ROi De­liv­ers A Provider-Owned GPO Strat­egy

Five Things to Know

Modern Healthcare - - THE WEEK AHEAD -

GREG FIRE­STONE VICE PRES­I­DENT, STRATE­GIC CUS­TOMER RE­LA­TIONS, ROi (Re­source Op­ti­miza­tion & In­no­va­tion)

ROi is a ver­ti­cally in­te­grated ac­count­able sup­ply chain or­ga­ni­za­tion that of­fers a com­pre­hen­sive and vi­able al­ter­na­tive to tra­di­tional group pur­chas­ing or­ga­ni­za­tions (GPOs). We fo­cus on all as­pects of the health­care sup­ply chain, from plan­ning through ful­fill­ment, to en­sure our cus­tomers de­liver the high­est qual­ity of care in the most cost- ef­fec­tive man­ner. We be­lieve in the power of provider col­lab­o­ra­tion, achieved through cus­tomer part­ner­ships fo­cused on stream­lin­ing and/or con­trol­ling crit­i­cal sup­ply chain com­po­nents in health­care.


GF: Fif­teen years ago, ROi was founded as the sup­ply chain or­ga­ni­za­tion for Mercy—a Tru­ven Top 5 Large Health Sys­tem that owns and/or op­er­ates 43 acute care and spe­cialty hos­pi­tals and more than 700 physi­cian prac­tices and out­pa­tient fa­cil­i­ties across Arkansas, Kansas, Mis­souri, and Ok­la­homa. Mercy tasked ROi to rad­i­cally re­think sup­ply chain op­er­a­tions, ac­knowl­edg­ing that con­ven­tional busi­ness prac­tices were not pro­duc­ing ex­pected and re­quired re­sults. ROi de­vel­oped an in­no­va­tive and trans­for­ma­tional model that aligns sup­ply chain ser­vices and group pur­chas­ing or­ga­ni­za­tion (GPO) func­tions across the con­tin­uum of care, bring­ing to­gether all rel­e­vant stake­hold­ers. This model places the pa­tient at the cen­ter while si­mul­ta­ne­ously rec­og­niz­ing the need to en­gage physi­cians and in­te­grate sys­tems. This rad­i­cal ap­proach has de­liv­ered more than $1bil­lion in savings to Mercy since 2002. In 2011, ROi and Mercy de­cided to com­mer­cial­ize the sup­ply chain and GPO of­fer­ings.


GF: ROi has suc­cess­fully grown from a sup­ply chain depart­ment serv­ing one health sys­tem into a cost man­age­ment and sup­ply chain solutions provider that sup­ports mul­ti­ple health­care sys­tems across the United States. We pro­vide a va­ri­ety of ser­vices, in­clud­ing:

strate­gic con­tract­ing and sourc­ing/GPO ser­vices;

man­u­fac­tur­ing and pack­ag­ing op­er­a­tions, in­clud­ing phar­ma­ceu­ti­cal repack­ag­ing, cus­tom pro­ce­dure trays and IV Com­pound­ing;

in-hos­pi­tal sup­ply chain man­age­ment;

self-dis­tri­bu­tion and trans­porta­tion op­er­a­tions, such as con­sol­i­dated ser­vice cen­ter de­sign and man­age­ment, if de­sired by cus­tomers; and,

knowl­edge trans­fer solutions, pro­vid­ing op­er­a­tional di­rec­tion on the above four ar­eas and clin­i­cal in­te­gra­tion strat­egy.

Be­cause ROi has a fo­cus that ex­tends well be­yond con­tract­ing, we look to share our ex­pe­ri­ences and suc­cesses with fel­low providers, mak­ing us dif­fer­ent from other GPOs. We be­lieve it’s crit­i­cally im­por­tant that providers con­trol their sup­ply chain des­tiny and not out­source crit­i­cal com­po­nents.

WHAT MAKES ROI STAND APART FROM NA­TIONAL GPOS? GF: Five key ar­eas dif­fer­en­ti­ate ROi in the mar­ket­place:

1. WE HAVE A PROVIDER-OWNED, OP­ER­A­TOR VAN­TAGE POINT: We de­liver much more than a tra­di­tional GPO model. Draw­ing from our daily sup­ply chain op­er­a­tor ex­pe­ri­ence – man­ag­ing end-to-end sup­ply chain ac­tiv­i­ties (in­clud­ing self-dis­tri­bu­tion and lo­gis­tics) for both acute and nona­cute care for Mercy – we work with our fel­low provider cus­tomers to lever­age best prac­tices in sourc­ing, con­tract­ing, stan­dard­iza­tion, uti­liza­tion and sup­ply chain man­age­ment.

2. WE PRO­VIDE A VER­TI­CALLY IN­TE­GRATED SER­VICE OF­FER­ING: We lever­age our self-man­u­fac­tur­ing ca­pa­bil­i­ties to pro­vide cus­tomers with ad­di­tional savings through cus­tom pro­ce­dure trays, pri­vate-la­bel prod­ucts and IV Com­pound­ing solutions. ROi sources both branded prod­ucts and our own brand of pri­vate-la­bel prod­ucts, known as Re­gard®, which pro­vide lower-cost prod­uct al­ter­na­tives with­out com­pro­mis­ing clin­i­cal value and ef­fi­cacy.

3. WE HAVE EX­PE­RI­ENCE WITH A CLIN­I­CALLY IN­TE­GRATED SUP­PLY CHAIN: We have built ex­per­tise by in­te­grat­ing physi­cians and clin­i­cians within our Ser­vice Line Con­tract­ing mod­els that pro­vide an ev­i­dence-based de­ci­sion mak­ing process for the se­lec­tion and uti­liza­tion of prod­ucts and ser­vices, with spe­cial em­pha­sis on Physi­cian Pref­er­ence Items and Pur­chased Ser­vices cat­e­gories. Our clin­i­cal apps and ad­vanced an­a­lyt­ics of­fer our cus­tomers valu­able de­tail and in­tel­li­gence into cost per case and other clin­i­cal met­rics re­quired to achieve a clin­i­cally in­te­grated sup­ply chain.

4. WE PRO­VIDE GUAR­AN­TEED SUS­TAIN­ABLE COST SAVINGS: We em­ploy a com­mit­ted con­tract­ing strat­egy that de­liv­ers highly com­pet­i­tive pric­ing and broad con­tract cov­er­age, uti­liz­ing our pro­pri­etary bench­mark­ing model. Our model pro­vides long-term sus­tain­able savings mea­sured by the re­duc­tion in Sup­ply Ex­pense per Ad­justed Dis­charge (CMI) and sup­ply chain ex­pense as a per­cent­age of net op­er­at­ing rev­enue.

5. WE DO NOT CHARGE AD­DI­TIONAL FEES FOR SER­VICE: We of­fer a com­pletely trans­par­ent pric­ing model pro­vid­ing full ac­cess to an ex­ten­sive, à la carte menu of ser­vices with no hid­den charges, and no ser­vice or mem­ber­ship fees to ac­cess our com­pre­hen­sive con­tract port­fo­lio or any other ser­vice of­fer­ing.

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