UC Health collaborates to create savings in buying medical supplies, prescription drugs.

John Stobo, UC senior vice president for health sciences and services

University of California medical centers have saved more than $1 billion in purchasing medical supplies and prescription drugs since 2008. By collaborating, UC has maximized its buying power and participated in government purchasing programs that come as a result of its public service commitment.

Regents praised UC Health officials at their meeting last week for working together to create savings. The university has medical centers at UC Davis, UC Irvine, UCLA, UC San Diego and UC San Francisco.

Dr. John Stobo, UC senior vice president for health sciences and services, explained that the savings include three key components:

• Participating in a nationally prominent medical supply group purchasing organization. Through Novation GPO, which contracts on behalf of hospitals, clinics, surgical centers and other health care entities, UC Health has saved an estimated $677.6 million since 2008.

• Negotiating additional systemwide medical supply product contracts. Through efforts such as pooling purchase selections to make competitive or sole-source contract awards to vendors, UC Health has saved an estimated $152 million since 2008.

• Participating in the low-cost 340B drug pricing program. This federal program provides discounts on outpatient prescription drugs to safety-net hospitals such as UC that provide a disproportionate share of services to medically underrepresented populations. It has saved UC Health $262.5 million in the past three years.

The savings come at a critical time for UC’s medical centers, a $6 billion enterprise. “We’re in a fiscal crisis,” Stobo said after the meeting. “We’re looking at ways to save money. We’ve accomplished a lot. We’ve saved more than $1 billion. We plan to pursue more opportunities.”

Regents also received updates on other UC Health news:

• UC Center for Health Quality and Innovation: UC Health’s innovation center awarded nine grants totaling $3.4 million to UC faculty and staff to improve patient care throughout California. The grants include proposals to stop blood clots, reduce hospital readmissions, decrease falls in hospitals and limit patient exposure to radiation – collaborative efforts that will make patients safer. Read more.

• Martin Luther King Jr. Hospital: UC and Los Angeles County are making progress in their efforts to reopen MLK Hospital in South Los Angeles. The hospital’s board has contracted with Hensel Phelps Construction Co. to design and build the renovated 120-bed hospital, which is on schedule to open by fall 2013. Read more.

• UC Umbilical Cord Blood Collection Program: UC is preparing to establish California’s first statewide public program for collecting umbilical cord blood as part of AB 52, approved last year. UC Davis plans to administer the program, which aims to save lives by collecting stem cell-rich cord blood that can be used to treat diseases. The program will be funded in part by a new $2 fee for certified copies of birth certificates. Read more.