Best Practices for Purchasing Managers
By Kathy Dix
Purchasing managers for the healthcare community face a unique challenge obtaining the best values possible for the healthcare facility while ensuring that patient safety and infection control issues are kept at the forefront.
John T. Mateka, FAHRMM, is the immediate past president of the Association for Healthcare Resource and Materials Management (AHRMM) and vice president, Supply Chain, MCG Hospital, Augusta, Fla. Mateka observes that purchasing managers can improve their evaluations and decisions by including a clinical value analysis expert in their choices.
This position typically works in materials management (MM); however, typically this is an RN. If this position is not in place, then a liaison is established, usually with infection control to create this link between product selection and infection control requirements, he explains. Most hospitals have a product or value analysis committee and almost if not all have an infection control representative on the committee.
Over the past five to 10 years, he adds, purchasers many from a business background have found that they lack the clinical education and information needed for product selection. In the past, product standardization committees would incorporate a contact from infection control to provide the necessary input. However, as financial margins shrunk and facilities progressed through supply reduction and cost reduction initiatives, they discovered that utilization management would enable the most savings determining what product was used, how it was used, to what extent, or if it was necessary at all.
With that developed a value analysis process wherein they took a product and would investigate its use, its intended use and investigate on whether or not it was delivering the value it was supposed to deliver based on the cost of the product, Mateka recalls. What they found is that the best person to do this would be a clinical RN, perhaps with some business classes or degrees. Many hospitals are incorporating those into their procurement supply chain materials manager processes. Now they have a clinician on staff whose role is to preview and coordinate the evaluation and determination of products either through their own expertise or that of their peers in the nursing or clinical community. They can go to the nursing director, clinical care director, OR director, and be able to discuss clinical issues relative to product consideration.
The full-time position creates economy because the utilization study can determine if a product is being used incorrectly, for example. Working with the entire supply chain team, many times this manager can save more than their own salary annually, thereby justifying their own position, improving product selection and creating a win-win situation.
Harkening back to the advent of safety needles and needleless products, Mateka recalls that the infection control department was utilized to help evaluate which products were best; education committees were also involved. The best procedure is simple, he says The best practices are those liaisons and product committees and evaluation committees, who have set up a standard such that all new products must go through this committee. Thats where they position a number of folks the clinical, nursing, education folks, all the entities needed to have their input on an ultimate selection of a product. Some of it moves through quickly. Something like one-inch adhesive strips, theres not a lot of study on, but some are complicated things. Those things get tied back into the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) and other regulatory agencies on what theyre dictating we need to do or dont need to do.
Small facilities with few resources to support a full-time clinical RN position or a large committee must make do; they may form a committee of two, composed of the infection control person or nurse administrator and the purchasing agent; however, that is not the case everywhere. There are some purchasing agents that do have a clinical background, but because of the business nature of the procurement side, 80 percent of what theyre doing is contract negotiations, logistics management, things of that nature, says Mateka. Its important to have a business background, and if they dont have a clinical background, then you develop those liaisons and partnerships to ensure that you select the right safe product.
Both fields are very sophisticated studies, and both very concentrated in what they do, but theyre two different studies, business and clinical. There are some RNs who have gone on to get an MBA. Some business procurement agents engage in studies. All of them must have an awareness and understanding of safety regulations, and of regulatory mandates and Joint Commission mandates, but its far easier to form a team to get that complement than to have one person do it all, he concludes.
Susan Kreiss, FAHRMM, is president of AHRMM and manager of contract administration at Bon Secours Health Systems, which includes 18 hospitals in nine states. Kreiss role as contracting manager requires her to negotiate and write contracts for the medical/ surgical departments. Previously, she was director of materials management for the Hospital for Special Surgery.
In that position, Kreiss was involved with two major initiatives with infection control; one involved transitioning to reprocessing items rather than utilizing only single-use items. It saved us a lot of money; it was a major project that involved cooperation between purchasing and infection control and the OR, and it saved hundreds of thousands of dollars, she recalls. Of course, we had to be aware at all times of what infection controls needs were, and whether they were being met by the reprocessing company. That involved site visits to the reprocessing company, due diligence as far as their reputation went, checking references, and dealing with bioburdens for infection control and making sure they were met.
