What does Inspirity Health Partners, LLC mean for the supplier community?
Inspirity Health Partners is a collaboration between Mayo Clinic Supply Chain Management and HumanityCorp that is designed to reduce waste from the supply chain, including but not limited to accurate and efficient transactions, full use of EDI, GS1 standards and supplier-provider relationship management. Many of you have experienced how Mayo Clinic operates within the market as an individual entity and in support of the Captis membership. It is Inspirity Health Partnership’s intent to coalesce and extend Mayo Clinic’s experience and leading practices of committed and aggregated sourcing to a broader segment of the market.
Inspirity Health Partners, operationally managed by Mayo Clinic Supply Chain, has become a member of Vizient and Captis LLC. Mayo Clinic will continue to be a shareholder member of Vizient and Captis utilizing those portfolios for Direct products, i.e. commodities, clinical preference, medical device, and pharmaceutical expenditures. Mayo Clinic in its operational role will have several portfolios that it may access–Mayo Clinic individual, Captis and several Vizient niche GPO products used in Direct patient care. In addition to Direct Products, Mayo Clinic Category Management teams will be building a custom portfolio for Inspirity Health Partners for Indirect products and services which Mayo Clinic will access as an Inspirity Health Partners customer itself.
Customers of Inspirity Health Partners will have agreed to create a co-management agreement where Inspirity Health Partners supply chain resources will function as an extension of Mayo Clinic Supply Chain. Inspirity Health Partners will manage or control all aspects of the Source to Pay process for provider customers. These customers will have access to all Captis and Vizient agreements as “controlled supply chain entities” of Inspirity Health Partners. There will be no overlapping agreements between the Captis and Inspirity Health Partners portfolios related to Medical Device, Commodities, Clinical Preference and Pharmaceutical products.
Please feel free to reach out to your contacts at Mayo Clinic Supply Chain Management or contact us.
FAQs
General
Inspirity is a limited liability company which seeks to improve and support the supply chain functions and improve the financial position of healthcare providers who have been unable to achieve these outcomes on their own. Through a co-management agreement, it seeks to create clinical integration with the clinical practice utilizing the experience and resources of a Gartner Master Class-designated supply chain.
Inspirity is NOT a GPO, consulting firm, aggregation group, or staff outsourcing company. It will partner with existing GPOs, operational consultants, and aggregation groups to enable outcomes through 10-year co-management agreements with healthcare organizations to elevate current staff, optimize technology, capture value within Direct and Indirect sourcing, and monetize waste in the supply chain.
HumanityCorp and Mayo Clinic have joined forces to create Inspirity Health Partners, LLC.
Mayo Clinic is an owner and the operational lead for IHP. Mayo will work with the participants to support their sourcing needs, foster relationships between suppliers and participants, and develop relationships with the participants’ internal stakeholders to support a clinically integrated supply chain.
HumanityCorp brings unique financial tools to the table that enables a participant to monetize savings available across the supply chain. HumanityCorp’s mission is to save one million lives by reducing waste within the supply chain and enabling reinvestment in improved quality and outcomes.
No, Mayo Clinic will continue to be an owner/member of Captis and use the Captis portfolio under the category and contract compliance requirements for commodities, laboratory, clinical-preference, medical device, and pharmaceutical agreements.
IHP is a member and will utilize Vizient for its primary GPO. Participants will access Vizient and Captis portfolios through Inspirity. Vizient Advisory Services will be supporting the Mayo Clinic Indirect Sourcing Team to develop a strong Inspirity Indirect contract portfolio. Vizient is also staffing the procurement operation for Inspirity, utilizing Inspirity’s proprietary infrastructure for ordering and payment.
Inspirity believes the likely organizations to partner with Inspirity are those with a net patient revenue generally between $1B and $5B.
Organizations that may fall into one or more of the following categories:
- Seeking to elevate the performance of their organization
- Having made limited investments in their supply chain
- Wishing to monetize their supply chain to support capital investment
- Seeking to improve their cost-per-patient day
- Improving patient outcomes
- Wishing to leverage a clinically integrated supply chain
- Interested in creating a co-management arrangement for key business processes within their Source to Pay business processes
All Direct and Indirect products and services, contract labor, pharmaceuticals, pharmacy benefit management, capital, and purchased services are included in Inspirity. Inspirity will assist in funding of selective clinical or operational improvement investments when an ROI exists.
Inspirity is targeting three to four new participants per year for the next several years. Additionally, healthcare providers who are seeking to monetize the pent-up value within their supply chain and are willing to enter a supply chain co-management relationship with Inspirity are those that demonstrate the most interest.
