Ascension, Australian Co Form Global Healthcare Supply Chain Org

May 02, 2018 - Ascension, the largest non-profit health system in the US, recently announced the launch of a global healthcare supply chain joint venture with Sydney, Australia-based Ramsay Health Care Limited.

The joint venture will add Ramsay Health Care’s purchasing power to that of the St. Louis-based Catholic health system, which manages over 2,600 care sites, including 153 hospitals and more than 50 senior living facilities in 22 states.

Ramsey Health Care is an international hospital system, operating over 230 hospitals and day surgery facilities in Australia, France, Italy, the United Kingdom, Indonesia, and Malaysia. It is among the top six private hospital operators in the world with about 25,000 hospital beds and 60,000 employees.

“Ascension is continually exploring potential opportunities to extend our reach internationally and make healthcare more affordable for those we serve,” stated Anthony R. Tersigni, EdD, FACHE, President and Chief Executive Officer of Ascension. “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 Australian hospital system also anticipates the healthcare supply chain group to elevate clinical outcomes at a lower cost.

“This new global healthcare buying group between Ascension and Ramsay, will seek products internationally that are able to deliver the high level of service and clinical outcomes that our patients have come to expect,” said Craig McNally, Ramsay Health Care’s Group Managing Director and Chief Executive Officer.

“Globally, funders are looking for better outcomes at a reduced cost and it is important that all players in the healthcare system work to meet these expectations. At the same time, technology is advancing rapidly and we owe it to our patients to stay abreast of new developments. This partnership between Ramsay and Ascension will allow us to share learnings, best practice and industry knowledge to seek improved quality and outcomes whilst also reducing costs.”

The healthcare supply chain joint venture will be equally owned by Ascension and Ramsay Health Care, and the new organization is reportedly already “exploring alternatives to traditional approaches to create a more efficient technology platform for ordering, tracking, logistics and fulfillment.”

The new joint venture could be part of Ascension’s new approach to healthcare. The health system is reportedly steering away from its hospital-centric approach, the St. Louis Post-Dispatch reported in March 2018.

“We’re going to focus on health as opposed to healthcare,” Tersigni told the local news sources. “The mindset has to change from inpatient care to: How do we move away from our campuses and move into the community and move into settings that are easier to access, cheaper, quicker and have the same quality and safety and outcome standards?”

The new strategic direction resulted in a $400 million reduction in administrative costs, with another $65 million in savings projected by July 2018. The savings should help the health system, which allegedly faced a decrease in inpatient admissions.

As Ascension reportedly shifts its strategy, the health system seems to be targeting its supply chain. In addition to the global healthcare supply chain joint venture, Ascension also announced its intentions to create a non-profit generic drug company with US-based Intermountain Healthcare, SSM Health, and Trinity Health in January 2018.

With consulting services from the VA, the four health systems intend for the new drug company to reduce prescription drug rates and improve critical drug shortages through more robust generic drug development.

“This initiative has the potential to greatly expand the availability and affordability of critically needed medications for millions of Americans, especially for people living in poverty and those most vulnerable,” said Tersigni. “Rather than waiting and hoping for generic drug companies to address this need, we are taking this bold step on behalf of those we are privileged to serve.”

The recent partnership with Ramsay Health Care will add to Ascension’s efforts to reduce drug costs, as well as other hospital supply chain expenses. Leveraging lower prices from across the globe could help to drop supply chain costs in the US, which are notably higher compared to similar countries.