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©2014 Novation Confidential. 1 How Group Purchasing Can Professionalize the Buyer November 4, 2014 Pete Allen, Group Senior Vice President, Novation.

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Presentation on theme: "©2014 Novation Confidential. 1 How Group Purchasing Can Professionalize the Buyer November 4, 2014 Pete Allen, Group Senior Vice President, Novation."— Presentation transcript:

1 ©2014 Novation Confidential. 1 How Group Purchasing Can Professionalize the Buyer November 4, 2014 Pete Allen, Group Senior Vice President, Novation

2 ©2014 Novation Confidential. 2 Reform Implementation Dominating Priorities of U.S. Health Care Providers ©2014 Novation Confidential. 2

3 3 Supply Chain is the Primary Target for Cost Reduction Source: Health Industry Distributors Association & McKinsey & Company: Thought Leaders: Healthcare Supply Chain 2015 (2013) 3 ©2014 Novation Confidential. 3

4 4 The Novation Advantage: Expertise, Efficiency and Data DATA $80B in spend from 2,000+ hospitals ©2014 Novation Confidential. 4 96%-98% of U.S. hospitals belong to a group purchasing organization

5 ©2014 Novation Confidential. 5 The Novation Advantage

6 ©2014 Novation Confidential. 6 Proven Sourcing and Contracting Strategies Drive Measurable Efficiency ©2014 Novation Confidential. 6

7 7 Efficiency in Action: Simplifying a Complex Exam Glove Bid Suppliers registered for the bid Suppliers submitted proposals 13 Suppliers met minimum qualifications Suppliers reviewed by councils

8 ©2014 Novation Confidential. 8 Efficiency in Action: Exam Glove Savings for All Members INDUSTRY-LEADING TERMS AND CONDITIONS DIVERSITY SUPPLIER ON CONTRACT MITIGATED PRICE INCREASE IN A CATEGORY WITH VOLATILE RAW MATERIAL COSTS PRIVATE LABEL VALUE

9 ©2014 Novation Confidential. 9 $35K-70K spend for a 300- bed hospital Using valuable resources to manage such complexities for low-spend categories… PATIENT PLASTICS Sophisticated Systems, Tools and Processes Facilitate Advanced Product and Price Management 1200 Contracts Novation manages >20M product-related changes annually… Hospital specification changes Packaging changes Product changes Pricing changes 600+ Suppliers 700+ Product Categories Unit-of-measure changes Illuminates the advantage of Novation’s efficiency: $33M spend across Novation PATIENT PLASTICS ©2014 Novation Confidential. 9

10 10 Novation Experts Negotiate Clinically Effective Contracts with Leading Terms and Pricing 230+ sourcing and contracting experts 200+ data and analytics experts

11 ©2014 Novation Confidential. 11 Industry’s Highest-Quality Data Assets Drive Unmatched Insights and Superior Pricing Continuous Flow of Data Submissions Fuels Continuous Price Monitoring Data-Driven Transparency Leverages Negotiations Novation Best Price Automated Data Submission $80B from >2K Hospitals $1.5 Billion in Pricing Improvements SINCE 2009 $1.5 Billion in Pricing Improvements SINCE 2009 >$500M annually in Advisory Services savings $1.4 billion in member-driven analytics savings since 2010 ©2014 Novation Confidential. 11


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