Texas Health Network Reduces Procurement Burden

Baylor Scott & White Health, Texas’s largest not-for-profit health care system, was looking to reduce the costs it was incurring through its purchasing operations, hoping to make its procurement process more affordable. So it decided to change eCommerce providers.

The network, formed from the 2013 merger between Baylor Health Care System and Scott & White Healthcare, has total assets of $8.6 billion and serves a geographic area larger than the state of Maine. It includes 46 hospitals, more than 500 patient care sites, more than 6,000 active physicians, 36,000 employees and its own health plan.

In essence, it has a lot of procurement needs. To help reduce its costs associated with equipment buying and other purchasing, Baylor Scott & White switched eCommerce providers, choosing the MedAssets eCommerce Exchange, an integral component of MedAssets’ Procure-to-Pay service.

Some 950 healthcare providers and more than 400 suppliers use the Alpharetta, Ga.-based vendor’s Exchange platform. The company processes more than $2.4 billion in spend annually on behalf of its clients, which comprise more than 10.5 million electronic documents per year, including1.8 million purchase orders.

Under the agreement, announced Monday (Sept. 8), the network will  implement two of MedAssets systems: the eCommerce Exchange, which is a proprietary platform designed to automate purchasing operations, and Transaction Management Services, which is designed to resolve root causes of pricing mismatches between transacting parties while providing increased visibility to the organization’s supply expenditures.

“Investing in more affordable procurement technologies will enable us to further reallocate staff and resources to mission critical functions, which is a key focus for Baylor Scott & White Health,” Pam Bryant, Baylor Scott & White senior vice president of supply chain services, said in a statement.

The agreement comes as MedAssets has made its own internal changes to help create more choice and affordability to its products. The company says it has made a significant investment in infrastructure to expand the availability of its proprietary eCommerce Exchange platform to any provider regardless of their group purchasing organization affiliation, while protecting the security and confidentiality of the providers’ transaction data.

Moreover, the exchange, when combined with Transaction Management Services, can now enable any provider to automate up to 100 percent of purchase-order transactions with any supplier, regardless of its size or technical ability. It can do so through its National Procurement Center, which helps providers by automating purchasing transactions via “virtual EDI,” or electronic data interchange, for suppliers otherwise unable to use traditional EDI solutions.

Other companies using MedAssets’ Procure-to-Pay service include Beaufort (S.C.) Memorial Hospital; Integrated Healthcare Holdings Inc. in Santa Ana, Calif.; Meadows Regional Medical Center in Vidalia, Ga.; University Health System in San Antonio; and Wise Regional Health System in Decatur, Texas.

“MedAssets has a vested interest in operational excellence, both for providers and suppliers,” David Klumpe, MedAssets senior vice president for supply chain services, said in the agreement announcement. “Our Procure-to-Pay [services] combine automation and analytics to increase efficient processing of purchase orders, reduce processing costs and increase use of standardized policies and procedures–all contributing to greater cost saving opportunities.”

By providing a central connection platform for providers and suppliers, both parties can streamline communications and improve financial and operational efficiency during the procurement process, he said.

MedAssets introduced its Procure-to-Pay service in June 2013 at the HFMA National Institute in Orlando. Its goal was to take its supply-chain expertise and enhance the management and oversight of contract compliance, standardization and pricing accuracy for its customers.

“With all the financial pressures faced by healthcare organizations, the focus to optimize supply chain ‘back office’ processes must be embraced by the C-suite to improve cost reduction and efficiency,” Klumpe said at the time. “By taking a holistic approach to automating processes that were manual or fragmented, providers are able to achieve significant savings on non-labor spend not only from accessing the right contracts, but paying the right prices–an important concept for purchased services spending as well as traditional consumable purchases.”