KY hospital decreases supply costs $1.7M by switching to Premier alliance
King’s Daughters Medical Center is a not-for-profit, 385-bed acute care facility that serves eastern Kentucky, southern Ohio and western West Virginia. It offers comprehensive cardiac, medical, surgical, pediatric, rehabilitative, psychiatric, cancer, neurological, pain care, wound care and home care services in one location. It includes a network of 13 family care centers and a new outpatient imaging center. The hospital holds a five-star cardiac ranking by Health Grades; has been named one of the nation’s 100 Top Hospitals® by Solucient® for three consecutive years; and was named one of Fortune 100’s “Best Companies to Work For” in 2008 and 2009.
Situation:
After more than 20 years with the same GPO, leaders at the King’s Daughters Medical Center (KDMC) decided it was time to evaluate other GPO options to compare prices and effectiveness as well as consider alternatives to improve supply chain performance.
Solution:
KDMC evaluated companies on four major factors (market basket pricing, rebates, EDI platforms, and food programs) and chose Premier, taking advantage of the group buy program as well as Supply Chain Advisor, Premier’s online automated contract management system.
Result:
In the first year KDMC saved $1.7 million dollars. Even with significant increases in patient volume, the supply expense as a percent of total patient revenue decreased over the budgeted amount as well as over the prior year by more than one percent. Similarly, costs calculated by supply expenses per adjusted admission showed a decrease in cost over the prior year.
"Implementation was as smooth as it could be. Many of the Premier
contracts were the same vendors as our old GPO, but with better pricing for the
same products."
Ron Henson
Director of Materials Management King’s Daughters Medical Center