St. Louis-based Ascension, the parent company of senior living operator Ascension Living, has formed a global supply chain joint venture with Sydney, Australia-based Ramsay Health Care to try to reduce costs for both organizations.
The effort ultimately could serve as an alternative supply chain source for independent providers in North America and elsewhere, according to Ascension.
Ascension operates more than 2,600 care sites, including 153 hospitals and more than 50 senior living communities and is the largest private, tax-exempt, nongovernmental health system in the United States. Ramsay has more than 230 healthcare facilities in six countries on four continents (but not North America) and is the sixth largest private hospital operator in the world.
“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,” Ascension President and CEO Anthony R. Tersigni, Ed.D., FACHE, said in a statement.
The venture will be owned equally by Ascension and Ramsay. Two Ascension subsidiaries — Ascension Holdings International and The Resource Group, Ascension’s group purchasing organization and strategic sourcing subsidiary — will work with Ramsay’s international procurement office to develop the new group.
The group will identify an initial set of product categories for which to pursue procurement savings and expects over time to expand the effort to include more product categories. The organization already has begun work toward creating a more efficient technology platform for ordering, tracking, logistics and fulfillment, according to the companies.
“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,” Ramsay’s group managing director and CEO, Craig McNally, said in a statement. “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.”
News of the joint venture comes months after another big announcement by Ascension.
In January, the organization said it was forming a new nonprofit generic drug company with Trinity Health, SSM Health and Intermountain Healthcare, in consultation with the Veterans Health Administration, to try to improve medication affordability and access, “especially for people living in poverty and those most vulnerable,” Tersigni said at the time.
“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,” he said.