Independent Healthcare Systems Working Together
A Case Study in Foodservice
A recent national study about foodservice concluded that pricing of services for smaller, independent hospitals and healthcare systems is as much as 40% higher than large systems and co-ops. And while GPOs have offered some relief in this area, opportunity beyond GPOs was also identified. At TPC, many of us were already leveraging a GPO advantage. But it was time to consider the TPC advantage of working like a system and explore for more opportunity.
As is a theme in supply chain and other purchased services, TPC membership delivered substantial value beyond the GPO. All of our eleven organizations collaborated to create and initiate a TPC request for proposal in the marketplace.
Again, the collaboration of independent healthcare organizations working like a system delivered. TPC created a foodservice distribution and procurement services partnership enabling us to stay nimble in the fluid healthcare market partnering with a best-in-class national purchasing engine delivering:
- $1.45 million savings in year one representing 7.5% of spend
- Protection against inflation through extended contracting terms that includes market index driven price protection
- A dedicated customer operations team helping members:
- Perform consistent auditing of total cost of foodservice operation
- Propose and activate strategies to capture new opportunities
- Deliver comparative analytics, inside our membership and out.
Another critical outcome of our work together was the creation of our foodservice leadership group. Forming this group activated a structured, open, peer-to-peer environment developing operational best practices in foodservice management delivering better tray line operations, improved nutrition, and consistency in employee discounts. As a group, we reconnect at least quarterly to collaborate. As is common in TPC, new relationships developed around sharing common ground and many of us connect regularly outside the quarterly model.
By reaching beyond already-strong GPO contracting, TPC membership enabled a framework for working together in fostering yet another community of excellence across multiple independent healthcare systems, achieving new value, and ensuring a long term model for operational best practices.
RESULTS AT A GLANCE
$1.45 million and 7.5% of spend in savings across 11 members working together like a system
$2.5 million new savings in 2013-14 through active management program