The second project focused on bloodborne pathogens and sharps safety. I co-chaired a committee with our infection control director who was a nurse, and we basically tackled each one of the products that had a potential for somebody getting an injury, whether it was an IV needle or a syringe, a scalpel, even sutures. We brought all of the products we were looking at to the product utilization committee, which met monthly.
However, sometimes it is difficult to get staff to change and accept a new product, Kreiss recalls. These products require some sort of active change on the part of the nurse, such as the pressing of a button to activate a cover for a needle. We finally purchased an item that you had to hit on a hard surface to activate the safety device, but thats what they liked the best.
Another challenge is obtaining a consensus on clinical preference throughout the committee. At the Hospital for Special Surgery, anesthesiologists liked a safety IV needle different from the one the nurses liked, so we bought both, she explains. The lesson to be learned from the whole experience is that these decisions have to be made in a committee or a group, because you just cant (as a purchasing manager) look at a product, decide you need a safety product to substitute, and willy-nilly go ahead with it. Any good purchasing professional today has to be aware of the whole safety issue, because now OSHA has become even more involved in the issue and has mandated that safety products be used at hospitals unless no product exists that is a safety product or there is a total consensus that the safety products will impair patient care.
The 2000 Federal Needlestick Safety and Prevention Act details requirements for employers to identify, evaluate and implement safety-engineered medical devices. It requires the maintenance of a sharps injury log and mandates involvement of non-managerial employees in evaluating safety devices.1
According to the OSHA Web site, Devices must be selected based on employee feedback. They must be evaluated for appropriateness for each procedure and effectiveness in preventing occupational exposures to blood and other potentially infectious materials (OPIM). If the availability and variety of devices is restricted, the employer may be in violation of the requirements: (1) to review and update the exposure control plan to reflect changes in technology that eliminate or reduce exposure to blood and OPIM; (2) to review and update the plan annually, documenting the consideration and implementation of appropriate commercially available and effective safer medical devices designed to eliminate or minimize occupational exposure; and (3) to use engineering controls to eliminate or minimize employee exposure.
Remember, selecting a safer device based solely on the lowest cost is not appropriate. Selection must be based on employee feedback and device effectiveness. OSHA compliance officers have issued citations to employers at facilities that were not using effective engineering controls because of the product availability limits of their purchasing contracts. Again, if during an OSHA inspection, it is determined that an employer did not evaluate and select appropriate and effective devices, the employer may be cited. In an effort to best serve the safety and regulatory needs of their clients, group purchasing organizations (GPOs) should offer a variety of different safer devices.2
Kreiss points out that the decision must be hospital-based, not corporate, so her role is to assist the hospitals in getting the best prices for safety items. When the OSHA regulation came out, thats what really started off the project here at Bon Secours. Everybody immediately wanted to comply. This involved looking at all of the products that we had, that were not only just on the shelves of the hospital but in the custom packs and in the standard packs.
Purchasing managers sometimes limit their reading to materials management-related publications, but Kreiss says that does not offer the specifics on infection control and other patient- and employee-safety issues of which they need to be aware. I learned a lot from reading infection control [publications] and staying abreast of what was concerning the infection control practitioners, because what concerns them should concern us as purchasing professionals, she says.
A recent alert by the National Institute for Occupational Safety and Health (NIOSH) cautioned against the exposure of healthcare workers to hazardous medications. Preventing Occupational Exposure to Antineoplastic and Other Hazardous Drugs in Health Care Settings cautioned healthcare workers and their employers about administering hazardous drugs or working in areas where they are used, stating that employers should (1) implement necessary administrative and engineering controls and (2) assure that workers use sound procedures for handling hazardous drugs and proper protective equipment. These medications, which can include chemotherapy drugs and antineoplastics, can be handled with various engineering controls, but because of the cost of one control approximately $12 per patient dose many purchasers balk at the cost, especially because it is used for worker safety, not patient safety, and is therefore not reimbursed.
