Collaboration Among Hospitals Creates Purchasing Power

Regional Network Reaches $10 Million In Savings In Four Years

Cooperation among 15 community hospitals and Spectrum Health over the past four years has resulted in creating one of the most successful regional purchasing groups in the nation with $10 million in savings and more than $300 million in contracts.

The Spectrum Health Regional Hospital Network works together to combine purchasing power, which reduces the cost of buying medical-surgical, pharmacy and laboratory supplies. The network has over $300 million in contracts with the Novation group purchasing organization.

While Spectrum Health’s seven hospitals are also part of the network, the savings among the other 15 independent hospitals accounts for 80 percent of the $10 million total.

One of the ways the network reached this level of savings is through standardization-having member hospitals agree to use and purchase the same medical products. The 15 independent hospitals and seven Spectrum Health hospitals comply with these standardized contracts 97 percent of the time.
“This level of collaboration among so many independent community hospitals to strengthen purchasing power is remarkable,” said Christina Freese-Decker, executive director, Spectrum Health Regional Hospital Network. “According to VHA Novation, our level of compliance in purchasing standardized products and the total amount of our contracts makes us one of its top regional purchasing groups in the country.”

Novation LLC is the industry’s largest contracting services company formed by VHA and University Health System Consortium, two large hospital associations. Novation serves the purchasing needs of nearly 2,400 VHA and UHC health care organizations.

Formed in the spring of 2003, the Spectrum Health Regional Network strives to preserve community hospital independence and economic strength. The independent community hospitals in the Network include: Central Michigan Community Hospital in Mt. Pleasant; Gerber Memorial Health Services in Fremont; Holland Hospital; Lakeland Regional Medical Center in St. Joseph; Lakeland Community Hospital in Niles; Lakeland Specialty Hospital in Berrien Center; Mary Free Bed Rehabilitation Hospital in Grand Rapids; Mecosta County Medical Center in Big Rapids; Memorial Medical Center of West Michigan in Ludington; North Ottawa Community Health System in Grand Haven; Oaklawn Hospital in Marshall; Pennock Health Services in Hastings; Pine Rest Christian Mental Health Services in Grand Rapids; South Haven Community Hospital and Zeeland Community Hospital.

Spectrum Health is a not-for-profit health system in West Michigan that offers a full continuum of care through its seven hospitals, more than 140 service sites and approximately 500,000-member health plan, Priority Health.  Spectrum Health’s 14,000 employees, 1,500 medical staff members and 2,000 volunteers are committed to delivering the highest quality care to those in medical need.  The organization provided $98.6 million in community benefit during its 2007 fiscal year. Spectrum Health has earned nearly 70 national awards during the past 10 years.