Nursing home group tries bulk purchasing to save cash

January 12, 2009
Indiana's nursing homes are hurting. So one of their trade associations has signed new purchasing contracts it thinks will save them a few more bucks.

The Indiana Health Care Association signed contracts with three corporations to buy supplies, medicines and insurance in bulk.

The association tapped New York-based Innovatix LLC, a purchasing network with $33 billion annual volume of medical supplies, pharmaceuticals and food. It also partnered with the Indianapolis office of Marsh USA Inc. to help broker insurance policies for nursing homes and other long-term-care providers.

The association also has a joint venture with Indianapolis-based Wellfount Corp. to operate an institutional, member-owned pharmacy that can manage the myriad medications taken by nursing home patients.

These partnerships are designed to shave costs at nursing homes so they can spend more money on patient care.

"These savings could be the difference between being profitable and unprofitable for many of our member facilities," said the association's president, Steve Smith.

The Indiana Health Care Association represents both for-profit and not-for-profit nursing homes, many of which have a high percentage of patients covered by Indiana Medicaid, which offers low reimbursement payments.

Indiana's cash-strapped nursing homes are also staff-strapped. Indiana claims the nation's highest vacancy rate for staff nurses at long-term-care facilities.

Fully 26 percent of staff nurse positions at nursing homes are unfilled, according to a July study by the American Health Care Association, the parent organization of the Indiana association. Indiana would need an estimated 525 more nurses in long-term-care to fill the gap.
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