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CaseStudy–Analytics
James Sullivan
(585) 794-3469
james_s@mail.com
Blending Healthcare GPO and Distribution Experience,
Specializing in Executive Relationship Development
Endomechanicals Conversion Analysis
I was asked to examine the Endomechanicals category for one of the
local health systems. The health system had a 60/40 split in category
spend and was unable to take advantage of the premium tiers on
contract. The incumbent supplier had agreed to allow the health system
to access premium tiers with the understanding that the health system
would gradually increase usage of their products over the course of the
year. When the supplier surveyed the spend at the end of the year they
concluded that the health system was not in compliance and
invalidated access to the premium tiers. The health system was
downgraded to an entry level tier that would result in an additional
$1M of spend over the next year.
The Purchasing leadership and I met with the supplier sales team and
the health system’s Surgeon’s team. The supplier sales team refused to
concede. The health system negotiated a local contract with the
supplier to ‘stop the bleeding’, but would still take on an additional
$250K of spend for the upcoming year. In addition, because the health
system had negotiated a local contract they were not able to take
advantage of revenue share associated with the GPO tier.
The underlying issue was surgeon’s preference and the culprits were
endomechanical staplers. The split in spend corresponded to surgeon’s
training and preference on staplers from competing suppliers. I worked
with the Value Analysis team for several months, authoring several
analysis for presentations, but the Surgeon’s team refused to
consolidate usage. The Surgeon’s team argued that patient outcomes
would be compromised if individual surgeons were forced to use
staplers they were not familiar with.
The C-suite requested $10M in budget savings from the Purchasing
department for 2018. The Value Analysis team shared the analysis I had
authored with the C-suite and highlighted the potential savings. After
review, the C-suite agreed the potential savings and revenue share was
significant enough to pressure the Surgeon’s team to comply.

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2019-07 James Sullivan - Case Study - Endomechanicals

  • 1. CaseStudy–Analytics James Sullivan (585) 794-3469 james_s@mail.com Blending Healthcare GPO and Distribution Experience, Specializing in Executive Relationship Development Endomechanicals Conversion Analysis I was asked to examine the Endomechanicals category for one of the local health systems. The health system had a 60/40 split in category spend and was unable to take advantage of the premium tiers on contract. The incumbent supplier had agreed to allow the health system to access premium tiers with the understanding that the health system would gradually increase usage of their products over the course of the year. When the supplier surveyed the spend at the end of the year they concluded that the health system was not in compliance and invalidated access to the premium tiers. The health system was downgraded to an entry level tier that would result in an additional $1M of spend over the next year. The Purchasing leadership and I met with the supplier sales team and the health system’s Surgeon’s team. The supplier sales team refused to concede. The health system negotiated a local contract with the supplier to ‘stop the bleeding’, but would still take on an additional $250K of spend for the upcoming year. In addition, because the health system had negotiated a local contract they were not able to take advantage of revenue share associated with the GPO tier. The underlying issue was surgeon’s preference and the culprits were endomechanical staplers. The split in spend corresponded to surgeon’s training and preference on staplers from competing suppliers. I worked with the Value Analysis team for several months, authoring several analysis for presentations, but the Surgeon’s team refused to consolidate usage. The Surgeon’s team argued that patient outcomes would be compromised if individual surgeons were forced to use staplers they were not familiar with. The C-suite requested $10M in budget savings from the Purchasing department for 2018. The Value Analysis team shared the analysis I had authored with the C-suite and highlighted the potential savings. After review, the C-suite agreed the potential savings and revenue share was significant enough to pressure the Surgeon’s team to comply.