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Best Practices for Purchasing Managers
By Kathy Dix
Purchasing managers for the healthcare community face a uniquechallenge obtaining the best values possible for the healthcare facilitywhile ensuring that patient safety and infection control issues are kept at theforefront.
John T. Mateka, FAHRMM, is theimmediate past president of the Association for Healthcare Resource andMaterials Management (AHRMM) and vice president, Supply Chain, MCG Hospital,Augusta, Fla. Mateka observes that purchasing managers can improve theirevaluations and decisions by including a clinical value analysis expert intheir choices.
This position typically works in materials management (MM); however, typically this is an RN. If this position is not inplace, then a liaison is established, usually with infection control to createthis link between product selection and infection control requirements, he explains. Most hospitals have a product or valueanalysis committee and almost if not all have an infection controlrepresentative on the committee.
Over the past five to 10 years, he adds, purchasers manyfrom a business background have found that they lack the clinical educationand information needed for product selection. In the past, productstandardization committees would incorporate a contact from infection control toprovide the necessary input. However, as financial margins shrunk and facilitiesprogressed through supply reduction and cost reduction initiatives, theydiscovered that utilization management would enable the most savings determining what product was used, how it was used, to what extent, or if it wasnecessary at all.
With that developed a value analysis process wherein theytook a product and would investigate its use, its intended use and investigateon whether or not it was delivering the value it was supposed to deliver basedon the cost of the product, Mateka recalls. What they found is that thebest person to do this would be a clinical RN, perhaps with some businessclasses or degrees. Many hospitals are incorporating those into theirprocurement supply chain materials manager processes. Now they have a clinicianon staff whose role is to preview and coordinate the evaluation anddetermination of products either through their own expertise or that of theirpeers in the nursing or clinical community. They can go to the nursing director,clinical care director, OR director, and be able to discuss clinical issuesrelative to product consideration.
The full-time position creates economy because the utilizationstudy can determine if a product is being used incorrectly, for example. Working with the entire supply chain team, many times thismanager can save more than their own salary annually, thereby justifying theirown position, improving product selection and creating a win-win situation.
Harkening back to the advent of safety needles and needlelessproducts, Mateka recalls that the infection control department was utilized tohelp evaluate which products were best; education committees were also involved.The best procedure is simple, he says The best practices are thoseliaisons and product committees and evaluation committees, who have set up a standard such thatall new products must go through this committee. Thats where they position anumber of folks the clinical, nursing, education folks, all the entitiesneeded to have their input on an ultimate selection of a product. Some of itmoves through quickly. Something like one-inch adhesive strips, theres not alot of study on, but some are complicated things. Those things get tied backinto the Joint Commission on the Accreditation of Healthcare Organizations(JCAHO) and other regulatory agencies on what theyre dictating we need to door dont need to do.
Small facilities with few resources to support a full-timeclinical RN position or a large committee must make do; they may form acommittee of two, composed of the infection control person or nurseadministrator and the purchasing agent; however, that is not the caseeverywhere. There are some purchasing agents that do have a clinicalbackground, but because of the business nature of the procurement side, 80percent of what theyre doing is contract negotiations, logistics management,things of that nature, says Mateka. Its important to have a businessbackground, and if they dont have a clinical background, then you developthose liaisons and partnerships to ensure that you select the right safeproduct.
Both fields are very sophisticated studies, and both veryconcentrated in what they do, but theyre two different studies, business andclinical. There are some RNs who have gone on to get an MBA. Some businessprocurement agents engage in studies. All of them must have an awareness andunderstanding of safety regulations, and of regulatory mandates and JointCommission mandates, but its far easier to form a team to get that complementthan to have one person do it all, he concludes.
