Upload
emmeline-lawson
View
217
Download
0
Tags:
Embed Size (px)
Citation preview
HomeTown Health
Group Purchasing Organization
OverviewApril 29, 2010
1
About HealthTrust
• We are a Group Purchasing Organization (GPO) Established in 1999 Offering contracts in the areas of supplies, pharmaceuticals,
medical devices, capital equipment, HR and other service-related offerings
• Membership includes over 1,400 acute care hospitals and 440 surgery centers
• 99% member retention rate
• “Patients first” mission. All contract decisions are approved by the appropriate clinical advisory board
• We leverage our members’ $17 billion of annualized compliant purchasing volume to negotiate the lowest pricing in the industry
2
Annual Sales Volume
2004 2005 2006 2007 2008 2009$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
$18.0
$6.5 $7.6
$8.5 $9.8
$14.1
$17.0
3
Equity IDNs
Unique Combination of Members
For-Profit Non-ProfitAlternate
Sites
4
GPO A
GPO B
GPO C
GPO D
GPO E
GPO F
0%
5%
10%
15%
20%
25%
30%
6.9%
9.7%10.5% 10.7%
15.0%
25.6%
5
Key differentiator: Industry-leading Pricing
We have grown from $4 billion to $17 billion in 10 years. Why?
• Lowest Pricing in the Industry— as measured by our customers
• Over the past 18 months of due diligence, the average price savings for our customers versus other GPOs has averaged 7%
• One Price For All — with market-share tiers and SIPs
• Sustainable Model — driven by a “patients first” mission, an aligned membership, and executed with a provider-centered perspective
Internal Due Diligence Prior 18 months
Consorta Transaction
• Consorta joined HPG as equity partner in 2007– 11 not for profit companies with 186 acute care
hospitals and hundreds of alternate sites and clinics
• Renegotiated or “refreshed” the contract portfolio over a year and a half to:– Create incremental price savings due to
additional committed volume.– Shrink contracting cycle
• Results:• Over $9 Billion spend was “refreshed”• 4.22% savings ($390 Million to existing
members)
6
Compliance
• Compliance = Savings• Compliance Measurement
– 80% of total facility supply spend should go through HT (if covered under HT contract)
– Not contract specific although some contracts have % requirements to achieve tiers
• Exclusive GPO – can not belong to other GPO
• Contract Status – Sole, Dual, Multi, Optional
7
Key Differentiator: Rigorous Clinical Review
HealthTrust’s “Patients First” philosophy drives all contractual decisions and clinical programs
• Goal “Patients First” mission Evaluate and determine suppliers / products that meet only the
highest clinical standards in every category
• Clinical Advisory Board — Form and Function Nine standing advisory boards – led by licensed clinicians Ad-hoc boards and member summits Average 15 members / three-year rotating terms Refresh approximately 250 categories per year
Nursing Food & Nutrition
Laboratory Radiology Pharmacy
Information
SystemsSupply Chain Surgery Cardiolog
y
8
Key Differentiator: Rigorous Clinical Review
• Clinical Review Process Facility-level clinical evaluation Solicit input across membership Follow standardized processes, e.g. scoring matrices Utilize outside reference sources (ECRI, SG2, AORN, AAMI) to
compliment new technology assessments• New Technology Assessment and Information• Clinical Education and Implementation Support• Environmental Sustainability Program
Nursing Food & Nutrition
Laboratory Radiology Pharmacy
Information
SystemsSupply Chain Surgery Cardiolog
y
9
Key Differentiator: Broadest Contract Coverage
• Comprehensive portfolio Medical/Surgical, Commodities and Distribution – Sole
agreements or dual/multi-source with standardization incentives (SIPs), where possible
Capital Equipment – Everyday best-pricing with Group Buy opportunities
Pharmacy – Portfolio includes branded contracts with progressive therapeutic initiatives and sole-source generic awards
Food – Pool Healthtrust volume with Sodexho (Entegra) to further enhance pricing and rebates
Non-Clinical – Coverage for all provider spend, e.g. I.T., HR benefits, energy, parcel, office supplies, etc.
• Medical Device Sourcing Solutions National agreements for cardiovascular – customized for members Provide strategic sourcing for all orthopedic categories Process steps include: data capture, spend utilization,
reimbursement evaluation, benchmarking, strategy development, physician engagement and contracting
10
Key Differentiator: Operations Expertise
• Account Management – supporting daily operations Managers are experienced supply chain and clinical
professionals Responsible for overall relationship, support of
implementation, contract conversions, compliance and savings opportunities
Quarterly business reviews Customer Service call center – Issues are logged, tracked
for resolution and trended for root cause analysis and vendor accountability
11
Integrity & Culture
• Unsurpassed Ethics and Compliance Admin fees do not exceed 3% allowable by OIG Safe Harbor
Guidelines No private label programs No financial investments or ventures with suppliers Officers have no stock or options in any supplier
• Healthcare Group Purchasing Industry Initiative (HIGPII) Founding member Established to promote and monitor best ethical and
business practices Requirements:
• Open and competitive purchasing process• Maintain written business code of conduct• Public accountability
• Commitment to supplier diversity and small companies
12
System Tools & Resources
Member Web site – (SCRUBS)• News & key resources• HT University – Continuing
EducationOnline Catalog – (CatScan)• Line item pricing at individualized
facility level (your Tier)• Customized Distributor Markup • Contract or Item Export
Capability• Normalized Product Descriptions• UNSPSC Codes
13
Electronic Letters of Commitment (CCM)
• Electronic exchange directly between the facility and vendors
• Multiple workflow options• E-mail notifications of activity
13
Rebates
• All rebates are paid to HPG. They are processed and sent to facilities monthly
• 100% are returned to facilities (must be reflected in cost reports)
• Extensive projection and tracking system• Monthly and YTD detail reports including
contract and associated sales are available on-line
• HPG has more rebates then other GPOs, keep this in mind during conversions. Approx 19% of contracts have rebates
14
Audit
• 5 areas of focus - pricing, rebates, membership, freight, admin fees.
• Yearly plan based on risk factors – complexity of contract, highest spend, prior audit results, management requests, CS calls, years since last audit
• 2009 Results– Reviewed $3.5 Billion spend – Recovered $10.8 Million in 2009
15
Spend Analytics
• Two components: the tool and the operational expertise
• Selection of BravoSolution as best-in-class• Pilots in process – full release scheduled Q2, 2010• Cost will be below market competitors• Functionality will include:
Price auditing Optimization reports Compliance / coverage reports Future Phase –
Benchmarking Cross-reference database
16
Additional Services
• Supply Chain Consulting - driving operational improvements Supply Management Action Teams – Value Analysis Integration Operations Assessments Shared service and consolidated Service Center operations and
financial reporting
• Labor Management Management of contract labor Nurse and allied health recruiting Certification and training at deep market discounts Scheduling technology, A/P management and productivity
tracking
• Alternate Care – AdvantageTrust Leveraging acute care pricing to serve non-acute market Portfolio offerings for distinct classes of trade
• Long-term care, physicians clinics and home health
• Objective Extend portfolio value to other industries (growth) Add purchasing volume (leverage) to further enhance price
advantage for all members
• 140 current members $600M in Committed Volume
• Case Studies Office Supplies – $70M to $200M in three years – largest Staples
customer Car Rental – $5M to $25M in three years. The incumbent, Hertz,
lost but became a CoreTrust member
CoreTrust Purchasing Group
18
Some member companies include:
THANK YOU
19