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New formulary-based eProcurement extends industry marketplace

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ATLANTA, Aug. 3, 2012 - Wheaton Franciscan Healthcare in Glendale, Wisconsin, has identified multimillion dollar savings opportunities due to McKesson’s new eProcurement Suite. Now generally available, the McKesson offering is the industry’s first eProcurement solution that can use a hospital’s own product formulary to stop spend leakage before it happens. The new suite works with the company’s eCommerce marketplace, enabling organizations to identify a lower cost or substitute product, validate contract prices and reconcile back orders—automatically and all at the point of requisition. 

The eCommerce marketplace offers a consumer-like shopping experience with full access to hundreds of vendors, showcasing more than 1.7 million items, including photographs and full-length product descriptions.  Using artificial intelligence, the new eProcurement Suite sends normalized, fully attributed supply chain and industry data to any of the hospital’s information systems, including materials management, enterprise resource planning, operating room or charge masters.  It helps automatically identify savings opportunities with prime vendors, volume discounts, tier-level discounts and spend consolidation. 

“We have already identified $3.64 million in annualized savings in the initial phase of a three-phase implementation,”  said Terri Kendrick, director, purchasing, Wheaton Franciscan Healthcare.  She noted that the savings came from addressing price line/product variance, contract price variance, product/vendor standardization and distribution/service fee reduction.

With the combined marketplace and eProcurement solution, providers gain more accurate data and better visibility into what service lines offer the best opportunity.  They can also identify consolidation opportunities by using the system to identify functionally similar and functionally equivalent items.  “What if” analysis can help further clarify the level of return possible through various initiatives.

In addition to helping stop spend leakage, the combined solution helps to improve workflow.  The customized workflow identifies functionally similar or equivalent items and enables the hospital to direct offformulary requests to the preferred product.  This helps reduce off-contract purchases associated with physician preference items, such as stents, pacemakers, and orthopedic supplies.

This new solution suite is part of McKesson Strategic Supply Sourcing which will be on display at the upcoming AHRMM conference, Aug. 5-8, in San Antonio, Texas. The fully integrated, cloud-based sourcing solution is designed to help completely automate the healthcare supply chain. This gives providers unprecedented visibility and control over their medical-surgical supply spending.


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