Susan Kreiss, FAHRMM, is president of AHRMM and manager ofcontract administration at Bon Secours Health Systems, which includes 18hospitals in nine states. Kreiss role as contracting manager requires her tonegotiate 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 majorinitiatives with infection control; one involved transitioning to reprocessingitems rather than utilizing only single-use items. It saved us a lot ofmoney; it was a major project that involved cooperation between purchasing andinfection 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 infectioncontrols needs were, and whether they were being met by the reprocessingcompany. That involved site visits to the reprocessing company, due diligence asfar as their reputation went, checking references, and dealing with bioburdensfor infection control and making sure they were met.
The second project focused on bloodborne pathogens and sharpssafety. I co-chaired a committee with our infection control director who wasa nurse, and we basically tackled each one of the products that had a potentialfor somebody getting an injury, whether it was an IV needle or a syringe, ascalpel, even sutures. We brought all of the products we were looking at to theproduct utilization committee, which met monthly.
However, sometimes it is difficult to get staff to change andaccept a new product, Kreiss recalls. These products require some sort ofactive change on the part of the nurse, such as the pressing of a button toactivate a cover for a needle. We finally purchased an item that you had to hiton a hard surface to activate the safety device, but thats what they likedthe best.
Another challenge is obtaining a consensus on clinicalpreference throughout the committee. At the Hospital for Special Surgery,anesthesiologists liked a safety IV needle different from the one the nursesliked, so we bought both, she explains. The lesson to be learned from thewhole experience is that these decisions have to be made in a committee or agroup, 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 withit. Any good purchasing professional today has to be aware of the whole safetyissue, because now OSHA has become even more involved in the issue and hasmandated that safety products be used at hospitals unless no product exists thatis a safety product or there is a total consensus that the safety products willimpair patient care.
The 2000 Federal Needlestick Safety and Prevention Act detailsrequirements for employers to identify, evaluate and implement safety-engineeredmedical devices. It requires the maintenance of a sharps injury log and mandatesinvolvement of non-managerial employees in evaluating safety devices.1
According to the OSHA Web site, Devices must be selectedbased on employee feedback. They must be evaluated for appropriateness for each procedureand effectiveness in preventing occupational exposures to blood and otherpotentially infectious materials (OPIM). If the availability and variety ofdevices is restricted, the employer may be in violation of the requirements: (1) to review and update the exposure control plan to reflectchanges in technology that eliminate or reduce exposure to blood and OPIM; (2)to review and update the plan annually, documenting the consideration andimplementation of appropriate commercially available and effective safer medicaldevices designed to eliminate or minimize occupational exposure; and (3) to useengineering controls to eliminate or minimize employee exposure.
Remember, selecting a safer device based solely on thelowest cost is not appropriate. Selection must be based on employee feedback anddevice effectiveness. OSHA compliance officers have issued citations toemployers at facilities that were not using effective engineering controlsbecause of the product availability limits of their purchasing contracts. Again,if during an OSHA inspection, it is determined that an employer did not evaluateand select appropriate and effective devices, the employer may be cited. In aneffort to best serve the safety and regulatory needs of their clients, grouppurchasing 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 pricesfor safety items. When the OSHA regulation came out, thats what reallystarted off the project here at Bon Secours. Everybody immediately wanted to comply. This involved lookingat all of the products that we had, that were not only just on the shelves ofthe hospital but in the custom packs and in the standard packs.
Purchasing managers sometimes limit their reading to materialsmanagement-related publications, but Kreiss says that does not offer thespecifics on infection control and other patient- and employee-safety issues ofwhich they need to be aware. I learned a lot from reading infection control[publications] and staying abreast of what was concerning the infection controlpractitioners, because what concerns them should concern us as purchasingprofessionals, she says.
