Highmark launches new supply chain services organization to serve hospitals; secures multiple contracts in Pennsylvania and West Virginia

May 04, 2012, 08:13 ET from Highmark Inc.

PITTSBURGH, May 4, 2012 /PRNewswire/ -- Highmark Inc. has launched ProtoCo Supply Chain Partners, a new supply chain services organization to help hospitals reduce costs and achieve higher standards of patient care. Part of Highmark's new Integrated Delivery System, ProtoCo opened for business on April 9, and on April 30 it drew the interest of more than 350 vendor representatives from across the country at a vendor kickoff. The company launched with 50 employees in Pittsburgh and is expected to grow to 80 by the end of 2012.

A collection of three distinct companies, ProtoCo has secured multiple hospital contracts. It will manage the supply chain and handle purchasing for the West Penn Allegheny Health System, which annually spends approximately $480 million. ProtoCo expects to achieve savings for the health system of more than $100 million during the next five years. In addition, ProtoCo has finalized contracts with Saint Vincent Health Center in Erie, Pa., and the West Virginia United Health System, comprised of five hospitals located throughout West Virginia. Other contracts are under negotiation.

 "Containing the cost of health care is critical for our customers," said Bill O'Connor, a member of ProtoCo's leadership team. "At the same time, providing high-quality care is an absolute priority. ProtoCo Supply Chain Partners delivers on both. Through clinician-led decision-making and efficient supply chain management, we will help hospitals to accomplish higher standards of care while reducing their annual spending. This will add up to millions of dollars toward helping to contain health costs for community members."

ProtoCo group purchasing operations address all facets of a hospital's spending – medical surgical supplies, biomedical engineering, implantable devices, capital equipment, pharmaceuticals and purchased services. Through supply chain management, the company helps customers to optimize purchasing, inventory management, warehousing, distribution, receiving and customer service.

"ProtoCo is a model of progress in health care procurement," said John Paul, who leads Highmark's Integrated Delivery System. "Through ProtoCo, physicians will partner on key decisions. They'll determine procurement and protocols related to medical items, for example, and those protocols will be tracked via clinical decision support systems, leading to a high level of physician engagement and a consistently high standard of care for patients."     

About Highmark

Highmark Inc., based in Pittsburgh, is an independent licensee of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans. Highmark serves 4.9 million members in Pennsylvania, West Virginia and Delaware through the company's health care benefits business and is one of the largest Blue plans in the nation. Highmark has 20,000 employees across the country and provides a broad range of health and wellness related services through subsidiary and affiliate companies.

In November 2011, Highmark signed an affiliation agreement under which a new nonprofit parent company will hold the corporate membership rights in both Highmark and West Penn Allegheny Health System. The affiliation is pending regulatory approval.

For more information, visit www.highmark.com.

About ProtoCo Supply Chain Partners

ProtoCo Supply Chain Partners, launched in April 2012, is a group purchasing and supply chain management organization and a key component of Highmark Inc.'s Integrated Delivery System aimed at providing lower cost and higher quality health care products and services in the communities it serves. Headquartered in Pittsburgh, ProtoCo utilizes clinician-led decision-making and efficient supply chain management to help hospitals and health systems achieve higher standards of care and lower costs.

ProtoCo group purchasing and supply chain management services are delivered through three separate and distinct companies:

Protoco PPI LLC, a Pennsylvania limited liability company, which provides group purchasing of pharmaceuticals and physician preference items; and Protoco Supply Chain Services, LLC, a Pennsylvania limited liability company, which provides supply chain management services, group purchasing and distribution of all items other than pharmaceuticals and physician preference items; and HMPG Pharmacy LLC, a Pennsylvania limited liability company, which will provide pharmacy distribution services.

SOURCE Highmark Inc.