UHC report outlines ways to combat high cost of care through supply chain purchasing process

While health care reform looks at ways to combat the high cost of care, many of the nation's top hospitals have already found ways to eliminate unnecessary costs through the supply chain purchasing process.  In its first-ever mid-year supply chain report, UHC, which represents more than 90 percent of the nation's academic medical centers, highlights ways its member hospitals have used the power of group purchasing to keep supply chain costs down.

UHC members achieved $260 million in annualized contract savings in 2010 - $79 million more than in 2009 - through partnership with supply contracting company, Novation. Significant savings ranged from $43 million in savings for medical equipment, including syringes, exam gloves and intravenous catheters; to medical devices, such as medical imaging, and radiology equipment, computed tomography machines and ultrasound equipment, which had a 20-40 percent savings off of typical list prices.

"We are pleased to be able to leverage the group purchasing power of the nation's top providers to negotiate the best pricing deals possible with manufacturers," said Jake Groenewold, senior vice president, Supply Chain, UHC. "This process allows hospitals to save substantial amounts of money to help keep health care costs lower and to re-invest in infrastructure, training and staffing, all with improving the patient care experience."

The UHC report outlines additional ways costs have been trimmed, including:

• Improving clinical resource management for academic medical centers through SpendLINK®, a tool that incorporates UHC's clinical data and spend data, allowing members to quickly identify opportunities in resource management.
• More than 50 analyses from UHC supply chain consultants since 2010, resulting in potential savings opportunities of more than $50 million.

An independent report from Purdue University in May 2011 found that group purchasing organizations (GPOs) decrease overall purchasing costs for American hospitals and other providers. Additional health care cost reduction measures, patient safety efforts and a variety of other related topics will be discussed at the UHC Annual Conference, entitled "LEAP: Lead Excel Achieve Perform." The conference will be held September 21- 23, 2011 in downtown Chicago. More than 1,000 member attendees are expected, representing the more than 100 academic medical centers across the country.