Materials management leaders at Methodist Hospital in Henderson, Ky., say they have realized significant supply chain savings by using a spend management decision-support solution.
Methodist participates in the Premier healthcare alliance's Accelerated Supply Chain Endeavor (ASCEND) program and uses Premier's spend management decision-support technology.
In September 2009, Methodist reduced supply chain expenses as a percent of operating revenue from 13.46 percent to 12.17 percent. The September and October 2009 combined total for medical supplies, food and drugs, and general supplies was down 9.14 percent when compared to budget.
"Numbers don't lie. It's only going to get better," said Don Nauser Jr., director of materials management at Methodist Hospital. "We have accomplished what we wanted to do, and that's to affect market share."
Premier says ASCEND helps hospitals achieve and sustain rapid improvements in supply chain performance.
"Independent hospitals, particularly smaller ones in rural areas, must remain viable to compete and serve their communities," said Premier Purchasing Partners President Mike Alkire. "The economic downturn has not made it easy for hospitals, like Methodist, to serve their communities while competing with larger hospitals within easy driving distance."
Alkire said about 150 participants representing $3 billion in supply chain purchasing volume are collaborating to share best practices in supply chain efficiency as a part of the ASCEND program.
According to Premier, participants in the program have reduced their supply expenses in recently launched categories by up to 24 percent since May 2009.
Nauser said Methodist now has a much better picture of its supply spend.
"I found I was paying over contract price in a particular category," he said. "The amount of money vendors owe us is in the tens of thousands of dollars. That would never have been caught before."