Under the 10-year agreement, which becomes effective today, Broadlane takes responsibility for much of Kaiser Permanente's contracting and group purchasing services, which is expected to result in significant savings for Kaiser Permanente's 35 hospitals and multiple other healthcare delivery sites in 11 states and the District of Columbia. Those savings will come from Broadlane's supply chain expertise as well as from combining Broadlane's existing customer purchase volume with that of Kaiser Permanente. Both Broadlane and Kaiser Permanente are noted in the industry for the high degree of compliance they are able to demonstrate with supplier contracts.
High compliance is one of the key elements that leads to lowest-possible pricing.
Since signing an agreement in principle with Kaiser Permanente in December, our two organizations have been working very smoothly in preparation for this important day. Under the agreement, Broadlane is opening an office in Oakland, Calif. where Kaiser Permanente's national office is located. That office will be staffed by Broadlane employees, some of whom have been hired from Kaiser Permanente. In addition, Kaiser Permanente will be given two seats on Broadlane's Board of Directors. Hummel, senior vice president, National Contracting and Purchasing for Kaiser Foundation Health Plan Inc. and Oliver Goldsmith, M.D., medical director and chairman of the board for the Southern California Permanente Medical Group, are expected to be elected to those seats.