Banner Health Saves $41.5M in One Year by Reducing Supply Chain Expenses, Improving Care

Banner Health saved $41.5 million in one year partnering with the Premier healthcare alliance to reduce supply chain costs, eliminate clinical variations and improve the overall quality of care delivery.

As a Premier owner, the health system continuously works on wide-ranging initiatives to reduce expenses associated with supplies and other consumables while improving care quality. Annually, executives from Banner and Premier plot the year’s activities and goals for the health system. Employees from both organizations then work to negotiate supply contracts, standardize utilization and improve quality.

Banner’s achievements last year include savings of:

• $1.6 million in reducing use of adhesion barrier products in cesarean sections, with no ill effect on patients or babies;
• $3 million by addressing utilization variances in the OR;
• More than $9 million in standardized supply contracts in pharmacy, cardiology and the cath lab; and
• An estimated $600,000 by linking their affiliates to Premier’s continuum of care contracts.

“Generating this level of supply chain savings is not possible by either Banner or Premier alone. It is definitely the result of a terrific team effort between dedicated employees of both organizations,” said Banner’s Vice President of Supply Chain Management Doug Bowen. “We’re proud of our partnership with Premier and of the results we continue to achieve.”

Banner has developed an impressive process to evaluate resource use and standardize care practices, particularly in high-volume populations. With clinical consensus groups led by physicians and nursing leaders, clinical practice guidelines are adopted across the health system.

Dr. John Hensing, Banner’s executive vice president and chief medical officer, said, “I cannot overstate the value of the Premier solutions, people, processes and data. They are supporting our ongoing commitment to learn how to leverage innovative technologies, implement innovative techniques and adopt standardized care models across our health system. It’s all about how we can best deliver the safest and most effective clinical outcomes across the organization and do it rapidly and consistently.”

“During our 11-year partnership with Banner, we’ve seen them achieve a tremendous amount of success. But regardless of the advancements they make, they keep pushing to be better. Everything Banner does is based on a focus of continuous improvements in delivering effective, consistent, high-quality care throughout its communities,” said Susan DeVore, Premier president and CEO.

Banner is also the recipient of 2012 Richard A. Norling Premier Alliance Excellence Award for its leadership and collaboration with the alliance to provide high-quality, efficient care.

Banner participates in a number of Premier initiatives to improve care, such as collaborating with more than 290 hospitals in QUEST^® and nearly 80 health systems in PACT™ (Partnership for Care Transformation).

Banner also accesses and integrates its clinical and supply chain data to identify quality improvement, and savings and waste reducing opportunities using Premier performance improvement solutions, including:

• SpendAdvisor^® MySpend™, which analyzes supply spend to compare it with like organizations and find savings opportunities;
• QualityAdvisor^™, which integrates patient-level quality, safety and financial data to help hospitals make better decisions in care delivery for reductions in harm, mortality and readmissions, and improved resource utilization;
• SafetySurveillor^®, an automated surveillance application that helps prevent healthcare-associated infections and optimize antibiotic use; and
• OperationsAdvisor^®, which monitors labor productivity through assessments and comparative data that measure performance against peers and national benchmarks.

About Banner Health

Phoenix-based Banner Health is one of the largest, nonprofit healthcare systems in the country. The system owns or manages 23 acute care hospitals, long-term care centers, outpatient surgery centers and an array of other services located in seven states: Alaska, Arizona, California, Colorado, Nebraska, Nevada and Wyoming. www.bannerhealth.com.

About the Premier healthcare alliance, Malcolm Baldrige National Quality Award recipient

Premier is a performance improvement alliance of more than 2,500 U.S. hospitals and 81,000-plus other healthcare sites using the power of collaboration to lead the transformation to high quality, cost-effective care. Owned by hospitals, health systems and other providers, Premier maintains the nation's most comprehensive repository of clinical, financial and outcomes information and operates a leading healthcare purchasing network. A world leader in helping deliver measurable improvements in care, Premier has worked with the Centers for Medicare & Medicaid Services and the United Kingdom's National Health Service North West to improve hospital performance. Headquartered in Charlotte, N.C., Premier also has an office in Washington. https://premierinc.com. Stay connected with Premier on Facebook, Twitter and YouTube.