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Modern Healthcare - - REGIONAL NEWS -

CLEVE­LAND—

The Cleve­land Clinic is the lat­est hospi­tal sys­tem to form a joint ven­ture that aims to ad­dress the ris­ing costs of hip and knee im­plants, stents and other pricey physi­cian pref­er­ence items. The Cleve­land Clinic pre­vi­ously han­dled pur­chas­ing of physi­cian pref­er­ence items in­ter­nally and con­tracted with Pre­mier health­care al­liance on other sup­plies. The sys­tem is mov­ing its con­tract­ing to No­va­tion, VHA’s group pur­chas­ing or­ga­ni­za­tion. Un­der the di­rec­tion of Dr. De­los Cos­grove, the Clinic’s pres­i­dent and CEO, the 11-hospi­tal sys­tem has re­duced sup­ply-chain costs by $155 mil­lion in the past three years, said Bill Donato, ex­ec­u­tive di­rec­tor of the Cleve­land Clinic’s sup­ply-chain di­vi­sion. How­ever, he added that there is still a need to fur­ther re­duce costs and make the sup­ply chain more ef­fi­cient. “I think ev­ery­one would rec­og­nize the health­care sup­ply chain is bro­ken,” he said. The sys­tem spends about $1.6 bil­lion a year on sup­plies and ser­vices, in­clud­ing $180 mil­lion on im­planta­bles. The Clinic owns 60% of the joint ven­ture, Donato said, and while the sys­tem is the ven­ture’s “No. 1 client,” there are plans to bring in other VHA mem­bers, Cleve­land Clinic af­fil­i­ates and oth­ers. A Pre­mier spokesman said in an e-mail that the al­liance con­tin­ues to col­lab­o­rate with “a very large hospi­tal mem­ber­ship in the Ohio re­gion. ...In­creas­ingly, how­ever, our strate­gies have di­verged with those of the Cleve­land Clinic.”

—Jaimy Lee

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