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CHC in the Spotlight



Community Hospital Blog

September 2015
Supply Savings Invigorate Community Hospitals

By Tony Ybarra, SVP CHC Supply Trust


Community-based hospitals are the lifeblood of smaller communities.

These facilities not only provide access to local health care, but they also stimulate the local economy, helping create jobs in the hospital and the community. However, many rural facilities face significant financial and operational challenges. They see a larger share of Medicare and Medicaid patients and operate on thin margins. For these hospitals, examining ways to reduce expenses is critical.


Supply spend is the second-largest cost for hospitals behind labor. Nearly 80 percent of providers who participated in a Modern Healthcare survey on supply chain issues said reducing medical and surgical supply costs is a formal part of their organization’s strategic plan. Holding the line on supply chain costs is a top priority.


Let’s look at three approaches to help control supply spend.

  1. Collaborate with key stakeholders to negotiate better pricing. The highest percentage of supply costs is often associated with a hospital’s operating room. Get everyone to the table with manufacturers — hospital executives, physicians and surgeons — to negotiate for more favorable prices on physician preference items such as orthopedic implants and cardiac rhythm medical devices.
  2. Evaluate your group purchasing organization (GPO) options to maximize cost reduction. Today almost all hospitals have one or a variety of group purchasing contracts in place, however, the benefits offered vary significantly. For example, size is a disadvantage for smaller hospitals, which often pay more for the same products or supplies because their volume is much smaller, and they cannot access best-tier pricing based on dollar spend. It’s key to understand the savings your hospital can qualify for and select the GPO with the most benefit for your specific needs.
  3. Analyze your materials management practices to get the most savings from your GPO. This process should include monthly or quarterly reviews to ensure your hospital is receiving previously negotiated prices from suppliers. It’s also helpful to cross reference hospital procurement data with your GPO contract list to identify opportunities for greater savings potential by converting to new products. Involving a multi-functional team of department leaders in this process helps ensure buy in.

To access better tier pricing, CHC has partnered with HealthTrust to introduce a new program designed specifically for community hospitals, CHC Supply Trust. This offering helps smaller hospitals to improve their bottom line with a reduction in supply costs, estimated at 10 percent savings annually. Participants also get support with the onboarding process and optional consulting and analysis services to maximize the benefit received.


We invite you to learn more about CHC Supply Trust.


Tags: Hospital Performance Improvement, Supply Chain, Supply Spending
Supply and Demand: Hospitals Need Supplies, Demand Savings

Supply costs are one of the fastest-growing cost centers for hospitals. These spiraling expenses tend to hit community-based hospitals hard because they don’t wield enough purchasing power to command preferred pricing. But greater strength and savings can be theirs now that CHC has linked our supply chain services with CHC Supply Trust.


CHC Supply Trust offers supply chain solutions tailor-made for community hospitals, including GPO access, regardless of size or annual spend. CHC Supply Trust client hospitals tend to save about 10 percent more than they can with other GPOs on the same products and services. In addition, 100 percent of GPO rebates are returned to hospitals monthly—a huge, helpful departure from the industry standard.


How much can CHC Supply Trust save your hospital? We offer a Complimentary Supply Spend Analysis to calculate how much you could save simply by purchasing your exact same products and services through CHC Supply Trust.


CHC Supply Trust also offers a spectrum of supply chain support, from short-term consulting to full onsite management, including:

  •  Supply chain consulting
  • GPO access
  • Customized support services agreement with GPO access
  • Outsourced materials management with GPO access 

Click for your Complimentary Supply Spend Analysis.


Learn more about CHC Supply Trust’s full spectrum of supply chain savings.


Read how Community Hospital in McCook, Neb., worked with CHC Consulting to achieve an annual savings of 18 percent on supply spend.


Tags: Operational Improvement, Supply Spending

CHC in the Spotlight