Tag Archives: health care costs

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Main Event Entertainment Buys 6.4 Acres at Tempe's Emerald Center

 

Main Event Entertainment purchased a 6.4-acre retail site in Tempe for $2.05M and will build a new 57,000 SF indoor entertainment venue.

The property is located in Emerald Center near Interstate 10 and Warner Road in Tempe adjacent to IKEA and Dick’s Sporting Goods. Headquartered in Plano, Texas, this will be Main Event’s first building outside of Texas where it has 12 locations.

Construction is expected to start in 2Q 2013. The freestanding building will be located at the NEC of Emerald and Commerce drives and will have more than 400 parking spaces. It lies directly south of a future 74,000 SF retail showroom called Furniture Row that is being planned for 2014. Furniture Row purchased the site in 2011 and the two new buildings will share common parking and easements.

Main Event Entertainment will attract indoor corporate and family events and offers bowling, billiards, laser tag, glow golf, rock climbing, gravity ropes, arcade games along with food and beverage services.

Dan Gardiner and Greg Laing of Phoenix Commercial Advisors represented Main Event Entertainment in the site selection process. Rick Robertson and Chris McClurg of Lee and Associates Arizona represented the seller, First National Bank of Hutchinson, Kan., in the acquisition.

The new building was approved for a use permit by the City of Tempe in June 2012 and is being designed by Hunter Engineering.

Medical supplies

Applying Supply Chain Management Techniques To The Health Care Industry

Businesses in the 21st century frequently attribute success to the ability to tame their supply chains.

The business of hospitals, in comparison, is quite different. Hospitals are service organizations with diverse customers, including physicians who have strong commitments to given manufacturers and products. Patients, of course, are customers, and their treatment often requires costly items. Because their customer base is so diverse, and because the associated costs can be high, it is increasingly important for hospitals to purchase materials at the best price possible.

One of the distinguishing characteristics of the health care industry is the prevalence of national group purchasing organizations that leverage the purchasing power of many hospitals. In Phoenix, Premier provides Banner Health and St. Joseph’s Hospital and Medical Center with strategic procurement services. Mayo Clinic is a member of Novation, giving it access to services that support standardization for expensive clinical items. Amerinet assists Scottsdale Healthcare in managing purchasing costs and improving processes.

Escalating costs
Increased costs associated with health care represent a challenge, however, it is not always clear why or where health care costs are escalating. The escalation of supply costs, frequently at greater than 10 percent annually, means that supply costs are the second-highest area for hospital expenditures after labor.

Paul Carmichael, director of materials management at Phoenix Children’s Hospital (PCH), fears that manufacturers will not continue to absorb supply-cost increases on their own. In addition, an aging population that demands a high quality of life will also drive up overall costs.

Hospitals require significant supplies. Mayo Clinic Arizona, for example, itemizes more than 100,000 products. Banner Health, which operates 22 hospitals in Arizona, reported $2.2 billion in net revenue, with supply expenses estimated at $390 million. Of this, $190 million were expended for medical/surgical supplies and $90 million for pharmaceuticals.

Doug Bowen, Banner’s materials manager, points to the challenges associated with pharmaceutical costs that now consume almost a quarter of supply expenses. Banner very strategically employs centralized control and standardized processes to optimize its supply operations. Bowen believes that Banner’s data warehouse system will disseminate best practices across the system.

Ryan Kirane is materials manager for Mayo Clinic Arizona and points with pride to the integration of the supply chain organization across the Mayo network and the subsequent supply chain excellence. In Arizona, Mayo’s net patient revenue of more than $500 million is balanced against a supply expense of approximately $125 million — signaling supply-intense procedures such as implant surgery. With pharmaceuticals making up about $45 million in expenses, Mayo echoes Banner’s concern with the cost of medications.

Each hospital faces different challenges in managing the supply environment. PCH, whose patients range from infants to adolescents, requires up to a third more products due to patient-size requirements. PCH utilizes advanced supply chain management technologies, such as “just-in-time” stock replenishment, to maintain low levels of inventory, yet excellent access to products. It has also worked with its national distributor, Owens & Minor, to utilize activity-based management principles,leading to improved product access and efficiencies. With almost $360 million in total patient revenue, PCH reports more than $62 million in supply expenses for the thousands of different items necessary to deliver care.

Solving the problem
In 2004, the Health Sector Supply Chain Research Consortium was founded at the School of Health Management and Policy at ASU’s W. P. Carey School of Business. The consortium brings together U.S. firms to solve problems unique to the health care supply chain.

Eugene Schneller, Ph.D., is professor and Dean’s Council of 100 Distinguished Scholar in the W. P. Carey School of Business, School of Health Management and Policy. He can be reached at gene.schneller@asu.edu.