Report: Hospital coalitions are being formed to lower costs, improve patient care

In today's ever-changing hospital industry, organizations are forming coalitions in order to lower costs and improve patient care, according to a recent Harvard Business Review report.

The report examined Irving, Texas-based VHA's Upper Midwest Consolidated Services Center, a supply network of VHA Upper Midwest member organizations, as an example.

The 42-member purchasing coalition, which includes Rochester, Minn.-based Mayo Clinic, Chicago-based Swedish Covenant Hospital and Sioux Falls, S.D.-based Sanford Health, has consolidated the purchase of about $2 billion in medical devices, supplies, and pharmaceuticals annually, leading to 15 percent to 20 percent in savings on contracted items year over year, according to the report.

The report also gives the example of AllSpire Health Partners, a clinical quality alliance of 25 hospitals from seven Northeast health systems.

The alliance, formed in 2013 to address healthcare quality, best practices, population health management and medical research, shares clinical practices, intellectual assets and economic capabilities, according to the report.

Additionally, there are alliances that center around improving payer negotiations or "standardizing shared electronic medical records platforms," according to the report.

"It’s encouraging to see the creative collaboration hospitals are undertaking to reduce costs and improve outcomes," the report reads. "While collaboration is always challenging, the health care benefits are by now clear. Hospitals that continue to operate in isolation, sharing neither buying power nor best practices and expertise, will find it increasingly difficult to compete with those that do."

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