Supply chain

Savings made by hospitals using GHX

TORONTO and OTTAWA – In just six months, Champlain Health Supply Services (CHSS), in eastern Ontario, was able to record aggregated cost savings of $467,000 – nearly twice the amount targeted for the entire first year – in part by employing GHX to improve the quality of data across multiple facilities.

At the end of the first year, CHSS also has achieved one-third of its savings goal of $1.5 million for next year and has targeted $34 million in savings over the next nine years.

Champlain Health Supply Services (CHSS) was formed just over a year ago to integrate sourcing, procurement and logistics for a group of hospitals in the greater Ottawa area of Canada, all with different information technology (IT) systems.

CHSS undertook the data cleansing project to build its business case for a large supply chain integration initiative that will connect 12 participating hospitals with 90 percent of the trading partners from which they purchase medical-surgical supplies and with HealthPRO, their group purchasing organization (GPO).

This initiative will allow them to conduct business electronically through a consolidated integration platform. GHX is providing the technology platform as well as data and price management solutions. Having accurate, quality data is key to the success of any supply chain improvement initiative, John Martin, Director Hospital Services, Queensway Carleton Hospital, told an audience of healthcare providers and suppliers at the 2010 GHX Supply Chain Summit in Orlando, Fla. Martin is regional lead for Integrated Supply Services for CHSS.

“Without having a high degree of confidence in your data, it's difficult to establish a baseline,” Martin said. “And if you can't establish a baseline, it's difficult to create a business case and measure success. You don't know what you don't know until you try to measure it.”

CHSS recognized that dealing with the quality of data across multiple sites was one of the most significant challenges it faced. To address that challenge, it engaged GHX advanced content services to validate its contract savings opportunities against its GPO data, then used the data to develop its business case and move forward.

“Without GHX, it wouldn't have been possible to build our business case,” Martin said. “When we began, we had six item masters to compare against HealthPRO's contract file. GHX helped us clean up those item masters so we could validate contract price savings.”

CHSS also made it possible for all of its member hospitals to conduct business using electronic data interchange (EDI). Prior to working with GHX, only two hospitals were using EDI for significant volumes of transactions. Nils Clausen, general manager, GHX Canada, said the fact that CHSS already is documenting savings from its supply chain integration efforts shows that the participating healthcare organizations, which have a history of working together to improve the delivery of patient care and services in the Champlain region, have begun a similar collaborative effort to address supply chain integration.

“CHSS has a long-term vision of integrating sourcing, procurement and logistics for participating hospitals and ultimately other healthcare providers, and GHX will continue to support them as they implement technologies and processes to achieve that vision,” Clausen said.

As the business hub for healthcare, Global Healthcare Exchange, LLC (GHX) enables healthcare providers and suppliers in North America and Europe to reduce costs and improve margins by automating processes, reducing operating expenses and increasing knowledge-based decision making. Products and services include trading partner connectivity, order and contract management and validation, data synchronization, sales force automation and business intelligence. Equity owners of GHX are Abbott Exchange, Inc., AmerisourceBergen Corp., Baxter Healthcare Corp., B. Braun Medical Inc., BD, Boston Scientific Corp., Cardinal Health, Inc., Covidien, C.R. Bard, Inc., Thermo Fisher Scientific Inc., GE Healthcare, HCA, Johnson & Johnson Health Care Systems Inc., McKesson Corp., Medtronic USA, Inc., Owens & Minor, Premier, Inc., Siemens, University HealthSystem Consortium, and VHA Inc. For more information, visit www.ghx.com.

About Champlain Health Supply Services (CHSS)
Hospitals in the Champlain LHIN have a history of collaboration, working together to improve the delivery of patient care and services to the clients in the region. To this end, Champlain Health Supply Services (CHSS) was incorporated in the Spring of 2008. The long term vision of CHSS is to implement a shared service organization to integrate sourcing, procurement and logistics for Hospitals and ultimately other health care providers in the Champlain region. The integrated Supply Chain system will improve client performance and generate savings for use in direct patient care. The Sourcing integration initiative is underway with the 12 hospital participants in the Champlain Health Supply Services organization. A parallel activity for Champlain regional logistics is completing its business case approval process and a Request for Proposal to complete an Implementation Analysis for regional Procurement has been released.

Posted June 17, 2010