Contracts
Pennsylvania expects to save $55M with PHS contract extension
A Medical Device Daily Staff Report
Attempting to save taxpayers $55 million and safeguard the continuity of medical care for Pennsylvania?s 46,000 inmates, the Department of Corrections and its medical contractor, Prison Health Services (PHS; Brentwood, Tennessee), have agreed to a five-year extension of its existing contract.
?Continuity of inmate care is a matter of importance to the department,? said Corrections Secretary Jeffrey Beard. ?By doing this, we are making sure that inmates continue to receive excellent health care services. The extension also allows the department to lock in low rates, saving more than $5 million now.?
The current $73-million-per-year contract with PHS started in 2003 and was due to expire in August.
In exchange for the five-year extension, PHS is placing a 4% cap on the annual rate of increase each year for the first two years of the extension and a 3.85% cap for the remaining three years.
The $500,000-per-year cost reduction previously negotiated with PHS will continue through the additional five years of the contract.
The caps and the price reductions for the additional five years are expected to save Pennsylvania about $46 million. Another $9 million would be saved by PHS continuing to provide for a direct pass-through of professional liability costs outside of the base fee during the entire five-year extension.
PHS also agreed to share half of any off-site cost savings with the department. The company now realizes 100% cost savings of any off-site medical services provided to inmates below the contract?s catastrophic threshold.
Finally, PHS would fund the $1.1 million cost of implementing its corrections-based, CatalystSM electronic health record and automated Chronic Care Tracking System. This will eliminate the need for the department to consider separate outsourcing for a similar system, it said. The system is expected to save the commonwealth between $3 million and $8 million.
In other contract news: The Premier (San Diego) healthcare alliance reported that five hospitals have renewed contracts to continue using SafetySurveillor to detect and alert staff of healthcare-associated infections (HAIs) and protect patients by continuously tracking HAIs and antibiotic use.
The company said that nearly 200 hospitals currently utilize the Web-based SafetySurveillor infection prevention system to enhance patient care.
Hospitals renewing their contracts with Premier are: Dallas VA Medical Center (Dallas); Methodist Hospital (Omaha, Nebraska); and St. Elizabeth Medical Center (Covington, Kentucky).
SafetySurveillor helps hospitals collect data needed to meet state-mandated public reporting of certain HAIs, including prophylactic antibiotic start and stop times and identification of patients with methicillin-resistant Staphylococcus aureus and Clostridium difficile, two common infections found in hospitals today. Because of the large volume of clinical data that must be analyzed, many hospitals have resources to do targeted surveillance of high-risk patients only. With the automated SafetySurveillor system, hospitals can detect HAIs, alert staff and facilitate timely intervention to reduce and prevent infections.
Owned by not-for-profit hospitals, Premier operates a healthcare purchasing network and a comprehensive repository of hospital clinical and financial information.
