Palmetto Health, four other hospitals join to increase purchasing power

04/10/2014 8:06 PM

04/10/2014 8:07 PM

Five of the major hospital systems in South Carolina, including Palmetto Health, will work together to save money on supplies and technology under a new initiative that could spread to even more hospitals.

Plans for the Initiant Health Collaborative leaked out during an MUSC board meeting Thursday morning before all of the boards involved had approved the deal. Palmetto Health later put out a news release about the initiative.

The first wave will combine the power of Palmetto Health, the Medical University of South Carolina, Greenville Health System, Self Regional Healthcare in Greenwood and McLeod Health in Florence to get better deals on the purchase of equipment and supplies and save on the operation of administrative and clinical support systems.

The agreement is structured to allow independence among the members but allow them to work together to reduce costs while improving quality of care. Hospital leaders say the collaboration was sparked by aspects of the Affordable Care Act that put more emphasis on quality of care rather than quantity of procedures.

“Our goal has always been to look for ways to enhance the health care experience for those we serve, and collaboration plays a vital role in our ability to do so,” said Palmetto Health CEO Charles D. Beaman Jr. “Through Initiant, we are excited to be teaming up with other health care providers who share this goal.”

Initiant will be a limited liability company owned by the founding members, with the opportunity to add more members, in the form of owners, or participants, who would be non-owners. Similar systems have been set up in Missouri, Georgia and Iowa.

“If each of us (the hospitals) is buying a CAT scanner, why can’t we all get together and buy them together?” Dr. Patrick Cawley, executive director and CEO of the MUSC Medical Center, told the Charleston Regional Business Journal.

These sorts of partnerships have been negotiated for years, but usually between one or two small hospitals and a larger hospital. Cawley said other nonprofit hospitals in the state could join the initiative.

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