Inspirity will function as an agent on behalf of the participant. Therefore, it will have access to business processes and contracts previously put in place. The determination of continuation of an agreement will be made jointly by the participant and Inspirity, based on the term and competitiveness of the supplier agreement.
For Captis agreements, the Inspirity participants will be slotted where each qualifies.
For existing Mayo agreements where products and services are not found in the Captis portfolio, the agreement would potentially be assigned to Inspirity Health Partners, LLC. At that time, Mayo Clinic and the participant would access the Inspirity agreement at a common competitive price.
Inspirity sought being GPO agnostic. Inspirity believes that GPOs and the services they provide are an integral part to the healthcare market. Unfortunately, now, market dynamics do not allow for that level of creativity. Inspirity will be using the Captis portfolio for Direct products given its market leading position. There is no desire to replicate infrastructure, portfolios, or value for Inspirity to become a GPO itself.
Yes; however, not all contracts will be drafted on GPO paper. As mentioned, Inspirity is not a GPO, nor will it collect administrative fees directly from suppliers unless associated with a Vizient papered agreement. Inspirity has been structured and will meet all of the operational and regulatory requirements of Discounts Safe Harbors, Personnel Safe Harbors, and Stark.
Mayo will participate with Inspirity on the Indirect spend categories. While there are no plans in place to run Direct spend through Inspirity, they will not be creating a portfolio that competes with the Captis portfolio. Other services and offerings will be evaluated in the future as the programs mature and participation brings value to Mayo Clinic.
There are many benefits for supplier partners. Inspirity participants will be held accountable for the agreements and tier to which they have committed. If the organization is not compliant, Inspirity will allow the supplier to increase price without the ability to change suppliers.
Inspirity has a proprietary, multi-enterprise, procurement and payables system that will enable suppliers to transact with a single trading partner rather than multiple organizations. This will facilitate one invoice through the platform with multiple ship-to locations, improve on accurate pricing, UOM, and product numbers, and be a single point of contact for PO/Invoice resolution, EDI, etc.
Inspirity and Mayo Clinic (which manages core activities) will function as the primary agent for Source to Pay activities for Inspirity participating organizations. Most suppliers will have an appreciation of how Inspirity will engage the supplier community through a collaborative approach and process.
This is only Phase I of where Inspirity wants to take the market. Phases II and III (once Inspirity has a meaningful volume to suppliers) anticipate working with supply partners to create a portfolio of products that are contracted over a much longer period, enabling more predictable product schedules, looking to negotiate for margin rather than price that creates a shared risk/reward for all trading partners, and work with manufacturers to drive out waste and redundancies, and minimize diversity of SKUs and so much more.
We ask for collaboration and partnership to create a more streamlined and efficient supply chain transaction process for all trading partners. We are also seeking participation in bringing value to Inspirity participants, particularly when value is provided to the supply.
Tracings will be reported as they are today. If a supplier ships product through distribution, the distributor will continue to report tracings based on the shipping location. Inspirity, as an agent, does not take title or a quick title to the products you sell. For direct sales/shipments, Inspirity does not anticipate a change to your process to track sales.
The Mayo Clinic Category Management team will support Inspirity participants in much the same way that they support Mayo Clinic in the areas of Sourcing, value analysis, price management, and rebate management. There will be no change in support of Mayo Clinic by the team.
Supply Chain Finance will provide financial oversight and audit and control services to Inspirity.
The Mayo Clinic Supply Chain Advisory Services team is assisting Inspirity participants with activities, such as expense management analytics and reporting, value reporting, and P&L narratives associated with Inspirity activities to help the participants optimize value brought by Inspirity.
Procure-to-Pay at Mayo Clinic is not supporting Inspirity activities directly, only providing consultation.
No, this is not a replacement for Captis growth.
Many provider organizations become members of Captis to maintain a greater level of independence for their organization by leveraging aggregation. Most do not have an interest in outsourcing their SCM operations given their organization’s culture and philosophies. Captis members are garnering the portfolio value of Captis on the three committed categories and pharmacy already.
Captis members may become Inspirity participants for Indirect products and services; however, each would be required to employ similar co-management agreements across Source-to-Pay for those categories.
Inspirity may offer a service within its portfolio that any healthcare provider in the nation can access without full business process outsourcing. These will not compete with the Captis portfolio and will be rare offerings.
To engage with Inspirity is to take on a long-term commitment for an organization. Inspirity’s predictive models are based on a 10-year service/partnership agreement with our participants. In most situations, there is a 24-month notification period to exit the agreement, and penalties may apply. Inspirity would hope for graceful exits given the time and effort to allow for transition to self-contracting and standing up internal resources, systems, and structure that are supplementing their operation.
For Captis agreements, Inspirity customers will be subject to exit requirements. Inspirity products and services agreements may have their own termination requirements, depending on the nature of the agreement with the supplier or service provider.
