Alliance of 16 Hospitals in LA., Miss., Ark., and Okla. Trim More Than $3 Million in Supply Costs in First Year.

CHARLOTTE, N.C. -- In its first full year of existence, the Southern Premier Owners Group (SPOG) - an alliance of 16 hospitals and medical centers across Louisiana, Mississippi, Arkansas and Oklahoma - already has slashed a documented $3.3 million in supply costs, according to figures released today.

Over the life of current contracts for items ranging from exam gloves to film to hypodermic needles, SPOG expects nearly $10 million in supply cost reductions through its regional collaborative.

What makes this partnership unique?

National contracts, local advantage

All of the 16 organizations are members of Premier, Inc., a national alliance of 1,500 hospitals, medical centers, and healthcare facilities with more than $21 billion in annual purchasing volume. But SPOG takes it a step further by regionally combining its supply purchases to reach higher volume levels - and, subsequently, lower prices - on Premier's contracts, leading to still more cost reductions.

"As a 300-bed hospital, we would never have been able to get to an upper tier," says Kary LeBlanc, director of materials management at Terrebonne General Medical Center in Houma, La., and co-chairman of SPOG. "But by aggregating our volume, we are able to reach that level and the savings that goes with it."

Sharing what works

In an industry often hesitant to share critical business information, the materials managers of the 16 SPOG hospitals meet in person every other month, and hold conference calls on the intervening months, to talk as a group with vendors and to discuss ways to further reduce cost.

"This is a complex effort because we have no ownership or control over any of the individual owner hospitals or their affiliates," explained SPOG's other co-chairman, William Myers, director of materials management at Mississippi Baptist Health System. "Yet despite the independence of each member, it works - and works well."

Richard Browning, regional director for Premier, says the initial meetings of the SPOG materials managers were a little awkward.

"Until then, they never shared information," Browning explains. "But now they get together and the networking that goes on is amazing. There's a camaraderie you'd expect to see in a group that has known each other for years. And the results speak for themselves."

David Turner, another Premier region director instrumental in the formation of SPOG, agrees.

"SPOG offers the owners the opportunity to collaborate to achieve results for their individual organizations and their affiliates that they would not be able to attain on their own," Turner says. "The synergy of the group is fantastic. Not only have they been able to achieve great cost savings, but the operational networking with the group has been great."

The other SPOG members are: General Health System in Baton Rouge, La.; Glenwood Regional Medical Center in West Monroe, La.; Lafayette General Medical Center in Lafayette, La.; North Oaks Health Systems in Hammond, La.; Touro Infirmary in New Orleans; West Jefferson Medical Center in Marrero, La.; Woman's Hospital in Baton Rouge, La.; Grenada Lake Medical Center in Grenada, Miss.; Rush Health System in Meridian, Miss.; South Central Regional Medical Center in Laurel, Miss.; University of Mississippi Medical Center in Jackson, Miss.; Jefferson Regional Medical Center in Pine Bluff, Ark.; White River Medical Center in Batesville, Ark.; and Saint Francis Health System in Tulsa, Okla.

Key SPOG cost reductions include custom procedure trays (more than $1 million), exam gloves (more than $200,000), and linens (more than $100,000).

About Premier, Inc.

Premier, Inc., is a healthcare alliance entirely owned by more than 200 of the nation's leading hospital and healthcare systems. These systems operate or are affiliated with nearly 1,500 hospital facilities and thousands of other healthcare sites. Premier provides an array of resources supporting health services delivery including group purchasing for more than $21 billion annually in supplies and equipment. Other resources offered by Premier are supply chain and clinical performance improvement services and insurance programs. Headquartered in San Diego, CA, Premier has offices in Chicago, IL; Charlotte, NC; and Washington, DC.