Almost 60 percent of U.S. hospital executives said their institutions have had to change their business models if they’re going to survive financially. Conjointly, it is well established that both outsourcing lab services and creating partnerships help reduce costs. While most of TPC Members do outsource their clinical reference lab services, many have contended with how to secure true partnerships that assist them in further reducing spend in this area. By working together through TPC’s Clinical Reference Lab services, Members have realized an improved supplier relationship, and gained both financial success and improved efficiencies.
In order to evaluate the vast array of utilization within clinical reference lab services, TPC began by engaging the Lab Clinical Value Analysis Team (CVAT), consisting of lab directors from each Member facility. After an initial review process, we identified five different suppliers within the membership, and Members recognized the need to consolidate. With the goal of increasing financial value and enhancing service capability, Members sought to select a single-source partner. When the request for proposal (RFP) was issued, TPC established specific requirements, both financial and non-financial (i.e., business terms, turnaround time, quality, etc.), to be met by the RFP participants.
Through a thorough process, the Members evaluated suppliers and selected the partner that was most aligned with the outlined criteria and ultimately provided the most value. The immediate savings equaled $1 million, or 13 percent of spend. By comparison, had the membership accessed the standing GPO agreement, savings would have only amounted to 7 percent. Additionally, through the TPC program, Members benefited from terms that included a waived interface fee, reimbursement of a test dictionary build, penalties for unmet service level guarantees, and firm pricing for the term of the agreement. All in all, by working with our new supplier and the participating Members, TPC was able to dramatically increase the value our Members received within clinical reference lab services. Subsequently, due to Member satisfaction of the program, TPC has negotiated successful contract extensions and realized an additional $500,000 in savings for the Members.
While small and community hospitals often struggle with costs related to lab services, they have the ability to work together like a system to achieve more. Reducing costs to help our Members maintain their independence is the mission of TPC. Through our Clinical Lab Services program, we have been stronger together able to successfully negotiate superior results.
Learn more about TPC’s purchased service offerings and how your independent hospital can benefit by visiting us online today!