Often overlooked because they fall outside traditional supply chain responsibility, Purchased Services categories account for roughly 40% of TPC’s Members’ total spend, and represent a potentially untapped source of savings for our Member organizations. Through TPC’s comprehensive Purchased Services strategy, Member-led initiatives have achieved over $35 million in total savings in a variety of targeted areas. One such program helping decrease Member overhead is TPC’s Capital Equipment Services, which provides aggregation opportunities through an unprecedented real-time view of capital budgets across multiple health systems.
Considered a commodity, capital equipment is most commonly purchased from the supplier offering the best value. At the direction of our Member-led organizations’ CFOs and CEOs, TPC analyzed over $100 million in annual capital expenditures across our database, and discovered that a majority of TPC Members purchased their equipment from the same suppliers. Through TPC’s insight into the capital requirements of all our Member organizations, we recognized a major aggregation opportunity for a standardized capital budgeting and requisition platform. By leveraging large volume purchasing, TPC has the ability to negotiate pricing below traditional benchmarking services on independent capital purchases.
TPC’s capital strategy is a multi-faceted approach that includes standardized capital equipment budgeting and procurement technology, and strategic negotiations with manufacturers through a third party with industry-leading knowledge of equipment pricing. Through the TPC program, Members have been provided an expanded supplier market which presents competition in the capital space inclusive of viable alternatives for equipment needs, and access to Tier 2 and 3 suppliers. The ultimate result is nearly $3 million in realized savings in the two years since the program’s inception. This total includes key savings of $83,000 in mammography equipment, $250,000 on scopes and $270,000 on HIM systems. In addition, TPC Members have also benefited from process improvements such as saving as much as six days off their budgeting process by using the automation and structure of the technology platform.
With a dedicated and strategic focus, hospitals have the opportunity to capture a significant increase in the value they receive from their Purchased Services contracts. This results in additional savings opportunities with lower overall costs, as well as improved services, terms, conditions, and processes. Partnering with TPC provides access to resources and expertise that can greatly improve success in Purchased Services and allow community-based hospitals to achieve large-system value while maintaining their independence.
For more information about TPC's Purchased Services programs, visit here!