How One Health System Drove Cost, Performance and Quality Improvement in Laboratory Services

Key takeaways:

• One Premier member health system recognized the vital need to drive financial and operational improvement in its laboratory services department while maintaining quality outcomes.
• Key elements in their approach included tapping into industry-leading group purchasing organization (GPO) contracts, a strong value analysis approach and focused team of experts to strengthen the execution of a clinically integrated supply chain.
• The health system partnered with Premier to drive savings, reduce waste and improve workflow, and support the continued delivery of outstanding patient care.

As one of the largest, most comprehensive providers of health services in Maryland, one Premier member health system has more than 1 million patient encounters annually – with needs ranging from primary care and prevention to complex cardiovascular procedures, neurosurgery and intricate robotic surgeries.

In May 2021, the health system sought to enhance operational efficiencies, quality improvement and cost savings opportunities in the laboratory services space via the supply chain.

Leveraging Premier’s industry-leading GPO contract portfolio, the health system recognized more than $496,000 in total savings on just one product conversion – while reducing patient identification errors by 10 percent.

Premier spoke to the health system’s Administrative Director of Laboratory Services & Pathology to learn more about how her team is fostering optimal management of its lab services portfolio and driving high-value healthcare.

The following is a question-and-answer format conducted in an interview between Premier and the health system leader.

The Opportunity

Today’s healthcare environment calls for a model that is focused on building healthier communities and strong outcomes while maintaining highly effective and efficient operations.

Meeting these goals for our team required that we analyze our purchasing and identify areas to enhance operations, reduce waste and receive best-in-class value on products based on the total cost of care. We needed actionable data and insights on category spend, product alternatives and clinical outcomes to help manage supply chain costs without sacrificing quality.

Equally important in my role and for our organization overall is balancing clinician and patient satisfaction with our operational and financial goals. For us to be successful with cost and value analysis initiatives over the long term, we need to ensure our clinicians are engaged and have access to the high-quality supplies they need to best treat our patients.

The Solution

Our health system worked with Premier’s supply chain services team to support the evaluation of Point of Care Blood Gas products and a potential product conversion opportunity from an off-contract supplier to an on-Premier-contract supplier.

Point of Care Blood Gas analyzers are vital bedside testing solutions to provide rapid, lab-accurate blood gas, electrolyte, and metabolite (BGEM) results and help inform care decisions.

A multidisciplinary team, inclusive of 33 of our clinicians, were engaged in the analysis and pilot to ensure product viability, process differences and overall experience – looking comprehensively at cost, quality and outcomes to generate opportunities for improvement.

Significant time and effort were dedicated to confirming product efficacy and outcomes, with the collective team understanding that their contributions ultimately help save lives.

With any potential new product or change in product, collaboration with the appropriate staff and stakeholders is critical, including suppliers. The Premier-contracted supplier was actively engaged in the process – providing educational support, transparent functional analyses of proposed product against product currently available, and helping to establish a thoughtful plan to assist with successful conversion and adoption. Supply chain resiliency and risk mitigation against potential disruptions were also key factors in our up-front decision-making process, and with the supplier manufacturing the product near-shore to the U.S.

The Results

The value analysis process and pilot validated the product conversion for our team – and we made the switch to the Premier-contracted supplier.

This single conversion enabled more than $496,000 in total savings alongside cost reductions in product test cartridges, instruments, room temperature storage and service contracts. This includes annual savings in both service and supply costs for the length of the contract.

Beyond cost savings, the Point of Care Blood Gas product available on Premier contract is helping my team optimize time, resource utilization and waste reduction. For example, the product’s wireless system created efficiencies for our team and eliminated the need for wired ports – and we were able to simplify our inventory management with room temperature stable test cards that have a significantly longer expiration date.

Most importantly, the Premier-contracted product helped us accelerate clinical decision making, received favorable feedback from our 33 clinical team members, and reduced patient identification errors by 10 percent.

For every hour you wait to give an antibiotic or other therapeutic, the mortality for that patient can increase. Now that we have this innovative device, our nurse can get results within minutes, and make faster, evidence-based decisions on how to best treat that patient.

Healthcare providers today need strong strategies that drive savings – and enable clinical and operational success. Premier’s GPO provides us access to a broader range of high-quality vendors and suppliers, reducing the time and effort required to find the right products and services. It’s also given us the ability to access best-in-class pricing in exchange for volume and buying loyalty, which has translated to immediate results in reducing our supply expenses.

But this journey wasn't singularly about saving money. It was about optimizing patient care, and the patient experience. We saw improvement in quality, efficiency and cost.

What Advice Would You Give to Other Hospitals?

Alongside a greater emphasis on value-based care, the right GPO partner is negotiating contracts with suppliers that offer high-quality products and services at a reasonable cost, with an eye toward improving patient outcomes, reducing waste and delivering more value for members.

Look for a GPO partner who understands the unique requirements of its members and tailors innovative solutions and services to meet those needs.

The power of the Premier alliance has been an instrumental source of information and intelligence for our health system. The ability to connect with Premier experts as well as other members that have implemented product conversions and get their clinical expertise and perspective, especially in specialized categories, is vital.

In Premier, we have a true partner that is helping me prioritize what’s best for our organization. They leave no stone unturned for opportunities, and give us the data, tools and insights we need to save time, money and drive continued, high-quality patient care.

For More:

• Check out our blog and meet the future of value analysis in healthcare.
• See how PINC AI™ Margin Improvement is supporting supply chain optimization and a healthier bottom line.
• High compliance, not high maintenance. Learn how SURPASS is one of the fastest ways to drive cost reductions across your health system, eliminate inefficiencies and duplications, and deliver more value to patients.