For the second time this year, Baptist Health and Norton Healthcare have formed a joint purchasing arrangement for the acquisition and distribution of supplies.
The two health systems awarded a contract to Cardinal Health of Dublin, Ohio, for pharmaceutical distribution services. Three other companies, including each health system’s incumbent distributor, had submitted bids. The five-year contract takes effect on September 3 for Norton Healthcare and December 1 for Baptist Health.
The agreement with Cardinal Health is similar to one Baptist and Norton reached in January with Medline Industries Inc., of Mundelein, Ill., for medical and surgical supplies, implants and devices. The agreements are intended to increase efficiency and flexibility for both health systems.
Although the parties to the agreement have declined to disclose the total value of the contract, the two hospital systems said that, compared to their current contracts, they expect a combined savings of more than $15 million over the life of the five-year contract with Cardinal Health.
“It’s a new day in healthcare,” said Michael K. Reeves, system executive of Supply Chain Services for Baptist Health. “Providers are under intense pressure to hold down costs because of the Affordable Care Act and other reforms, and doing business the way we’ve always done it simply won’t do. Partnerships like these provide economies of scale and allow us to be more efficient in our delivery of quality care.”
”This is the future of healthcare in this country,” said Paul Allen, associate vice president, Pharmacy Administration, Norton Healthcare. “We’ve gone beyond thinking outside of the box. Arrangements like this are proof that there is no box when it comes to discovering creative ways of reducing the cost of care while maintaining patient safety and quality standards.”
“We’re pleased to serve the pharmaceutical distribution needs of Baptist Health and Norton Healthcare,” said Jon Giacomin, president of Cardinal Health’s U.S. Pharmaceutical Distribution business. “We’re looking forward to working with both health systems to improve the cost-effectiveness of the health care services they deliver to patients.”