Challenge
In its 85-year-history, Springfield Clinic has grown exponentially into a community organization with more than 650 physicians and advanced practitioners in more than 80 specialties and subspecialities across central Illinois. The Clinic’s continued expansion creates a significant supply chain challenge as it seeks to enhance operations and limit disruptions through greater standardization and contract management. Without a centralized contracting and sourcing department, the organization struggled with contract negotiations due to lack of pricing transparency and accurate utilization reports across its enterprise. Clinical teams and departments were charged with price negotiations for the products they used, creating a complex, disparate process that led to above average spend on most items.
Solution
Springfield Clinic formed a contracting and sourcing department to enhance supply chain optimization. The new director recommended bringing Staritas onboard to help improve the maturity level of sourcing at the clinic.
With Staritas’s Benchmarking solution for supplies and capital equipment, Springfield Clinic has leveraged detailed cost comparisons to enhance contract negotiations resulting in significant savings for the organization. Proposal analysis reports indicated that many vendors were charging list price for their products. Springfield attributes its ability to achieve significant savings to Staritas’s robust data portfolio and customized reports, including Fair Market Value reports, Vendor Lists for equipment purchases such as office furniture, Market Intelligence reports for supplies and capital equipment, and Contract and Proposal Analysis to help assess service coverage and fees.
Impact
Springfield Clinic was quickly able to ramp up its contracting and sourcing department with the help of Staritas’s Benchmarking solution for supplies and capital equipment. With access to timely, actionable data, Springfield Clinic has successfully negotiated lower prices for many medical-surgical supplies, implants, instrumentation, and capital products realizing about $3.3 million in savings over one year and transformed the way it negotiates with vendors.
Half the savings were achieved on equipment purchases for a new Cath lab. Staritas data also helped Springfield achieve $200,000 in savings on lab reagent and service agreements. Staritas identified an excessive fuel surcharge on Springfield Clinic’s courier contract that was later removed from the agreement, saving the organization $120,000. “Our vendors aren’t used to pushback from us, but they know now to expect more negotiations,” says Avree Martin, Lead, Contract and Sourcing.
