A partnership to affect real cost reduction: a guaranteed savings of $20 million.

Abstract

In 1994 Brigham and Women's Hospital and Massachusetts General Hospital joined forces to form Partners HealthCare System, Inc. (Boston, MA), an integrated healthcare delivery system. Both teaching affiliates of Harvard Medical School, the two hospitals comprise approximately 1,750 beds with 80,000 inpatient admissions and 1.3 million outpatient visits annually. The two campuses have over 16,000 employees in facilities covering 6.5 million square feet. The key goals of their partnership were to reduce cost and improve quality. Partners HealthCare System (PHS) set a goal to save $240 million in the first three years. These savings were to be achieved through consolidating departments and programs, adopting best practices between institutions, and wise purchasing. This article looks at the supplier partnering process followed by PHS to affect a guaranteed savings of $20 million.