Purchasing, Supply and Professional Growth
By Etta Bushong, ACSP, CRCST, CSPDT
Like so many central service (CS) professionals before me, earlier this year I found myself "re-engineered." In an era of shrinking budgets and hiring freezes, I was moved from the central supply (CS) department into the materials management or purchasing department. While my new position brought new challenges, it also provided opportunity for professional growth. The experience was a bit like going back to school, homework and all.
Having been in CS for nine years, I was familiar with purchasing minor items for distribution from this department. However, nothing prepared me for white space, evergreen clauses, LOCs and my personal favorite, "slow fat rabbits," a commonly used local phrase for items that are easily converted to contract.
First on my agenda was to systemically convert all products to our group purchasing organization (GPO). A system was set up to allow for the conversion of easy (those slow fat rabbit) products first, then incrementally introduce more complicated products over to the GPO portfolio. Categories were established to facilitate the process: OR, IV fluids, soaps and lotions, general wound care, etc. Using this approach, thousands of items were transferred into the portfolio and every contract was tracked to determine cost information.
The conversion process was a success due in part to the fact all the contracts were with nationally recognized brand names. Doctors and nurses did not feel any substandard products were brought into the hospital.
There are different ways to successfully organize purchasing processes, but there are two rules of thumb I adhere to regarding purchasing for CS: always do your homework and make the vendor your partner.
Always Do Your Homework
Research is the key to making a decision that will positively impact the hospital. Research can be reduced to a four-step process. When you receive a request to look into a new product:
1. Go to the GPO Web site and explore the contract file to see if there is an existing agreement.
2. Visit the Web site where the product is highlighted to do some basic exploratory investigation.
3. Set up a meeting with the vendor.
4. Meet with vendors of similar products.
I request that vendors either send or bring me information on their product. I specifically ask each representative to explain what makes his or her product different from the competition's.
If the product is a cleaning solution, disinfectant or sterilization product, I always request the company's scientific studies be mailed to me prior to the meeting. Although they are laborious to read, I can determine if the product was tested in their own lab or through an outside company. The report also indicates what germs were used, which reveals the product's efficacy at killing tougher organisms. (Vendors with whom I have previously transacted business now automatically send me the information.)
After research comes sorting out "the players." Send an e-mail to the main department heads in your facility asking which vendors they currently use for the specified product, what other department may be using this product, and lastly (if applicable) which doctors may be impacted by a change in product. A lot of surprises can occur with this simple e-mail. Sometimes I discover vendors no one has heard of, departments that are purchasing off contract and doctors who are using a product that will have to be converted.
Once all of the "players" have been identified, call each one to request an annual sales report sorted by hospital name. This itemized list should include the volumes they generate, the individual price, annual sales and the overall total of sales dollars spent per hospital. Compare the data; the main vendor becomes clear based on dollar amounts -- not so with niche or specialty items. Money is not always the reason to select a vendor; however, better pricing can usually be achieved by the dollars that your hospital spends -- the greater the dollars the better the tier pricing.
Research takes time, and time is precious to each of us. However, mistakes made in haste reflect poorly on you and your department, and that's a hard image to live down. Undoing mistakes is costly and an inefficient use of staff time; it's better to put time in up front.
Make the Vendor Your Partner
Every task is easier when shared and by partnering with vendors you can accomplish more. Following is a recent example from my own experience. I received a request for specialty surgical instruments by a doctor who specified a particular brand name. The quoted price for the set was $3,925. The GPO Web site provided data for instrument companies with similar products; the same instruments were priced at $3,006, a savings of $919 for the hospital. Now, how to persuade the doctor to convert to the less expensive product?
I contacted the vendor with the lowest price. Together we decided to try the instruments and, contingent upon the doctor's approval, we would proceed with a purchase. The vendor had now become my partner and had more to lose than I did. The instruments must be proved superior to the higher-priced competition. The vendor had to sell the doctor as well as the instruments.
Another way to partner with the vendor is to ask questions. Ask what makes their product different and note your own questions to ask. Usually, my questions focus on what I perceive to be product weaknesses. If I know the vendor well, I e-mail him or her the questions; if not, I wait to discuss them at our meeting. Sometimes vendors do not know the answers and a follow-up appointment must take place.
A third way to partner is to use your contacts. If another hospital is using a product your group is considering, ask for their feedback. I have captured valuable information through these calls, including examples of delivery problems, communication problems and poor sales force representation, for example. Use this information to partner with vendors.
In most hospitals, changing products requires the approval of various committees. This is the final step in the process. I usually appear with my entire folder, just in case there is a question I haven't explored. I have been out of school for a while now, but I find I still learn something new every day, even when I've done my homework.
Etta Bushong is materials manager for Bon Secours Healthcare System of New Jersey, and the Region 2 director for the American Society for Healthcare Central Service Professionals (ASHCSP).