Raising the Bar

For Keystone Alliance, working as a coalition has helped bring high-tech, high-cost services within reach

Improved medical technology and high-tech testing generally mean better results. But, there’s a price to pay – literally. So, when Amerinet’s Keystone Alliance came together in 2010 to enable members to work as a virtual IDN to access higher tier levels and improve financial outcomes – while maintaining high-level quality patient care – Wayne Memorial Hospital’s Laboratory Services Manager, John Romano, was on board.

An important part of Romano’s role at Wayne Memorial has been to help the 98-bed non-profit facility, which serves patients in rural Northeastern Pa., and Southwestern N.Y., obtain top-notch lab services at an ideal cost. That has become an increasingly challenging task, as high-tech laboratory testing, such as DNA sequencing used to diagnose deadly viruses, has moved from scientific research labs to commercial venues.

The formation of Keystone Alliance – originally a group of 11 healthcare systems comprised of 88 locations throughout Pennsylvania, New Jersey and Maryland – has made it possible to improve supply costs through aggregation. Most of the hospitals in the alliance had been using the same national reference lab and receiving the minimum contract discount through their individual organizations, according to Romano, Keystone’s board chairman. It was clear to the alliance members that as a group – the Amerinet Keystone Laboratory workgroup – they could do better.

The Journal of Healthcare Contracting spoke with John Romano about the advantages Keystone Alliance members have realized since the coalition’s inception over two years ago.

The Journal of Healthcare Contracting: How many hospitals currently belong to Keystone Alliance?
John Romano: Keystone Alliance has grown to include 12 parent facilities, comprised of 103 care sites. Amerinet is always looking to promote the value of the alliance to potential like-minded facilities.

JHC: Have you found the coalition is providing members with more advantages than originally expected?
Romano: Yes, Keystone members have discovered additional advantages to alliance membership beyond price reductions, including the opportunity to network with peers, share best practice solutions and pursue custom work with non-contracted vendors. There are many educational opportunities as well.

JHC: What are the top three initiatives your purchasing coalition has pursued in the last 12 months?
Romano: Keystone Alliance’s top three initiatives have included lab distribution, office supply distribution and lab point-of-care testing standardization.

JHC: How has being part of a regional purchasing coalition enabled Keystone members to leverage their buying power?
Romano: Working as a virtual IDN has enabled Keystone members to access tiers that were previously unavailable to them as stand-alone facilities. Working as an alliance has been a learned cultural shift for members – one that has required trust in one’s peers that all are working to make decisions that are in the best interest of the alliance. The more members work together and garner trust in one another, the further their success will take them.

JHC: How much savings did the coalition achieve in the first year, and how has this increased since?
Romano: The alliance achieved approximately 5 percent in savings in its first year. In the last 12 months, Keystone Alliance’s enhanced contracts have saved members between 8 and 12 percent at a minimum.

JHC: Can you explain the process whereby your supply chain executives meet and make their decisions?
Romano: Keystone Alliance is represented by a six-member board of key facilities, which work with the Amerinet Alliance Solutions Team to generate a 15-month strategic plan involving contracted vendors and custom vendor contracting opportunities. Keystone Alliance meets quarterly to review these enhancements offered by the GPO vendors and custom contract opportunities.

JHC: How do you co-exist with your GPO?
Romano: Keystone Alliance members, the Amerinet Alliance team, the field staff and the specialists team work together on solutions that will benefit the alliance membership. We look at all opportunities to reduce members’ costs, both contracted and non-contracted.

JHC: How do you ensure that the interests of each of your facilities are considered and that each facility’s needs are met?
Romano: Keystone Alliance is an open network, and individual members are polled and encouraged to provide information on their contracting needs. As an open system, members have the final say regarding which enhancements they utilize within the coalition.

JHC: How difficult is it to get buy-in to the coalition’s contracts from each of your facilities’ physicians and staff?
Romano: Whenever possible, we strive to gauge interest before proceeding, in order that we can achieve a high level of compliance. However, having the security of individual facility choice is a great benefit in gaining compliance. Not being forced to comply actually seems to work in our favor.

JHC: What have been the greatest rewards you have reaped, individually and as a coalition?
Romano: Our greatest rewards have been seeing the change in group dynamics and in [members’] willingness to tackle tougher targets, [which can lead to] the best results. Knowing that they trust the process and have become change advocates is exciting.

JHC: If you could change one thing about the way your purchasing coalition works, what would that be?
Romano: Due to the economy, some facilities haven’t been able to participate at all quarterly meetings. These members are missing so much beyond the information being provided on the roll-out of the enhancements. I wish all members could and would participate, as the networking and sharing of successful best practices is invaluable.

JHC: How do you envision your purchasing coalition in five or so years?
Romano: We expect to see our Keystone Alliance continue to grow with regard to the number of members, as well as contracted value. We would like to reach out and provide more than just price concessions to our members. We would like to keep them current on the latest healthcare issues and assist them in improving processes and solutions to improve the quality of care.

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