Yankee Alliance President and CEO Larry Kaufman believes there’s more value for healthcare stakeholders in working together than remaining insular.
March 2022 – The Journal of Healthcare Contracting
By Daniel Beaird
Larry Kaufman has been president and CEO of Andover, Massachusetts-based Yankee Alliance, a national GPO and certified sponsor of Premier, Inc., for a little over a year, taking the helm last February, after former president and CEO Cathy Spinney retired. He has a demonstrated history of creating patient-focused cultures for serving health systems, most recently as president and CEO of Trivergent Health Alliance MSO in Maryland and 35 years with HCA Healthcare and HealthTrust, the HCA-initiated national GPO.
After more than 20 years running hospitals at the C-suite level for HCA, Kaufman moved into the CEO role for the eastern U.S. for HealthTrust and his responsibilities expanded to non-HCA facilities.
“That gave me exposure to a lot of organizations from Miami to Maine that had their unique challenges,” he said. “And states in between like Georgia that suffered from a large number of critical access facilities closing over the last several years and that was pre-COVID. Just challenges upon challenges, and then COVID hit.”
Trivergent gave him the opportunity to work with a group of hospitals in Maryland to centralize some of their enterprises like supply chain, pharmacy, and laboratory operations. “The idea being that we are better together. That gets more important over time,” Kaufman said. “It was doubly important in Maryland because Maryland is the only state in the U.S. that has a capitated approach to healthcare. That kind of population health focus drew me there.”
Maryland operates the nation’s only all-payer hospital rate regulation system. Under a 36-year-old Medicare waiver that exempts Maryland from the Inpatient Prospective Payment System (IPPS) and Outpatient Prospective Payment System (OPPS) and allows the state to set rates for these services, all third parties paid the same rate. CMS and Maryland partnered to modernize the state’s unique all-payer rate-setting system for hospital services that aimed to improve patients’ health and reduce costs, and updated the waiver to allow Maryland to adopt new policies that reduced per capita hospital expenditures and improved health outcomes.
“Finally, Yankee Alliance was an opportunity to work with an organization established a long time ago with the idea of working together,” Kaufman said. “Yankee has done well since its beginnings in 1984 given how many changes have affected the healthcare industry.”
“Yankee’s members are always looking to take it to the next level to drive out unnecessary cost. I like being around people who are inspired to do better and are open-minded to work with organizations that could be identified as competitors,” he said. “There’s more value in working together than being insular.”
Kaufman classifies group purchasing as a service industry serving a service industry. “My previous employer HCA had – at any given time – north of 250 hospitals, but they still needed all the friends they could get. Hospitals will continue to look to each other to improve. CEOs are looking for real ways to work together like they never have before, not just sharing information over a cup of coffee but structuring components of operations,” he said.
That’s where GPOs like Yankee Alliance come in. They have a tremendous amount of information but they’re not the source of it. “We’re kind of like a good point guard in basketball. We get the ball, and we pass it,” Kaufman said. “We’re making sure we’re plugged into the industry and connected with our members.”
Whether it’s access to PPE, a value analysis function or contracting, Yankee Alliance provides the environment for its membership to interface with each other for solutions. “Everything we do is in a glass house with the lights turned on,” Kaufman explained. “Everything we’re tackling should be something that has been a problem or an opportunity for our membership. We’re flexible to whatever is slamming our facilities that week.”
Yankee Alliance is a certified sponsor of Premier, Inc., and its group purchasing program combines the Yankee Alliance portfolio of contracts with those negotiated by Premier. Yankee Alliance’s contract managers assist with implementation, troubleshooting problems with suppliers or contract service issues and answering questions.
“From the start, we’ve focused on contracting, whether it’s commodities or other supplies that a hospital uses, we look at what our members are purchasing and identify opportunities for aggregation to increase our negotiating strength,” Kaufman said.
Yankee Alliance’s contract portfolio includes 2,641 Premier contracts, 456 Yankee Alliance aggregated Premier contracts and 191 Yankee Alliance specific contracts.
“We create our own contracts for what our members are buying that aren’t Premier contracts,” Kaufman added. “Things like purchased services and other areas. It’s a matter of us paying attention to what’s happening within our membership and using that data to tell us what we need to be contracting for and not.”
Yankee Alliance also offers support and assistance in clinical areas with a large focus on value analysis. “Our job there is to see where our members are relative to the best demonstrated practices in the value analysis process,” Kaufman said. “We use evidence-based practices to help them move from where they are to where they’d like to be.”
