N.H., New England hospitals form purchasers group

Three New Hampshire hospitals – along with 25 others from around the region – have formed a new purchasing coalition aimed at driving down costs by as much as 12 percent in the face of decreased government reimbursements and rising expenses.According to a press release, Mary Hitchcock Memorial Hospital in Lebanon, Nashua-based Southern New Hampshire Health System and Wentworth-Douglass Hospital in Dover have joined forces with 25 other New England hospitals to form the Northeast Purchasing Coalition LLC, a network that represents nearly 17,000 hospital beds, 5,000 physicians and over $2 billion in combined annual non-salary expenses.Using economies of scale, the participating organizations will aggregate purchasing volume on contracts, decrease product utilization and incorporate clinical subcommittee recommendations to develop best practices.The individual hospitals of the coalition were already members of VHA Inc., and Irving, Texas-based health-care supply chain management company, through regional affiliations in VHA New England, largely comprised of hospitals in Northern New England and VHA Northeast, with membership primarily in Southern New England.While the individual hospitals will still be allowed to make independent purchasing decisions, there is a stated commitment to pursue product standardization through the VHA SupplyNetworks program to further improve cost savings.According to VHA, members of its VHA SupplyNetworks program can save an estimated 8 percent to as much as 12 percent annually through supply chain efficiencies.The member hospitals will also tap into Novation, VHA’s supply contracting provider, to further streamline expenses.”Hospitals are pressing hard to find new ways to save money and deliver efficient care without cutting staff, limiting services or sacrificing clinical quality,” said Gerry Roche, area senior vice president and executive officer for VHA Northeast and VHA New England. “By aggregating volume through VHA SupplyNetworks, our members can zero in on standardization opportunities and establish a platform to discuss clinical utilization, both of which hold significant potential for savings and higher quality of care. VHA SupplyNetworks also creates opportunities for operational efficiencies that aren’t available through any other means in the health-care industry today.”NPC will form its own oversight committee comprised of supply executives from its member hospitals who will develop strategies, guidelines and processes to help achieve cost savings objectives.VHA has 23 VHA SupplyNetworks nationwide, saving participants $100 million in 2010. – CINDY KIBBE/NEW HAMPSHIRE BUSINESS REVIEW