As U.S. hospitals continue to cut staff during the recession, healthcare executives and administrators are striving to remove inefficiencies across all of their operations.
For its part as a group purchasing organization, or GPO, Premier Healthcare Alliance has been delivering supply chain management efficiencies through a Web-based tool for seven years.
Premier, which operates a healthcare purchasing network for more than 2,100 U.S. hospital and 58,000-plus other healthcare site members, has been using BravoSolution's tool to automate contracting processes involving approximately 100 users across two offices.
"We always look to operate our business as lean as we can," said John Biggers, group vice president of Sourcing for Premier.
In today's dismal economy, hospital executives are looking for savings on products and services without sacrificing quality, and getting the right products at the right place at the right time, Biggers said. By implementing BravoSolution's technology, Premier was able to establish a consistent, repeatable process that enabled standardization and appropriate product utilization.
Implementing the solution helped save money, created efficiency and tightened the relationship between Premier and its hospitals, Biggers noted. Premier was able to eliminate some full-time employees (FTEs) who were managing its contracts.
While Premier added information technology FTEs to take charge of the software, training and building out of interfaces, Biggers pointed out that the staff is doing more with less.
"The gain in the tool is improving productivity," he said.
According to Biggers, staff are absorbing new work - which includes reporting back to members on data requests - in the 10 to 15 percent range without having to add more FTEs. While the work has been shifted to the sourcing staff, the manual, back-end, paper-based reporting tasks have been eliminated.
Despite the increased workload, Biggers said that after staff had undergone the change management process, user satisfaction with the tool has been between 8 and 8.5 on a scale of 10.
The real efficiencies come with the second cycle of contracts, he said. The Web-based tool has a data repository of all the work done in a contract cycle. In the past, the data was on multiple desktops and laptops. But now, once the cycle is complete, some of the data stored in the repository can be potentially reused, and staff has the ability to update supplier profile automatically.
Having the tool has also mitigated legal risks, Biggers said. Good policies and procedures, consistent processes and automated documentation provide a strong audit trail for any supplier who challenges the contract process.
Premier averages 400 contracts a year, but despite the 10-12 grievances filed annually by suppliers, the GPO hasn't had to reopen a contract dispute in several years, which also saves valuable staff resources.