LOUISVILLE, Ky. (Jan. 27, 2014) — Baptist Health and Norton Healthcare have joined to form a joint purchasing arrangement for the acquisition and distribution of medical and surgical supplies, implants and devices for the two health systems. Medline Industries, Inc., a global medical supply company based in Mundelein, Ill., was awarded the contract following a request for proposal solicited from each of the hospital system’s incumbent distributors.
The two hospital systems entered into the joint purchasing agreement in an effort to reduce expenditures for medical supplies through efficiencies realized, and economies of scale created, by the joint arrangement. “Increasingly, we are seeing partnerships like this among health care providers all across the country,” said Michael K. Reeves, system executive, Supply Chain Services, Baptist Health. “The Affordable Care Act, health care reform overall and the constant pressure on health systems to do more with less without sacrificing quality have all resulted in providers being more creative to contain costs.”
“While we continue to maintain totally separate health service operations, we both also recognize the tremendous opportunity to reduce our respective expenses for supplies through this purchasing agreement,” said Jim Graham, system director, Purchasing, Norton Healthcare. “Ultimately, the communities we serve and the patients we treat will benefit from lower costs while we maintain our traditional focus on service, safety and quality.”
Early estimates of combined savings for the systems through this relationship with Medline are projected to exceed $15 million over the life of the five-year contract, according to their respective purchasing projections. The total combined spend for both organizations for items and services covered under the joint purchasing agreement is approximately $85 million annually.
Medline will be the primary provider of medical/surgical supply distribution services for both health care systems.