Flexing Some Muscle
Premier subgroup seeks to expand market for environmentally friendly products.
The five Premier IDNs that recently formed the Catholic Contracting Group intend to use their collective purchasing muscle to strengthen the market for environmentally friendly and patient-safe products.
The five IDNs – Bon Secours Health System, Catholic Healthcare Partners, PeaceHealth, SSM Health Care and Catholic Healthcare West – announced in November 2005 that they would form a group within Premier to “work together on shared supply chain improvement goals.” Together, they represent $2.4 billion worth of annual purchases through Premier contracts. That’s almost 10 percent of the total volume of purchases made annually through Premier contracts – $25 billion.
“The members have been meeting informally for about a year in conjunction with Premier sponsored meetings,” says Keith Callahan, VP of supply chain management for Catholic Healthcare West, San Francisco. “The members decided that there was real value in formalizing the relationship and asked for Premier’s assistance.”
Seeking ‘positive change’
“That the systems are large translates to greater purchasing power,” Callahan says. “That the systems are Catholic means that we all share essentially the same goals in terms of environmental protection in the hospital setting.”
Indeed, the group will use its volume to “seek additional value from suppliers, primarily with commodities, where a decision to work with one supplier has advantages,” he says. But its mission is broader.
“We É believe that it is our responsibility to leverage our size to help drive positive change in the health industry,” says Callahan. “The goal of the group is essentially to use our collective purchasing power to advance key environmental and patient safety initiatives we advocate for … With more systems advocating for products that are safer for our patients and our employees while minimally impacting the environment, we are hoping to influence and increase the availability of these products.”
The participating IDNs will remain loyal members of Premier, says Callahan, who compares the Catholic Contracting Group with other Premier subsets, such as the Greater New York Hospital Association. “[The Catholic Contracting Group] will be accessing the Premier contract portfolio and taking advantage of the hard work, research and due diligence that the Premier contracting staff performs, just as any other membership group. The members have contracted with Premier and are funding additional staffing specifically for [Catholic Contracting Group] initiatives.”
Although the Catholic group is “open to expanding membership,” it is not actively seeking new members, he says.
Catholic Healthcare West has already embarked on a number of environmental initiatives. In fact, the IDN:
Recently signed a five-year, $70 million contract with B. Braun for products free of PVC/DEHP, which has been linked to cancer, reproductive defects and other illnesses. It has aggressively sought to eliminate the use of mercy products at its hospitals, and installed water-saver devices to wet-film processors at its hospitals, with a projected savings of 75 million gallons of water annually, a reduction in wastewater production, and an estimated savings of $300,000 per year
The IDN promotes recycling of the blue plastic wrap used to protect surgical instruments and IV bags, which accounts for 20 percent of surgical waste. In 100 days, St. Mary’s Medical Center in San Francisco collected and bailed 2,500 pounds of sterile wrap. It also leverages its investment portfolio to promote corporate social responsibility and accountability.
One Catholic Healthcare West facility – St. Joseph’s Hospital and Medical Center in Phoenix – recently completed a $2.6 million energy retrofit project that will reduce electric consumption by 4.5 million killowats, natural gas by 740 thousand therms, and water by 23 million gallons. The project should bring a minimum annual savings of $678,000.