South County Health awarded high marks in lowering costs

Published 05/22/2019

South County Health Purchasing TeamFor the second consecutive year, South County Health has received Yankee Alliance’s Savings Award, a recognition given to member organizations that realize significant cost savings by leveraging purchasing power on goods and services.

The South County Health Purchasing Team used Yankee Alliance’s resources to earn the Savings Award: <100 Beds, which is awarded to the Acute Care Facility with under 100 beds with the highest savings per adjusted patient day.

The cost savings for 2018 was $800,000. South County Health received the same award in 2017 for realizing $1.2 million in savings.

Mary F. Phillips, Materials Management Manager, said that belonging to Yankee Alliance benefits South County Health in two ways. It allows South County Health to take advantage of wholesale pricing on goods even when our organization is buying a relatively small amount of the product. By being part of the group purchasing organization (GPO), South County Health also benefits from the analytics developed by Yankee Alliance that illustrates purchase and usage experience on a number of equipment and supplies used throughout the organization.

The items purchased range from food services, office equipment, linens, surgical supplies and a wide range of other items.

“To be able to get the pricing (offered to) some of the larger hospitals can be difficult,” Mary said. “A lot of the times the big vendors will say ‘We have this little hospital, but by working as a group we’ll take the aggregate of your spend … and give you a tiered pricing.’”

In addition, she said, South County Health participates in value analysis meetings – one specifically for surgical services and one that is more general for the system. These meetings are attended by key staff, physicians and a representative from Yankee Alliance.

“The collaboration with physicians is really good here,” Mary said.

Throughout the procurement process, the Purchasing Team, including Jim Covington, Senior Contract and Supply Chain Specialist, and Ralph Mitchell, Team Leader Materials Management Distribution Center & Sr. Buyer Materials Management, shares vendor and other data they’ve collected with the GPO.

“They run analytics behind the scenes for us,” Mary said of the shared data.

These analytics are useful in making comparisons with similar hospitals to gauge efficiencies, utilization and vendor pricing.

Cost savings can vary year-to-year, Mary said, due to global and national economic influencers, as well as priorities and patient care initiatives being implemented at South County Health during any given year. Still, as demonstrated with participation in a group purchasing organization, significant cost-cutting measures can be operationalized without sacrificing patient care or a positive patient experience.

Mary has already forecasted significant savings in several areas for the current fiscal year, hoping for another high mark in lowering costs.

“We are going for the hat trick,” she said, referencing a hockey-related term that refers to a player scoring three goals in a single game.