A recent alert by the National Institute for OccupationalSafety and Health (NIOSH) cautioned against the exposure of healthcare workersto hazardous medications. Preventing Occupational Exposure to Antineoplasticand Other Hazardous Drugs in Health Care Settings cautioned healthcareworkers and their employers about administering hazardous drugs or working inareas where they are used, stating that employers should (1) implementnecessary administrative and engineering controls and (2) assure that workersuse sound procedures for handling hazardous drugs and proper protectiveequipment. These medications, which can include chemotherapy drugs andantineoplastics, can be handled with various engineering controls, but becauseof the cost of one control approximately $12 per patient dose manypurchasers 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 meritsof one product versus another. So often the real decision doesnt seem to bemade on the merits of the product; if its a material control decision, itsmade on price alone or its made on access, says Marian Robinson, vice president of marketing at BaxaCorporation. Baxas products focus on the safe handling of liquid medicationsin the hospital environment and the safety issues affecting the pharmacyemployees and nurses who handle liquid meds.
Baxa is fortunate to be on all the major GPO contracts, butif I talk to other medical device manufacturers who are not, even if theirproduct is outstanding, it can be difficult to get purchased, she observes. One hurdle is, how do you get noticed by thecommittee that makes the new product decision? And how do you make sure theyunderstand 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 goand talk to the users about it, but my product has to be accepted on a GPOaward, so its on a most favored product status. Then it has to be stocked atthe wholesaler, which isnt automatic; someone has to essentially force thatthrough. 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, andthe next day Im using it on the floor, says Robinson.
In the past, pharmacists were the decision-makers in thepurchase of medication safety products; however, over time, more decisions aremade by purchasing managers, who are not directly involved with the clinicalside. Now we have two call points. First we have to explain why youd wantto buy the product and why its better to the users, then convince purchasingthat its worth the money, she adds.
In Robinsons experience, many purchasing managers are notaware of the clinical issues and which products are best for patient or workersafety. The best purchasing managers, she says, are listening to theirconstituency. Theyre really trying to do whats right for the user andultimately 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 bestone.
The product Baxa offers, PhaSeal, is a system that isdifferent from what is typically used in delivering chemotherapy drugs in somecenters. Youre adding product to a practice in which most people aregetting by without using an auxiliary product. No one is trying to contain thecontamination; theyre basically allowing a certain level of contamination toexist. That contamination was widely publicized in a NIOSH alert in March 2004.Weve been able to prove that you essentially eliminate that contaminationwith these fluid drugs by using PhaSeal, but we still meet resistance frompeople who say, I can do pretty well by being careful and dont need yourproduct because its an additional cost, says Robinson.
Part of the issue is because it protects the worker and isntused specifically to protect a patient, it isnt reimbursed. You have toabsorb 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 itsbeen proven to cause miscarriages, birth defects, other auxiliary skin rashes,hair loss I think some hospitals just choose to accept that as part of therisk of doing business, as opposed to saying, These people work here; we oweit to them to keep their environment safe.
Some purchasers at larger cancer centers have adopted theproduct, but other purchasing managers at freestanding clinics owned by doctorswill not, because the cost comes directly from the centers profit margin. Itsmuch more difficult than absorbing it in a greater hospital environment. Theyrenot any less prone to lawsuits, but its just a different kind of environmentand 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, andsometimes those people are former technicians, so they are aware of whatsgoing on. But in some hospitals, its a purchasing discipline instead of anapplication discipline, and I think those people are more focused on accountingfunctions than practice-type functions, so they may not know the distinctionbetween one catheter and another, or between one safety product and another, andthey probably dont know why its better to use one type of shielded needleversus another, Robinson states.
Judy Cline, director of microfiber cleaning at RubbermaidCommercial Products, has had a different experience with purchasers; many have embraced microfiber cleaning as a method to reducecross-contamination and workers compensation for ergonomic injuries relatedto the weight of a wet mop. The hospitals incorporating this system utilize onemop pad per patient room, specifically to eliminate cross-contamination, thenplace the pad in the laundry bag for that room. Some facilities are adoptingthis process because they anticipate eventual JCAHO guidelines advocating onemop pad per room.
When asked if purchasing managers are well-informed as toinfection control issues in their facilities, Cline responds, Yes, itsabsolutely critical. Theyre very sensitive to the needs of the infectioncontrol group. The folks Ive dealt with in the environmental services areaare wildly sensitive to the needs of the infection control department and group. Its just top of mind.