We do end up talking with a lot of people about the merits of one product versus another. So often the real decision doesnt seem to be made on the merits of the product; if its a material control decision, its made on price alone or its made on access, says Marian Robinson, vice president of marketing at Baxa Corporation. Baxas products focus on the safe handling of liquid medications in the hospital environment and the safety issues affecting the pharmacy employees and nurses who handle liquid meds.
Baxa is fortunate to be on all the major GPO contracts, but if I talk to other medical device manufacturers who are not, even if their product is outstanding, it can be difficult to get purchased, she observes. One hurdle is, how do you get noticed by the committee that makes the new product decision? And how do you make sure they understand the difference between yours and a competitive product?
There are many obstacles to getting a product out there. Its not a simple I sell the product directly to the hospital. I go and talk to the users about it, but my product has to be accepted on a GPO award, so its on a most favored product status. Then it has to be stocked at the wholesaler, which isnt automatic; someone has to essentially force that through. Then I have to make sure everybody has visibility to the right pricing, and is stocking at the right levels, so when my customer wants it, they get it. Its not just that I find out about the best product, I place an order, and the next day Im using it on the floor, says Robinson.
In the past, pharmacists were the decision-makers in the purchase of medication safety products; however, over time, more decisions are made by purchasing managers, who are not directly involved with the clinical side. Now we have two call points. First we have to explain why youd want to buy the product and why its better to the users, then convince purchasing that its worth the money, she adds.
In Robinsons experience, many purchasing managers are not aware of the clinical issues and which products are best for patient or worker safety. The best purchasing managers, she says, are listening to their constituency. Theyre really trying to do whats right for the user and ultimately the patient, but in some cases, its much more of a hard line If that products ten percent more, work around it if its not the best one.
The product Baxa offers, PhaSeal, is a system that is different from what is typically used in delivering chemotherapy drugs in some centers. Youre adding product to a practice in which most people are getting by without using an auxiliary product. No one is trying to contain the contamination; theyre basically allowing a certain level of contamination to exist. That contamination was widely publicized in a NIOSH alert in March 2004. Weve been able to prove that you essentially eliminate that contamination with these fluid drugs by using PhaSeal, but we still meet resistance from people who say, I can do pretty well by being careful and dont need your product because its an additional cost, says Robinson.
Part of the issue is because it protects the worker and isnt used specifically to protect a patient, it isnt reimbursed. You have to absorb the cost of doing that as part of your business, and the reality is, unless you are sued by a worker for the impact of that contamination its been proven to cause miscarriages, birth defects, other auxiliary skin rashes, hair loss I think some hospitals just choose to accept that as part of the risk of doing business, as opposed to saying, These people work here; we owe it to them to keep their environment safe.
Some purchasers at larger cancer centers have adopted the product, but other purchasing managers at freestanding clinics owned by doctors will not, because the cost comes directly from the centers profit margin. Its much more difficult than absorbing it in a greater hospital environment. Theyre not any less prone to lawsuits, but its just a different kind of environment and certainly a different level of profitability, she adds.
Baxa focuses on education of the end users and risk managers, but has not developed an education program for purchasing managers. Some hospitals have pharmacy purchasing agents, and sometimes those people are former technicians, so they are aware of whats going on. But in some hospitals, its a purchasing discipline instead of an application discipline, and I think those people are more focused on accounting functions than practice-type functions, so they may not know the distinction between one catheter and another, or between one safety product and another, and they probably dont know why its better to use one type of shielded needle versus another, Robinson states.
Judy Cline, director of microfiber cleaning at Rubbermaid Commercial Products, has had a different experience with purchasers; many have embraced microfiber cleaning as a method to reduce cross-contamination and workers compensation for ergonomic injuries related to the weight of a wet mop. The hospitals incorporating this system utilize one mop pad per patient room, specifically to eliminate cross-contamination, then place the pad in the laundry bag for that room. Some facilities are adopting this process because they anticipate eventual JCAHO guidelines advocating one mop pad per room.
When asked if purchasing managers are well-informed as to infection control issues in their facilities, Cline responds, Yes, its absolutely critical. Theyre very sensitive to the needs of the infection control group. The folks Ive dealt with in the environmental services area are wildly sensitive to the needs of the infection control department and group. Its just top of mind.