Kaufman says the common theme of sharing information is all the same. Yankee Alliance runs comparative analytics to show its members where they stand relative to each other. That creates interest, positive peer pressure and motivation to members to do better.
“It’s all about operational excellence,” Kaufman concluded. “You never know where a solution is going to come from. This industry is always changing, and hospitals will collaborate in ways they haven’t before to benefit from speed to learning, strength in numbers and functioning more effectively to drive out unnecessary variations.”
Larry Kaufman, FACHE, joined Yankee Alliance as its president and CEO on Feb. 1, 2021. He most recently served as president and CEO of Trivergent Health Alliance MSO in Maryland and has held various hospital administration and GPO leadership positions. He has more than 35 years of experience in labor and non-labor cost reduction, physician and clinical integration, and the development of strategic initiatives – both operational and clinical – to reduce variation, cost and improve quality.
Yankee Alliance has grown to more than 18,000 members in all classes of trades across all 50 states. It is a member-driven national healthcare GPO with a two-fold mission: to collaborate with members to reduce supply and operating expenses through aggregation of data, purchasing, ideas and knowledge, and to excel in strategic innovations that continually assist members in reducing their cost while recognizing their individual needs.
Labor shortages, technology, critical supplies and sourcing
Hospitals are being forced to shelve services because of staffing shortages. Boston’s Tufts Medical Center announced recently it is closing its Boston children’s hospital, known as the Floating Hospital for Children (due to its founding as a ship in the 1800s to bring sick children into the Boston Harbor for fresh air and medical treatment).
Tufts plans to continue operating its pediatric primary care services and neo-natal intensive care unit, but the closure announcement has caused concern among Massachusetts’ pediatrician offices. Representatives for Tufts Medical Center have stated that the children’s hospital has been in question for a while and the hospital faces high demand for beds as more adult patients require specialized care.
“Right now, people are looking at two things,” Kaufman said. “They’re looking at the pain they’re feeling – there are nursing units closing across the U.S., among other negative things. Then, they’re looking at the future and how to get out of these predicaments.”
Kaufman says there’s nobody rushing to the forefront with the solution, but that it will be a combination of many different things.
“First, it’s about creating environments in which the staff wants to be there, in spite of having gone through a pandemic,” Kaufman said. “You want to make sure the world you’re putting your employees in is as good as it can possibly be, so when they’re thinking about ‘do I stay or do I go,’ they stay. You also have to make sure you’re using those employees as efficiently as possible.”
“And finally, hospitals and health systems are trying to reinvigorate some things they’ve been doing for years and looking at the work that needs to be done in higher education and teaching institutions to produce more labor,” Kaufman said.
After the pandemic, Kaufman says the challenge of attracting more labor lies in the perception of what the healthcare industry is about. “We need a serious makeover on the value and quality of life you can have by working in a hospital,” Kaufman said. “Working in healthcare used to be seen as an awesome thing to do. But the question today is do people want to do something they feel like puts them in harm’s way? We have to work on that.”
Technology is advancing in every way in the healthcare and supply chain industries. “It’s going to advance with or without us,” Kaufman said. “We don’t have a choice of taking advantage of AI (artificial intelligence) or machine learning. There are applications in every area, certainly within supply chain.”
“Healthcare is going to follow every other industry. We won’t turn into the auto industry with robots running assembly lines, but we’ll have robots functioning in hospitals in one form or another – whether it’s in the pharmacy, roaming the halls or cleaning the patient rooms with a UV scan. It’s going to continue to be a disruptor,” Kaufman said.
Critical Supplies and Sourcing
“Our members have critical supplies now that they wouldn’t have been carrying two or three years ago,” Kaufman said. “Everything was just-in-time back then and now with all of this inventory sitting around, there has to be an efficient way of keeping it.”
“It’s similar to looking at hospitals on the Gulf Coast. I spent most of my career in Florida being ready for the next hurricane. There was always a part of the warehouse that was just hurricane supplies – everything from water to plywood to cots. Now, we have hurricanes hitting everywhere and supply chain issues still going on,” Kaufman said.
Yankee Alliance works in coordination with Premier on sourcing. “We support onshore and near shore manufacturing as much as we can, and diversifying sourcing so it’s not all coming from China,” Kaufman said. “We’re also advocates for the industry, making sure our members and ourselves are speaking to Congressional representatives on the importance of developing a database to know where critical supplies are.”