, ‘This is the item you’re using; this is the CMA item.’
We show them the savings. If the item needs to be sampled, we get samples. We
get the manufacturer involved if need be. If the member agrees to move to a CMA
item, they sign an agreement form, and we document savings."
Roger Duvall, Region Manager, Healthcare and Education Sales
Charlotte Division, U.S. Foodservice
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