All around the country healthcare organizations are facing declining reimbursements and receivables. In response, these organizations have been challenged with finding innovative ways to cut costs and streamline their processes – even in areas not directly related to patient care. For hospitals, saving on energy costs is an absolute necessity. As all hospitals are unique in design, size and the different specialized services they provide, their cost of energy is variable and subject to market forces such as supply and demand, variation in in prices and taxes, and the form of energy used. However, in recent years, the energy category has evolved into a distinctly regional opportunity aligned to TPC’s strength as a strategic aggregator who can collectively reduce costs while still customizing to the needs to each local healthcare provider. The strategies and economies of scale gained through TPC’s Committed Energy Program have had a massive impact on Member organizations’ bottom lines. Through the combined purchasing strength of six large systems across Texas, TPC’s Members have reduced price risk and improved contract terms to achieve more than $1.4 million in savings annually.
TPC worked within Texas’ deregulated market to benchmark, strategize, and implement cost containment. Success in the energy market is more than a transaction, it requires a strategic approach to make the best decision with the right partner at the right time. In conjunction with an energy market expert, TPC Members identified more than $7 million in savings and cost avoidance over a five-year term, with safeguard assurances such as invoice auditing, data management, and quality controls across all Member enterprises. But what specific strategies guarantee such impressive results?
TPC required several key engagement strategy parameters to drive new cost-saving measures. The purchasing power of the TPC membership not only fostered a competitive bidding process in pricing, but also in the ability to negotiate specific contract terms, including value added services such as dedicated client resources, facility energy audits, demand response programs, and customized web-based utilization dashboards. Additionally, the ability to maintain individual Member pricing to avoid cross-subsidies, to provide transparency in the price of components, and to make valuable recommendations in product selection were integral to customizing the contract developed for TPC Members. Geoff Brenner, president and CEO of TPC, said of the program, “We attribute the success of our Committed Energy Program and its ability to maximize our owners’ savings directly to their high level of commitment. By demonstrating the benefits of a well-organized, committed group purchase, TPC Members will save millions.”
When considering energy-saving measures for hospitals, it must be stressed that consumption and the need to control the utilization of energy are principal requirements. In a broad sense, TPC Member organizations have demonstrated the leadership to procure energy collectively, continuously monitor energy use indices, and seek new innovative ways to further decrease energy consumption. This includes the operation and maintenance of the buildings in a way that sustains the energy efficiency gains achieved through Energy Star certifications. Our collective work to lower energy costs is never complete, but ongoing.
Working to create a network of healthcare providers that share a vision and maintain their independence isn’t just about values and focus. It’s about the concrete savings, leveraging of economies of scale, in supply chain and purchased services initiatives, and a system-like commitment from each Member organization. The results are impressive – in energy and beyond.
Stronger Together. Superior Results. Learn more today by visiting: http://www.tpc1.com/purchased-services/