Shared sourcing and procurement saves hospitals $500,000

Champlain Health Supply Services (CHSS), a group of 12 Canada-based hospitals, reports that sharing services including procurement has saved nearly $500,000 in the last six months.

The group 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. In six months, its reported it was was able to record aggregated cost savings of $467,000-nearly twice the amount targeted for the entire first year.

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.

When the group was created CHSS undertook a data cleansing project to build its business case for a large supply chain integration initiative that will connect the 12 participating hospitals with 90 per cent of the trading partners from which they purchase medical-surgical supplies and with HealthPRO, their group purchasing organization (GPO). This initiative will allow the group's members to conduct business electronically through a consolidated integration platform. GHX is providing the technology platform as well as data and price management solutions.

John Martin, director hospital services, Queensway Carleton Hospital, said: "Without having a high degree of confidence in your data, it's difficult to establish a baseline. "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 also made it possible for all of its member hospitals to conduct business using electronic data interchange (EDI).

Procurement Tag - Supply Chain Management