Ascension, the largest nonprofit health system in the U.S., has announced a new joint venture with Australia-based hospital operator Ramsay Health Care Limited to create a “global supply chain” to reduce costs for Ascension’s 2,600 sites of care and the more than 230 facilities Ramsay operates in six countries.
According to an Ascension press release, ownership in the venture will be equally split between the two companies. Ascension’s existing group purchasing organization, The Resource Group, will work with Ascension Holding International and Ramsay’s International Procurement Office to “develop and operationalize” the new project.
“Ascension is continually exploring potential opportunities to extend our reach internationally and make healthcare more affordable for those we serve,” Ascension president and CEO Anthony Tersigni, EdD, said in a statement. “As we looked for partners to help us improve the quality and reduce the costs of the millions of items our caregivers use to provide compassionate, personalized care, we were tremendously impressed by Ramsay Health Care, whose values and mission align closely with our own.”
The belief is the global buying organization can reduce costs and operating performance for Ascension and Ramsay providers as well as offer an alternative source of supplies for independent providers in North America, Asia, Europe and Oceania.
First steps will be to decide where to pursue savings with the new entity’s purchasing power on supplies. Ascension said the venture has already “begun exploring alternatives to traditional approaches to create a more efficient technology platform for ordering, tracking, logistics and fulfillment.”
“The new venture is designed by providers, for providers, with the belief that we can bring greater efficiency, discipline and innovation to the system, and form more productive relationships with the vendor community, so that all can benefit by making healthcare more affordable,” said John Doyle, CEO of Ascension Holdings International.
Ascension has been looking at many opportunities to reduce costs, including creating a not-for-profit generic drug company with Intermountain, SSM Health and Trinity. It’s backed off the more traditional route of pursuing even larger scale after halting merger talks with Providence St. Joseph Health and reportedly will focus on restructuring existing operations after reporting a 27 percent decrease in revenue in 2017.
The announcement came on the heels of rumors of Tersigni’s possible departure from the healthcare giant. Multiple news outlets, including the Wall Street Journal, have reported he’s on President Donald Trump’s shortlist to become the next Veterans Affairs Secretary.
John joined TriMed in 2016, focusing on healthcare policy and regulation. After graduating from Columbia College Chicago, he worked at FM News Chicago and Rivet News Radio, and worked on the state government and politics beat for the Illinois Radio Network. Outside of work, you may find him adding to his never-ending graphic novel collection.