Magazine article Drug Topics

New Deal

Magazine article Drug Topics

New Deal

Article excerpt

Kaiser HMO consolidating drug, supply purchases

As part of its nationwide reorganization and cost-- cutting drive, Kaiser Permanente, the California-- based health maintenance organization (HMO), is consolidating purchases for pharmaceutical products as well as medical and surgical supplies. Kaiser's first-ever consolidated prime-vendor contracts went to Bergen Brunswig for drugs and to Allegiance Healthcare Corp. for med-- surg products. The two contracts cover about 300 Kaiser hospitals, clinics, and medical centers in 19 states and the District of Columbia. Prior organizational arrangement allowed individual Kaiser facilities and regions to handle their own pharmaceutical and med-surg purchases.

"We've tried to leverage our total volume by moving all of our business to a single buyer," explained Dale Kramer, Kaiser's director of materiel services for pharmacy operations. "We expect some very significant savings from the new arrangement."

Bergen was already the prime vendor for several Kaiser facilities, Kramer said, as were McKesson, Cardinal, and other wholesalers. Bergen's $4 billion national contract represents 70% incremental new business for the wholesaler in the first year and substantially more in succeeding years, based on Kaiser's growth projections.

The contract calls for a performance-based revenue-sharing formula. Kaiser has also agreed to test Bergen's Timed Inventory Management System in its southern California facilities. If the TIMS test is successful, it will be rolled out nationwide. The changeover from existing wholesale contracts to Bergen should be completed by the end of October, Kramer said. …

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