Allina Health is a nonprofit integrated delivery network with 11 hospitals, 90 clinics, 15 pharmacies, three ambulatory care centers and other services. One of Minnesota’s largest health care organizations, Allina Health maintains 1,797 beds, staffed by a team of 5,000 associated and employed physicians, 24,161 employees and 2,500 volunteers.
For Allina Health, expanding its hospital and clinic network meant caring for more people in Minnesota—which meant increasing demands on the centralized supply chain function. Manually updating master supply data was impractical and costly. But without that information, supply chain staff had no idea how their pricing compared with the rest of the market.
Vizient™ business intelligence tools help members easily obtain accurate supply chain data and use it for price analyses and negotiations with suppliers. For Allina Health, Vizient DataLYNX™ and Vizient PriceLYNX™ offered the best way to maintain data integrity and perform price comparisons.
Ensuring data accuracy with Vizient DataLYNX
“Vizient DataLYNX keeps the item master data clean, so we know the manufacturer numbers and UNSPSC codes are correct,” said DeEtt Rayman, Allina’s manager of supply chain management. “It helps to make sure the purchase order is correct, gets to the vendor in a timely fashion and that we get the product in time for the patient.”
According to Rayman, the supply chain team maintained a Microsoft Access database prior to implementing Vizient DataLYNX. The team had to select top vendors from the system and ask each vendor to verify part numbers and units measured. “Some of those actually got pushed back,” said Steve Flaten, product support team member and senior analyst on Allina’s supply chain management team. “Vendors thought we were going to a competitor. So we had to reassure them that we just wanted to make sure our data is correct and clean.”
Benchmarking prices with Vizient PriceLYNX
Vizient PriceLYNX’s benchmarking data is invaluable, according to Allina’s vice president of supply chain. “It enables our sourcing staff to know where we stand compared to others on various categories or in our overall price points,” she said. “Vizient PriceLYNX also provides me with a way to show our executives how we fare compared to others.”
Allina’s supply chain staff use Vizient PriceLYNX to forecast work in the year ahead and negotiate project targets. They analyze expiring contracts in the areas where they spend most and identify additional opportunities for better pricing. “We use Vizient PriceLYNX to look at where we sit in comparison to other hospitals in the country, and we consider our relationship with that supplier and that group of products,” said Ginny Borncamp, Allina’s director of purchasing and strategic sourcing. “If we have a big spend and a big market share with the supplier in a product category, we expect to see that we have really competitive pricing.”
The Allina supply chain team also pulls utilization data from the organization’s electronic medical record system and analyzes usage by hospital, procedure and surgeon. This kind of objective data helps educate physicians, nurses and others. “The supplier may have told them they had really good pricing,” said Borncamp. “Sometimes our analysis validates that and sometimes it doesn’t. It really helps to have something tangible to review with the doctors or nurses with whom we are working on a particular initiative.”
Allina supply chain staff see the value of Vizient business intelligence solutions every day. In addition to higher productivity and accuracy, staff consistently reduce costs that directly flow to the bottom line.
“Vizient DataLYNX has changed the way we do business,” said Flaten. “Vizient walked me through the process, sent me user guides and showed me how to maximize its use. It’s a great resource and the customer support is excellent.”
“Every year we set a savings goal,” said Borncamp. “With Vizient PriceLYNX and Vizient DataLYNX, we can validate our savings target. We usually try to deliver at least $10 million of new net savings per year and Vizient PriceLYNX has helped us do that.”