The five member health systems of the Catholic Contracting Group (CCG) within Premier Purchasing Partners realized savings of more than $70 million in 2006, driving improved operating margins across the group. Compared to competitor Catholic GPO members, Premier’s CCG members experienced consistently higher operating margins; nearly 3 percent versus other Catholics’ operating margins of less than 2 percent.
“This program is not just about attaining incremental economic benefit, although this is very important,” said Ron Brady, vice president, materiel management, Bon Secours Health System, Inc., Marriottsville, Md.
“As Catholic-based ministries, we share a common vision to reach out and into the communities we serve with a holistic approach to care and meeting needs,” he said. The Catholic Contracting Group within Premier allows us to realize other important strategic supply chain priorities such as creating contracting portfolios that are both environmentally responsible and appropriately diverse.”
The Catholic Contracting Group was formed in August 2005 to combine the collective strength of the Catholic members of Premier Purchasing Partners to identify and implement additional supply chain savings.
CCG consistently performs at better supply chain ratios than industry statistics. CCG member Catholic Healthcare West, for example, has improved its supply chain expense as a percent of total operating expense from 16.47 percent in 1999 to 14.88 percent in 2006. That compares to Moody’s survey averages of 18.25 percent and Healthcare Financial Management Association (HFMA) averages of 21.7 percent.
Members are Bon Secours Health System; Catholic Healthcare Partners of Cincinnati; Catholic Healthcare West of San Francisco; PeaceHealth of Bellevue, Wash.; and SSM Health Care of St. Louis. The non-profit healthcare organizations represent about 110 acute care hospitals with 18,500 staffed patient beds.
About Premier, 2006 Malcolm Baldrige National Quality Award recipient
Serving 1,700 hospitals and more than 43,000 other healthcare sites, Premier Inc. is the largest healthcare alliance in the United States dedicated to improving patient outcomes while safely reducing the cost of care. Owned by not-for-profit hospitals, Premier operates the nation’s largest healthcare purchasing network, the most comprehensive repository of hospital clinical and financial information and one of the largest policy-holder owned, hospital professional liability risk-retention groups in healthcare. Headquartered in San Diego, Premier has offices in Charlotte, N.C. and Washington. For more information, visit www.premierinc.com.
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