Existing Vizient administrative fees will continue to flow directly to the customer for contracts that are executed on Vizient paper, including the standard portfolio, Captis, and custom agreements.
Not all Inspirity contracts will be executed on Vizient paper, nor will they generate administrative fees. Examples include, but are not limited to, agreements executed on Inspirity paper, in Aptitude, or local partnering provider agreements.
Inspirity does not plan to collect administrative fees from the supply partners directly, only through Vizient-based agreements.
There is an Aptitude transaction fee for Captis-related contracts (Inspirity will be a member of Captis utilizing the Captis portfolio) that will continue under the standard Aptitude/Captis/supplier framework.
Inspirity (non-Captis) agreements executed in Aptitude will also have a transaction fee in lieu of administrative fees, as is standard for Aptitude.
Inspirity plans to optimize both Aptitude and Reveal for as many product agreements as possible to advance compliance monitoring and automation for all parties.
Inspirity will facilitate the execution of LOCs on behalf of its customers, manage compliance, rebates, coordinate implementations, manage payables and other payment terms. Existing manufacturing rebates will continue to be sent directly to the customer until the contract term ends.
New manufacturer rebates will be paid to Inspirity as the designated agent of the participant for collection and distribution back to the participant in accordance with the Inspirity participant agreement. Inspirity has a fully transparent model which is integral to a co-management agreement.
Suppliers will work with the participants as they do any customers. Local sales representation is critical to assist in conversions, back orders, recalls, and product information and product support. The suppliers will NOT work directly with the participant on pricing, off-contract purchases, or contract terms.
Yes, we are eager to broaden the Captis portfolio so that Inspirity participants have a wider breadth of coverage, particularly in the laboratory categories.
The Inspirity category compliance for its participants will be higher than for the typical Captis member. In most cases, the contract level compliance will mirror the existing Captis agreements. Due to the variability of clinical settings and practices, no organization will achieve 100% compliance in any contract or category.
Direct Sourcing
Inspirity participants will access the Captis portfolio through Inspirity as an N-Class member of Captis. At this time, each will be required to access the Captis tier for which they qualify as an individual IDN/organization. The Inspirity membership within Vizient’s systems will use standard processes and structure to enable suppliers to operationalize this approach. Inspirity will access Aptitude agreements via Captis.
Participants will have access to the Vizient portfolio should Captis not offer a contract on the specific product or services. There will also be occasions where Inspirity will contract directly with the supplier on Directs.
Indirect (not included in direct patient care) products and services may be written on Inspirity or Aptitude paper depending on the category and dynamics, and if it enables a speed to value for multiple participants to access your products or services and eliminates multiple negotiations and RFPs.
N-Class Captis membership is the Network Class where multiple organizations can access the Inspirity portfolio through “parent organization;” in this case, Inspirity. The parent organization is accountable to ensure internal and external commitments are met by the individual participant of the parent organization.
Inspirity has an onboarding process to enable activation of agreements in the Captis portfolio. Inspirity is making a concerted effort to facilitate onboarding in nine months; however, they have a maximum onboarding window of 12 months. Inspirity, rather than Captis staff, will be responsible for onboarding. Generally, the process will begin with distributed, matched products, followed by conversions that are distributed. Medical device and the remaining Direct commodity/clinical preference agreements will follow transitioning simultaneously.
Indirect agreements will be evaluated for performance and value within the first 12 months for a new participant joining Inspirity. The timing at which these agreements are renewed, extended, or go to RFP will be agreement dependent.
For Commodity and Clinical Preference (CCP) contracts, the participant will follow the Mayo Clinic preferred supplier, unless there is a dual- or multi-award, and if they are currently with one of the other suppliers. The goal for all CCP is that the Inspirity participants will utilize the same supplier as Mayo Clinic. It just might not happen at the initial onboarding.
For Medical Device, the participants will enroll in the contracts they qualify for. Conversion opportunities will be discussed and may occur as a contract is renewed or rebid.
Direct product selections will be Captis agreements, preferably with suppliers that Mayo Clinic uses to coordinate responses to backorders, recalls, and other supply interruptions. Participant will access the tier their individual system qualifies for independently.
Initially, if an agreement is a dual- or multi-award and the participant is using one of the contracted suppliers, but not the Mayo supplier, the participant may stay with their current supplier and a move to the Mayo supplier may occur at the next contracting round. Product and services selection will always be considered within the context of the clinical setting and the needs of the patients.
For Med Device, the participant will continue using their contracted supplier under the tier that has been negotiated for the Captis members. If the participant’s supplier of choice has not been awarded, the Mayo/Inspirity team will work with the participant to convert to a Captis-awarded supplier.
