Contracting News January/February 2007

Iowa Clinic plans expansion
Iowa Clinic PC (Des Moines) plans to expand Iowa Clinic West Lakes Campus, in West Des Moines, to meet patient demand. Construction will begin in spring 2007 on an 85,000-square-foot addition that will double the clinic’s space. The $420 million project will allow Iowa Clinic to introduce new services such as a sleep laboratory and pulmonology and urology clinics. The clinic, which opened in 2003, handled about 90,000 patients in the first year, increasing to 150,000 patients in 2006.

Swedish Health names Hochman as CEO/President
Seattle-based Swedish Health Services named Rodney F. Hochman, M.D., as president and CEO, effective April 2, 2007. Hochman will succeed Richard Peterson, who announced his retirement in June 2006. Hochman currently serves as executive vice president of Sentara Healthcare, of Norfolk, Va. Hochman’s appointment followed an extensive national search conducted by Swedish.

UK Health seeks approval to add beds
Lexington, Ky.-based UK Healthcare will seek CON approval to add 192 patient beds at the University of Kentucky Hospital. The hospital currently has 473 beds and is operating at maximum capacity. The beds would be placed at the existing hospital and in its $450 million replacement hospital, to be built where the hospital’s parking garage now stands. Plans call for adding an additional two floors to the top of the new structure to allow all the beds to be placed in one facility. The additional floors would add $20 to $25 million to the cost of the project. The old hospital will be demolished to make way for an outpatient services building. The new hospital is expected to open in 2010 or 2011.

Almost Family buys Florida home health agency
Louisville, Kentucky-based Almost Family Inc. purchased a home health agency in Jacksonville, Fla., from Clearwater, Fla.-based Bay Care Health System. The acquired agency generated nearly $2.5 million in revenue in 2006. Terms of the acquisition were not disclosed. In November 2006, Almost Family acquired an Orlando, Fla., agency from BayCare. This marks Almost Family’s ninth acquisition since 2004.

Hunterdon Health undergoes improvements
Flemington, N.J.-based Hunterdon Healthcare System is undergoing numerous construction and technology projects. Hunterdon Medical Center, of Flemington, N.J., will open a four-story, 449-spot parking deck on the northern end of the hospital campus in February 2007. Later in 2007, the $10 million Wescott Medical Arts Center will open. It will double the number of rooms for patients with diabetes and increase surgical capacity. The Clinton Health & Wellness Center and Medical Office Building is slated to open in 2008. The system also plans to spend over $3 million by Dec. 31, 2009, for an electronic medical record system at the hospital. Veterans Affairs issues request for proposal Department of Veterans Affairs, VISN 07 Network Logistics Office, at Tuskegee, Ala., issued RFP 247-0476-06 due Dec. 21, 2006, and amended Jan. 16, 2007, to procure the lease of a Picture Archiving and Communications System for usage at the Atlanta VA Medical Center and VA Medical Tuscaloosa (Ala.). The Point of Contact is

New Albany Surgical Hospital merges with Mount Carmel Health
New Albany, Ohio-based New Albany Surgical Hospital merged with Mount Carmel Health System, of Columbus, Ohio, which is part of Novi, Mich.-based Trinity Health. The merger brings the total number of Trinity Health’s owned and managed hospitals to 45 in seven states.

Shands Healthcare breaks ground on new cancer hospital
Gainesville, Fla.-based Shands Healthcare at University of Florida broke ground on its $388 million cancer hospital. The 500,000-square-foot Shands Cancer Hospital will be located at Shands Hospital at the University of Florida and the Health Sciences Center. It will include 192 private inpatient beds and a critical care center for emergency and trauma-related services. Construction is scheduled for completion in 2009.

I read the article in the Journal of Healthcare Contracting about pharmacy and med/surg issues often looking alike (“Mirror Image: Why pharmacy, med/surg issues often look alike,” November/December 2006 JHC). Standardization of products and compliance with the GPO portfolio are two good practices that are similar in pharmacy and med/surg areas. However, there needs to be a move to the next level. There is an opportunity to begin addressing disease prevention and treatment opportunities together.
There are devices and pharmaceuticals that may be used to treat or prevent disease that need to be addressed for clinical effectiveness, acquisition cost, acquisition cost to reimbursement, patient and nurse satisfaction, etc. One example is sequential compression devices (SCDs). SCDs are purchased and negotiated through supplier services, while low molecular weight heparins are negotiated through pharmacy. When protocols for the prevention and treatment of deep vein thrombosis are put together, both treatments may be considered, but does pharmacy think about non-drug treatments and does supplier services think about pharmacologic treatment when negotiating contracts? Which treatment has the best outcome for the patient and what is the cost for each treatment? This issue needs to be addressed, and there is an opportunity for cost-savings.
Another example is treatment of chemo-induced anemia. Who negotiates the blood contracts? Is there a discussion around utilization of blood components vs. pharmacologic approaches? The utilization of PROCRIT®, Epogen®, or Aranesp® will save the need for packed red blood cells. However there is a cost-shift to the pharmacy department from the blood bank. Part of a full analysis in the outpatient setting should include, “How long does it take to infuse a unit of packed red blood cells (patient throughput) vs. drug injection, and how is each product reimbursed (profit margin)?” Every drug is not an expense.
These are just two examples where pharmacy and supplier services can work together in a collaborative approach. All hospital departments need to follow the balanced scorecard model of addressing finances and patient outcomes, and there can be no silos between departments.

Fred J. Pane, R. Ph.
Senior Director, Pharmacy Affairs
Premier Inc.
Charlotte, N.C.

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