Network buying power helps patients

Regional contracts, creativity, save money and support quality

Over the past five years, The University of Vermont Health Network has saved about $40 million in cost avoidance and cost savings by negotiating network-wide contracts. In addition, says Charlie Miceli, vice president and network chief of Supply Chain, increased involvement of our physicians and nurses in our efforts to be innovative has greatly contributed to our success.

A great example of this is how we are working in new ways to purchase cardiac rhythm management (CRM) devices, such as pacemakers and defibrillators.

In February 2016, UVM Health Network sought proposals from four CRM device suppliers to establish network-wide pricing contracts. The goals were to reduce costs, maintain the highest standards for product quality, preserve physician choice in product selection, and provide physicians with information on the comparative effectiveness of those products.

What’s been eye-opening about this effort is how much further we can drive down costs while driving high quality.

Georgiana D’Alessandro, senior contract specialist, UVM Medical Center

We now contract with all four of these suppliers to encourage competition, resulting in reductions in product costs between 6 percent and 13 percent.

Between February and April of 2016, the UVM Medical Center piloted a physician phone application with our cardiac electrophysiologists to compare relative costs of devices and device features.

“Using a handheld, portable device, we can obtain up-to-date information on the specific features unique to the CRM products we are choosing to implant,” said Bob Lobel, MD, a UVM Medical Center electrophysiologist and assistant professor of Medicine at the Larner College of Medicine.

“By having the ability to simultaneously consider functionality, size and cost across the spectrum of vendors, we can make better-informed decisions about the appropriate device for a specific patient need. Ultimately, this will translate to major cost savings and improved use of high-end technology where it is crucial to patient care and outcomes.”

Because this application was so successful, it was also rolled out at UVM Health Network partners Champlain Valley Physicians Hospital in Plattsburgh, New York and Central Vermont Medical Center in Berlin.

As a result of this cost management initiative, UVM Medical Center was on track to save roughly $1 million in the fiscal year ending Sept. 30, 2016; Champlain Valley Physicians Hospital is projected to save over $600,000 and Central Vermont Medical Center about $15,000.

“We have robust tools to assess market competitiveness, which has allowed us to aggressively negotiate our costs,” said Georgiana D’Alessandro, senior contract specialist for UVM Medical Center. “What’s been eye-opening about this effort is how much further we can drive down costs while driving high quality.”

See this press release for more information on why our supply chain team is nationally ranked.