Purchased Services and Group Purchasing Organizations

Purchased services contracts and outsourcing agreements are critical areas of the supply chain that help hospitals and health systems reduce costs, increase revenue, improve workflow and efficiencies, and enhance operational quality. We bring a pragmatic, reasonable and business-minded approach to providers’ purchased services, outsourcing and group purchasing organization arrangements.

When engaging our team, you can expect the following:

• A clear strategy for clients. Based on our significant experience working with hospital clients and vendors, we know what is fair in the market, what to ask for and what you should expect to get from vendors. We know when to push back on a bad offer and attempt to negotiate further, and when to walk away and select an alternate vendor.
• A fair, competitive RFP negotiation process. We drill down to what is important to our clients and focus on what saves money, improves quality and makes a difference in operations and patient care. We do more than just compare proposals; we drive the hard negotiations that take disparate offers and shape the best one that delivers exactly what our client wants.
• Actual realized savings and concrete benchmarks. We are detailed dealmakers who will not negotiate with vendors for vague projections and promises. We craft tailor-made solutions with price metrics, performance standards, and terms of service and maintenance in mind that give our clients a strategic advantage to achieve actual realized savings and documented success and value.
• Long-term strategic partnerships. We engage vendors in a way that adds value by creating a long-term strategic partnership that extends beyond the typical purchaser/supplier relationship.

Purchased Services and Non-Core Service Outsourcing

We develop purchased services outsourcing agreements that keep operations running smoothly at a minimal cost and free up hospitals and health systems to focus on what they do best: provide superior patient care. Our tools empower the client to determine which services will offer the best return on investment through customized RFPs and contracts that establish financial and operational performance parameters and hold contracted suppliers financially account­­able for cost savings and service quality shortfalls. We can also help clients review their existing purchased services contracts and negotiate enhancements designed to match what vendors are currently making available to other customers in the market.

We have represented hospitals and health care systems of all sizes in a variety of purchased service RFPs and purchased service contract negotiations, including, but not limited to:

• Food and nutrition services
• Environmental and laundry services
• Patient transport and call center services
• Diagnostic imaging and biomedical maintenance and repair services
• Revenue cycle management
• Mail and courier services
• Transcription, coding, release of information and health information management (HIM) scanning services
• Managed print and copy center services
• Facilities management (plant operations and maintenance)

With our Faegre Drinker lawyers, we also assist clients with the labor management, employee benefits and tax issues that often arise in negotiations.

GPO Contracts

Our team has sourced, negotiated and documented more than 100 long-term GPO participation and service arrangements for clients. Client needs are outlined exactly in the RFPs to make clear what is desired from GPOs to include in their bids for our business. Likewise, term sheets are clear so that there is no uncertainty for vendors. This approach puts our clients and our team in the driver’s seat for negotiations. We have also developed a strong model for working with hospital and health system clients who want to develop their own group purchasing organizations, regional purchasing collaborations and shared services organizations.

We help clients refresh long-term group purchasing relationships between national GPOs and our hospital clients by negotiating enhancements to the business and legal terms of an existing contract. For example, potential areas of improvement include, but are not limited to:

• Increased shareback
• Guaranteed savings (based on actual, realized savings rather than the projected savings that most GPOs want to “guarantee”)
• Additional support staff and services
• Access to a suite of technology solutions at reduced or no cost

For clients wanting to change GPOs, the information from contract reviews can be used to benchmark the desired business and legal terms of potential alternatives in the GPO market.