MIDWEST

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