Supply Purchasing: Making the Most of Your Resources

It’s not easy these days to be a supply manager in healthcare — faced with pricing and reimbursement that don’t accurately reflect true costs, purchasing managers must closely monitor their supply purchasing, use, and replacement. Balancing cost against adequate supply and patient safety is the name of the game.

Physicians all have their favorite supplies and offering individualized choice to each of them can drive costs up by keeping volumes of a particular supply low. And unless you are purchasing large amounts in conjunction with other departments or facilities, you might be losing out on volume discounts.

But healthcare workers in charge of purchasing supplies don’t have to go it alone — there are companies, software, and consultants to help guide you in the right direction.

For example, in a March 2005 article, author Derril Reeves, then executive vice president of development at Surgis, Inc., outline the top eight tactics to keep supply costs down and quality up.

“Just as a physician needs to understand your medical history before recommending the best treatment, you need to understand your purchasing history to gain control of your supply costs,” he writes.

1. “Make sure you have access to your historical purchasing data.
2. Analyze your center’s supply use.
3. Establish contracts for supplies you buy on a regular basis, and monitor contract compliance.
4. Consolidate purchasing with one vendor wherever possible.
5. Consider joining a group purchasing organization (GPO).
6. Identify items to be purchased on a consignment basis.
7. Set par levels for inventory items, and monitor compliance.
8. Always explore long-term supply costs before you buy equipment.”

It is crucial, he points out, to monitor your past costs, in order to better plan for the future. Contracts can help save money, but only if you ensure that the contractor is providing items at the agreed-on rates. And directing all (or most) of your purchasing through one vendor can also create large savings, as can working with a GPO.

“We are a member of Premier and get a group discount on all supplies,” says Lucila Delos Santos, RN, BSN, CNOR, MBA, director of the operating room (OR) at Washington Adventist Hospital in Takoma Park, Md. That is how her department gets the best value for its budget.

There are drawbacks to going with a GPO, however. “There are other ‘best value’ items in the healthcare market that we are not able to do business with because they are not members of the GPO,” Delos Santos points out. “We can go around it, but it does not make us a team player in the organization. That is the major disadvantage. On the other hand, members of the GPO have been screened to be companies in good standing in the healthcare market, which guarantees quality products and good customer service.

We know that we are not dealing with crude companies.”

“We do comparison shopping,” says Patty Cooke, RN, the nurse manager for Appalachian Gastroenterology, P.A., in Boone, N.C. They choose to use this strategy instead of teaming up with a GPO. And their facility uses a dedicated supply manager or purchasing specialist to control costs and manage inventory.

Avoiding cost overrun is always a focus. “The endoscopy department has been very conscientious of their supply expenses; they have it under control. Endo shops for the best value product without sacrificing quality of care,” Delos Santos adds.

But getting physicians and medical directors on board is sometimes a challenge — telling them that they have to restrict their choices in order to save money can be problematic. “This is a very sensitive topic — product standardization is a tedious process, but it can be attained,” she says. “It is a collaborative process. There should be a physician champion who will bring the group of users to a consensus, a nurse champion who will be an active player in the implementation process, and a tight purchasing officer who will help police the product standardization regulations.”

The OR at her facility has a purchasing officer; the endoscopy unit does its own inventory and orders what it needs through that purchasing expert.

Generally, the supply ordering process goes smoothly; on occasion, the wrong item is ordered or sent. In that case, Delos Santos says, the product is returned and the company gives them credit. “Most of the time, the company will allow us to keep the wrong product (which we cannot use, so we donate them to a charitable organization),” she adds.

Cooke also reports a smoothly running system — at one time, she relates, there was a minor incident, when the team came in to perform procedures and realized that the stock of IV fluids was depleted. “We borrowed supplies from a local IV company,” she relates, and then quickly remedied the shortage. 

www.surgicenteronline.com/articles/business_finance_and_law/558_531trategies.html    

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