Supply chain management
Supply chain solution expected to save $32 million
OTTAWA – Champlain Health Supply Services (CHSS) is the first shared services organization (SSO) in Canada to have one of its hospitals, Montfort Hospital in Ottawa, go live on GHX Procurement Suite. CHSS estimates the Web-based solution for managing non-file and off-contract procurement, along with improvements to its business processes, can help it achieve $32 million in cumulative supply chain cost savings over the next five years.
Originally, CHSS set a $32 million savings goal over a 10-year period, but with greater savings than expected during the first year and the enhanced procurement capabilities currently being implemented, CHSS now expects to realize that goal in just five years.
“We have taken a group of hospitals and put into place the framework and building blocks to help enable them to fully control and drive spend,” said John Martin, director of Hospital Services, Queensway Carleton Hospital, and regional lead for Integrated Supply Services for CHSS. “The addition of Procurement Suite is particularly important because it provides a consistent and standardized process for CHSS hospitals to increase operational efficiency and improve financial and clinical outcomes.”
CHSS, a sourcing organization that centralizes the efforts of 12 hospitals with disparate IT systems, will use Procurement Suite to gain better control over spending that occurs outside its member hospitals’ materials management departments. Procurement Suite offers a sophisticated catalogue search, order management and approval workflow platform that makes it easier for hospitals to source approved on-contract products they need, and monitor requisition status in real time.
CHSS has worked with GHX since January 2010 on a major supply chain transformation initiative. The initiative has involved connecting hospitals with combined revenues of $1.7 billion to 90 percent of the trading partners from which they purchase medical-surgical supplies and with HealthPRO, their group purchasing organization. In addition, the hospitals’ data, contract management and requisitioning processes were automated and their business processes optimized in concert with GHX Business Solutions.
“CHSS is an excellent example of a leading practice in supply chain management and provides a blueprint for other SSOs with multiple disparate systems to capture and manage off-contract purchasing,” said Nils Clausen, general manager, GHX Canada. “Its member hospitals will be able to leverage continuously updated, accurate contract data to create visibility to procurement occurring outside of their materials management systems and controls. That, in turn, will allow them to cut costs while still providing high-quality patient care.”
The SSO model being used in Canada is similar to regional services centers in the U.S., in which a regional approach is taken to contracting and distribution of goods. By employing this model, healthcare providers can realize increased efficiencies and costs savings in their supply chains.
Global Healthcare Exchange, LLC (GHX) makes healthcare more efficient by delivering software and services that enable both healthcare providers and suppliers to increase efficiency, lower costs and provide better patient care. With the largest footprint in healthcare supply chain management, GHX connects more than 80 percent of licensed hospital beds at U.S. hospitals, as well as providers in Canada and Europe, with the suppliers from which they purchase the majority of their medical-surgical supplies. GHX is transforming today’s linear healthcare supply chain into the industry’s only Healthcare Supply CloudSM, providing 360-degree visibility into areas affecting both clinical and financial performance. Working with GHX, organizations can improve business processes, automate supply chain systems and collaborate to solve the tough challenges facing healthcare today. GHX is owned by members of the healthcare industry, including 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 May 5, 2011