After Vizient’s acquisition of MedAssets’ SCM and Sg2 segments in February, the company’s leaders immediately set about their mission of bringing the organizations together. Among their most challenging tasks: combine two of the industry’s largest contract portfolios – representing 3,700 contracts with more than 1,300 suppliers – in a way that delivers market-leading value to its 3,100 health system members in 12 to 18 months.
Keeping members first
“Members are central to all that we do,” said Pete Allen, executive vice president, sourcing operations, “so, naturally, we based our plan for bringing our portfolios together on priorities that supported their best interests. Throughout this process, our contracting teams have consistently focused on maintaining continuity of coverage, delivering market-leading value and providing speed to value.”
Ensuring members have no interruption of contract coverage is Vizient’s top priority – no members will lose access to the contracts they’ve relied on through their legacy contract portfolios. In terms of value, Vizient’s increased purchasing volume, unmatched data assets and expanded capabilities have enhanced its position in the marketplace, and Vizient is leveraging its status to pursue value beyond what either legacy organization could have achieved on its own. "We have set clear expectations with suppliers,” added Allen. “We have no interest in simply taking the best price from two legacy contracts. We are challenging suppliers to deliver additional value – including sustained, market-leading pricing – for all members.”
Because we understand that members want value quickly, Vizient contracting teams have been singularly focused on integrating the portfolios for the past nine months. During that time, we have initiated the integration of approximately 2,000 contracts and distilled more than 750 legacy contracts into just over 400 Vizient agreements, which are being rolled out to members as those agreements are signed.
What members can expect
Every member can expect to receive value through the integration process. Examples of price savings achieved for the membership in aggregate include $53.8 million in pharmacy savings from Fresenius Kabi; $3.7 million in business services savings from FedEx; $36.5 million in savings from GE in capital and imaging; $15.1 million from Covidien and $10 million from Standard Textile in savings on medical and surgical products.
“We’ve also achieved value through unexpected circumstances,” Allen said. “When we appealed to a leading pharmacy supplier for additional value, they submitted a 350 percent increase on the pricing of a common drug used to treat bacterial infections. This would have negatively impacted our members by $57.6 million, so we put all NOVAPLUS® products currently awarded to that supplier up for competitive bid. This not only avoided the price increase, but yielded $16.8 million in additional value for members.”
Funneling value to members
The process of taking a contract from the negotiation phase to making it available to members does not happen overnight. Once a contract is negotiated, the existing legacy Novation and legacy MedAssets agreements are combined and documented as a single Vizient agreement, which is then signed and implemented for member access.
Currently, Vizient is working to deliver a contracting platform in 2017 that combines and builds on the best capabilities from each legacy system’s platform. Until that platform becomes available, new Vizient agreements are currently implemented into two separate systems:
- Legacy VHA, University HealthSystem Consortium, Children’s Hospital Association and Provista members who previously accessed Novation agreements will continue to access Vizient contracts through Marketplace|Procure
- Legacy MedAssets’ members with signed participation agreements will be able to enroll in integrated agreements through the legacy MedAssets Enrollment System
In early November, there were more than 300 contracts uploaded into these systems for access by members, and new Vizient contracts are being uploaded each week.
How can you access the value in these new contracts?
To access pricing within the new contracts, members will need to follow the same process they currently use for new agreements by submitting tier requests for supplier approval. Members who previously accessed legacy Novation contracts will submit tier requests through the Contract Price Activation tool. Legacy MedAssets members will submit tier requests through the existing MedAssets Enrollment System.
To learn more about the value created through our contract integration process and other sourcing efforts, register for Vizient’s biweekly webinar, held every other Thursday at 10 a.m. CT through the end of the year. The next webinar is Thursday, Dec. 1.
“Bringing the nation’s two largest portfolios together is a complex process that involves aligning disparate terms and conditions and various forms of value (pricing discounts, rebates, increased breadth of product or service coverage, etc.) for each and every contract,” Allen said. “We exist to help members deliver exceptional, cost-effective care, and we’re committed to doing whatever it takes to advance that objective.”
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