ROI acquires GPO in Orlando
- Group purchasing program
- Regard® private-label line
- Custom pack services
- Expertise in self-distribution and consolidated service centers
Founded in 2002, ROi serves as the supply chain arm of Mercy, a nonprofit health system based in Chesterfield, Missouri, near St. Louis. From its 100,000-square-foot facility in Springfield, Missouri, ROi provides distribution services to Mercy’s 44 acute-care and specialty hospitals, and more than 700 physician practices and outpatient facilities with a fleet of 125 vehicles servicing nearly 2,000 locations daily.
In 2011, ROi signed its first partnership agreement with another IDN – Baton Rouge, Louisiana-based Franciscan Missionaries of Our Lady Health System. The agreement gave FMOLHS access to ROI’s contract portfolio, as well as assistance opening and operating a central distribution center in Baton Rouge – the FMOLHS Logistics One Supply Distribution Center. More agreements for cost management and supply chain services followed, including:
- Spartanburg Regional, in Spartanburg, South Carolina (September 2012).
- HPS, a Middleville, Michigan-based GPO servicing acute- and non-acute-care providers in 20 states (January 2017).
- Virtua, a New Jersey-based health system (July 2017).
The transaction involving HPA is more than a partnership agreement, however. It is an acquisition. Others may follow.
HPA, previously owned by Orlando Health and South Lake Hospital, is now a wholly owned subsidiary of ROi, operating as a separate entity to manage HPA’s legacy contract portfolio and provide custom contracting solutions. Through the HPA acquisition, Orlando Health and South Lake Hospital agreed to a seven-year GPO membership term with ROi, while also maintaining membership with HPA.
“ROi’s GPO will continue to drive a committed sourcing strategy, which has proven to be a competitive advantage that delivers significant cost savings to providers,” says Michael Rivard, interim president and chief operating officer for ROi. “As we work through the integration of HPA and Orlando Health, we are working collaboratively with the healthcare organizations to consolidate their purchases to ROi contracts based on a timeline that is aligned with their goals and needs. As contracts are moved to ROi, the HPA team will transition to supporting ROi’s continued expansion efforts in the non-acute market.”
Expertise in self-distribution
The acquisition strengthens ROi’s expertise with consolidated service centers and self-distribution, says Rivard. “ROi brings a unique provider perspective to helping health care systems interested in self-distribution. We have more than a decade of provider experience, developing an integrated supply chain and self-distribution model for our founder and majority owner, Mercy. Orlando Health brings additional experience with a provider-owned Consolidated Services Center (CSC), which they have been operating for years.”
ROi is expanding the CSC collaboration that started between HPA and Orlando Health through its Regard® product line and Custom Pack Solutions offering, he adds.
“With both Orlando Health and Virtua recently becoming members of ROi’s GPO, we now serve four health systems with self-distribution operations,” says Rivard. “ROi is helping to bring these four members (Mercy, FMOLHS, Orlando Health and Virtua) together to share best practices and collaborate further on new opportunities.
“This is a very exciting aspect of our clinically integrated supply chain model. We are able to bring solutions all the way from the manufacturing plant to the patient bedside.
“ROi will continue to pursue acquisitions that grow or supplement existing service and product lines, or help expand into new service or product offerings,” he says.