How two health systems found significant purchased services savings with Valify

Andy Motz

Hospitals and health systems often struggle with supplier management and lack visibility into their purchased services spend, which leads to inefficiencies and increased costs. Valify—a strategic partner of HealthTrust—and the team supporting it offer proven methods to help change all that. “Valify helps hospitals and health systems quickly and easily understand their data and where accounts payable (AP) spend is going,” explains Andy Motz, VP, Advisory Services and Custom Contracting, Valify Solutions Group.

The team recently helped Ardent Health Services and Community Hospital Corporation (CHC) find opportunities that have generated tangible financial benefits.

How it works

Valify collects AP spend and sorts it into 1,400 different categories. “This enables you to see when you have multiple suppliers providing the same services within your hospital,” Motz explains. “It presents opportunities for standardization of suppliers and also shows you high-level benchmarks comparing your spend in the category to other users of Valify.”

Cairo Wasfy

For a 30-hospital system like Ardent Health Services, assessing category spend systemwide is challenging. “We’re spread out across six states,” says Cairo Wasfy, Chief Resource Officer at Ardent Health Services. “Hospitals are far from each other, even within the same market.”

One issue that revealed itself when Ardent began to use the Valify tool was the lack of standardization across the IDN’s biomed purchased services. HealthTrust found that getting a handle on this member’s biomed spend through standardization could result in significant savings. “At Ardent, we spend about a billion dollars on purchased services. If we save 10%, that’s a hundred million dollars in cost reduction,” Wasfy says.

Identifying the inconsistencies

By using Valify, Ardent saw the cost variation among its hospitals and benchmarked its facilities against others nationwide. The tool also allowed Ardent to benchmark within its system, explains Wasfy. “That’s significant because you start to see a lot of variations in costs among your facilities that are the same size.”

The Valify tool allowed Ardent to pinpoint places to make changes. To take the next step, Ardent turned to the Valify Solutions Group. “I think sometimes people look at Valify as only a tool for benchmarking,” says Wasfy. “It’s not just a benchmarking tool; it’s truly the team behind it that helped us save even more money.”

Valify Solutions Group helped Wasfy and his team make sense of its data, examined what others like Ardent were doing and determined which of those best practices could be used at Ardent’s facilities. The group even connected Ardent’s team with peers to get a further understanding of what worked or didn’t work for them.

“It’s a tremendous undertaking,” Wasfy shares. “But in my opinion, if we didn’t have the tool, it would be an extremely difficult process to collect the data and to try and benchmark it.”

Making informed decisions

Jon Pruitt

CHC, an organization that supports 142 hospitals nationwide, was an “early adopter” of the Valify tool. “We wanted to have the cutting-edge technology to gain visibility into spend and purchased services,” says Jon Pruitt, CHC’s SVP, Supply Chain. The Valify tool allows CHC to deliver significant results for its hospitals.

When Lane Regional Medical Center in Zachary, Louisiana, joined the CHC network, CHC used the Valify tool to identify multiple opportunities to minimize spend. One of those opportunities was to find the medical center a new elevator contractor. The medical center had used the same contractor for more than 40 years, and the contract was on auto-renew.

Valify identified three HealthTrust-contracted suppliers, and CHC put an RFP out to bid. “We went to bid thinking we were going to see double-digit percent savings,” says Pruitt. “We were surprised and happy to deliver Lane Regional an estimated 48% savings opportunity.”

When LA Downtown Medical Center asked CHC to help it find savings for its laundry and linen spend, CHC used Valify to understand its business. “They had different types of entities: an acute care hospital, a behavioral hospital and a small critical access hospital—and they all had different needs,” says Pruitt.

CHC used Valify to benchmark, which informed them what kind of laundry and linen contracts were needed to meet the varying needs of LA Downtown’s facilities. The process resulted in contracts awarded to two different suppliers and a savings of more than 10%.

“As a result of that success,” Pruitt says, “we were gained the trust to go after other categories for CHC. With Valify, we delivered significant savings and results.”

For more information, contact your HealthTrust Account Manager or visit Valify.

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