For Direct spend categories, Inspirity participants may be attached to an Inspirity-negotiated agreement that Mayo Clinic will also access, or access the Vizient portfolio, or maintain an individual agreement that is negotiated on behalf of the customer by Inspirity.
No, Inspirity participant volume will be added to the Captis sourcing process. Captis members cannot access Inspirity agreements. Captis agreements will remain unchanged until the category is rebid or renewed. At that time, the Inspirity participants’ volumes will be added into the Captis spend total.
Yes.
Yes.
Yes.
Indirect Sourcing
Indirect (not included in direct patient care) products and services may be written on Inspirity or Aptitude paper depending on the category, dynamics, and if it enables a speed to value for multiple participants to access your products or services and eliminates multiple negotiations and RFPs.
Indirect agreements will be evaluated for performance and value within the first 12 months for a new participant joining Inspirity. The timing at which these agreements are renewed, extended, or go to RFP will be agreement dependent.
For Indirect spend categories, Inspirity participants may be attached to an Inspirity-negotiated agreement that Mayo Clinic will also access, or access the Vizient portfolio, or maintain an individual agreement that is negotiated on behalf of the customer by Inspirity. Inspirity participants will NOT join Mayo Clinic contracts.
Yes, medical capital equipment, IT capital, software and services, maintenance and repair, Facilities and Projects, and all purchase services are examples of Indirect categories.
Will the supplier be able to control contract tier assignments to Inspirity participants for Indirect contracts? If tiers exist in an agreement, they will be negotiated in good faith.
Pharmacy Sourcing
Inspirity is providing access to enhanced agreements through Captis and Vizient for Pharmaceuticals. Inspirity will work with participants to optimize NovaPlus, generics, and biosimilar products. Wholesaler and specialty pharmacy agreements, as well as pharmacy benefit management opportunities, are also included in the Inspirity services portfolio.
Inspirity is a collaboration between HumanityCorp and Mayo Clinic Supply Chain. Many suppliers have experienced how Mayo Clinic operates within the market as an individual entity and in support of other organizations as with Captis. It is Inspirity’s intent to coalesce Mayo Clinic’s experience and leading practices of committed and aggregated sourcing to a broader segment of the market.
Inspirity, operationally managed by Mayo Clinic Supply Chain, has become a member of Vizient and Captis LLC. Mayo Clinic will continue to be a shareholder member of Vizient and Captis utilizing those portfolios for Direct products, i.e., commodities, clinical preference, medical device, and pharmaceutical expenditures. Inspirity will have several portfolios that it may access (Mayo individual, Captis, Vizient, and several niche GPOs) for products used in direct patient care (Direct Products). There will be no overlapping agreements between the Captis and Inspirity portfolios related to pharmaceutical products.
Participants of Inspirity will have agreed to create a co-management agreement where Inspirity supply chain resources will provide business process improvements, systems, and functions as an extension of Mayo Clinic Supply Chain. As co-managed supply chain entities of Inspirity and as a designated agent of the participant, Inspirity will have oversight of Source-to-Pay processes, which may include signature authority to execute LOC, agreements, etc.; again, consistent with the principle of collaborating with practitioners in those processes.
Procurement and Payables
Yes, all suppliers will be required to transact on EDI through GHX: PO 850, PO Ack 855, and Invoice 810 as minimum transaction sets.
Yes, Inspirity will be paying on behalf of the customer, and the supplier Accounts Receivable team will collaborate with Inspirity Accounts Payable on invoice and payment issues.
Functioning as the contracted agent for Inspirity participants, the Inspirity central office will process, manage, and settle participant orders on behalf of the participant as the supplier of goods or services.
Based on the purchase orders from the central office, goods will be sent from your supplier warehouse directly to the participant’s current ship-to locations, where the product will be received locally by the participant. The invoice will be sent EDI and settled by the Inspirity central office.
For a transaction to be processed by the Inspirity central office on behalf of participants. It will generally be associated through Inspirity, (i.e., Aptitude, Captis, Vizient, or Inspirity agreements).
Non-contracted and locally contracted items may continue to be ordered and settled locally by the participant’s office for a period. The goal is to have all purchasing and payables transacted through Inspirity’s platform for all goods and services; however, that will not happen overnight.
Inspirity’s priority is to minimize the bill-only process through improved inventory management and ordering when possible. Unless there is a problem with your current bill-only process, it will likely not change for suppliers. Inspirity will send a copy of the Inspirity PO to the supplier representative as requested by the local office.
Orders may only come direct from the participant local procurement office if products have not been contracted through Inspirity. Contract pricing will not be set up for direct purchases and payables to order direct from the participant if it is an Inspirity-based agreement.