Solutions should not be more complicated than the problems they are trying to solve!

Bohemia, NY – In keeping with its mission to offer the best in healthcare while keeping services affordable, Carle Foundation Hospital, Urbana, IL, recently implemented a freight management program that already is reducing costs in key supply and service areas. The program is a service offered by an Internet-based application service provider called TransportGistics, Inc. Carle Hospital was introduced to TransportGistics through the Group Buy program of Premier, Inc., the hospital’s group purchasing organization.

The adoption of new logistics technology in healthcare management has been slow, says Carle Hospital’s manager of  capital purchasing, Jeff Hesser. “Freight is usually considered just a natural part of the cost of supplies so most healthcare providers are slow in recognizing the potential in managing transportation.”

Carle is one of the first of the nation’s major hospitals to apply modern logistics technology to both its inbound and outbound shipments of materials and supplies. “We are an innovator,” says Hesser. “We are always looking for what can be done to drive down our operating costs.”  

This newest innovation comes in the form of transportation management utility tools designed by TransportGistics for companies to be able to easily flow into their traditional management procedures. Included under the umbrella of TGI Freight Management, the program enables hospitals like Carle to perform a transportation needs assessment, and then source, negotiate, procure, and execute their daily transportation requirements while realizing significant reductions in annual freight expenditures.  

“We were surprised to realize a savings almost immediately” said Hesser. According to TransportGistics’ projections, we would expect our freight costs to be reduced by as much as 15 to 20 percent within our first year of implementation.”

A key feature of TGI Freight Management is its ability quickly to identify simple, incremental solutions for transportation management and logistics functions within the supply chain. It provides a combination of products and services that affect and improve incremental pieces of larger transportation management issues. It enables users to unbundle the costs of transportation, identify areas of inefficiency, and attack each inefficiency one at a time.

“Logistics and shipping are under-analyzed budget line items that can quickly add up for a hospital. We find that with many of our members these items are hidden verses reported out separately,” said Larry Abramson, senior vice president, Premier Supply Chain Solutions. “Linking new solutions to solve a number of supply chain challenges has become a priority for Premier and we’re pleased that this latest effort has yielded tangible results.”  

Two of the areas where Carle found its most significant savings were in the actual cost of freight and in the payment of failed service invoices. “We found that our discounts for outbound freight improved significantly,” said Hesser. “And the invoices for failed transportation services that would otherwise have been paid more than covered any costs to implement the service. This was a victory in the ongoing challenge to decrease our variable costs in our market of growing financial pressures and dwindling reimbursements.”

Carle Foundation Hospital is a 295-bed tertiary care facility with more than 25 departments, including surgical, cardiovascular and neonatal intensive care units, and the region's only Level III Perinatal and Level 1 Trauma centers.  Carle also offers regional heart care and cancer care through the Carle Heart Center and Carle Cancer Center. Carle also serves as the primary teaching hospital for the University of Illinois at Urbana-Champaign College of Medicine. The  Hospital is accredited by The Joint Commission on Accreditation of Healthcare Organizations.

Premier Inc. is a healthcare alliance of more than 1,500 not-for-profit hospitals. One of its core functions is group purchasing in which members, such as Carle Foundation Hospital, rely on Premier to negotiate competitive and cost-effective contracts for medical supplies and services on their behalf.

TransportGistics is a global, multi-product and services company that provides market leading, simple, incremental solutions for transportation management and logistics functions within the supply chain. The company’s handpicked team of transportation and logistics experts has roots that reach into all aspects of the supply chain. It specializes in helping companies manage transportation services and customer satisfaction. In addition to InsourceAudit, TransportGistics other products include RoutingGuides, BLGen, FreightTracing and LBP Services.