Johns Hopkins Case Analysis

The Association for Healthcare Resource and Materials Management, the largest association of healthcare resource and material managers in the nation, presented its annual conference in Boston, MA (AHRMM, 2015). Johns Hopkins Health System proclaimed, during the conference, that they were able to reduce their supply costs by $41 million dollars through “e-Sourcing.” Johns Hopkins initiated their own strategic sourcing strategy as a way to reduce costs and improve margins (Intesource, 2015/a; Johns Hopkins Medicine, 2014; Slocumb & Grant, 2011). Johns Hopkins discussed considerably better contracts for medical equipment such as cardiac rhythm management devices and major radiology modalities, as well as medical supplies such as sutures, endo-mechanical devices, and …show more content…
Johns Hopkins uses a central business purchasing service and self-contracts for medical/surgical supplies and equipment. The health system’s source and procurement service expense for Fiscal Year 2009 exceeded $1.2 billion. The Johns Hopkins Hospital is also well into nearly $1 billion renovation effort on the East Baltimore campus; scheduled to open late 2011 (IDN Summit, 2010). Johns Hopkins had a lack of time and the organizational problem associated to normal bidding has really inspired purchasing staff members to renegotiate current contracts rather than following the more awkward, overwhelming and more formal bidding process. In fact, the bidding and procurement of the equipment and furnishings connected to the new assemblies joined with the need for regular bidding of standard operating materials would require either a sizable increase in procurement staff or a new way of doing business (IDN Summit, 2010). In the process of selecting a more reliable and effective bidding of supplies and equipment; discovering the possibility of using e‐Sourcing as a means of rationalization and more