Vendor Issues
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| Controlling vendor access to health care organizations has become a necessity for both hospitals and materials management. Security is a critical issue as is the renegade purchases that occur when a vendor rep has unmonitored contact with surgeons. Everything from the point-of-entry to making sure a rep signs out is all part of a process that can ensure greater control for the hospital. But a collaborative effort also is required—everyone from the physicians to the vendors should be informed about materials management’s protocol. |
Managing the interactions between vendors and hospital clinicians and staff personnel can be a delicate balancing act. These in-person discussions serve an important purpose, as vendors provide valuable information about new products and services that can benefit patients, lower costs and improve clinical or operational efficiency. At the same time, vendors are in intense competition for hospitals’ purchasing dollars and are well aware that broadening and deepening relationships with multiple individuals can help increase their sales.
Many hospitals and health systems are recognizing the need to assert greater control over vendors’ access and influence to ensure that their activities do not undermine their contracts, hinder smart buying decisions or cause potential problems with hospital clinicians, staffers or, most importantly, patients.
Several factors have exacerbated the need for materials managers to be more proactive about vendor management issues, including: The continuing proliferation of new products; growing concerns about patient protection and privacy; the transition of care to outpatient facilities; conflict-of-interest issues; and, of course, the high percentage of products still purchased “off-contract,” which contributes to rising supply expenses. This article will cover how materials managers can help their facilities address these challenges and play an important role in developing and implementing effective vendor management policies.
Point of entry
The hubbub of activity at our country’s largest health centers is a smaller-scale version of the throngs of people who pass through metropolitan airport terminals daily. As anyone who has flown recently can attest, one way to effectively manage such a high volume of traffic is to limit and closely monitor their points of entry, which is a cornerstone of an effective vendor management strategy.
In an ideal world, vendor representatives would be required to enter facilities through a controlled area and be immediately directed to a centralized registration point. For many large hospitals, however, this is not always logistically feasible.
At one of my former institutions, all vendors relating to materials management registered at our stat room because it was staffed 24/7. The pharmacy had its own vendor registration desk, which also was staffed around the clock. And lastly, administrative vendors, consultants and other professional service providers were directed to register in our administrative suite, except for after hours when they were to report to the materials management stat room. Because security and patient privacy were top priorities, this program also required representatives who were entering areas with invasive procedures (e.g., operating rooms, the cardiac catheterization lab or central sterile) to wear scrubs of a different color than those worn by the staff. By making it easy to identify these individuals as vendor representatives, managers in these areas were better able to monitor and limit where they were allowed to go.
Other hospitals are taking this idea a step further by making vendors wear color-coded badges with photo identification throughout their facilities.
Materials managers play a crucial role in facilitating the interdepartmental cooperation needed to implement effective access control strategies. They should take the lead in bringing together key stakeholders (e.g., pharmacy, invasive area department managers, safety and security, infection control, etc.) and educating them on how the policy will work. It’s also important to emphasize the specific benefits of such a program, both to the hospital and individual managers. These include better security; improved patient privacy, safety and satisfaction; higher levels of staff productivity; and greater compliance with contracts and contracted vendors.
During this collaborative process, materials managers also should solicit input from the group to make certain any changes do not adversely impact the organization’s operational effectiveness.
More technological options
Other hospitals in the vanguard of vendor management are finding new Web-based services to be especially useful for real-time control of vendor access. The UHC Novation contract, for example, has agreements with four such service providers: RepTrax, Status Blue, VendorClear and Vendormate.
Instead of having registration books that only confirm that a vendor has signed in, materials managers who use these products have numerous online tools that let them view vendors’ scheduled appointments and monitor their comings and goings throughout the hospital. Notable features and benefits of technological vendor management tools include:
- Provides centralized calendar software that gives administrators and staff varying levels of access and functionality
- Prints out color-coded security badges at security checkpoints
- Checks to make certain vendors have the documented credentials (e.g., immunization records, proof of insurance, training certifications, etc.) needed to comply with standards set by the Joint Commission, CDC, AORN or other organizations
- Electronic registration that captures detailed information on whom vendors are seeing, the place and anticipated length of their appointment and what they are selling
- Delivers real-time information on whether products have been awarded a competitively bid GPO or local contract.
This last feature can be especially valuable in enabling materials managers to practice proactive cost control.
For example, if they see an appointment scheduled for a vendor’s product that is not included in any agreement but is comparable to other contracted products, they can talk to the hospital representative before the meeting takes place. This not only could eliminate a costly purchase, but also helps personnel avoid wasting their time on unnecessary meetings.
Put policies into practice
Although technology can give managers actionable intelligence on real-time vendor activities and greatly reduces burdensome paperwork, it is only a tool. The actual foundation for effectively managing complex vendor relationships rests on two familiar pillars: policies and people.
The best policies recognize the need to balance various parties’ oft-conflicting needs and goals without compromising patient care or safety.
They also explain in simple terms why this is so important to the hospital and clearly define the responsibilities for vendors, staff and clinicians. We’re all familiar with policies that are brilliant on paper but crumble to dust in the real world. The key to successfully executing a vendor management program is getting buy-in from all its participants—physicians, nurses, clinical and administrative personnel and vendors. Materials managers should start to assemble within their organization a broad representation of these key stakeholders, starting with pharmacy, nursing and surgical services as these represent the highest traffic areas for vendor solicitation activity.
In addition, executive leadership has to be committed to the initiative. The program needs a hands-on, take-charge champion who not only will handle the day-to-day missteps and flare-ups, but also will continually reinforce the importance of policy compliance.
If budgets allow, materials managers might consider hiring a full-time vendor liaison to fill this role.
Vendor education on the policies is paramount and must include candid discussion of the ramifications for noncompliance, up to and including temporary or permanent barring from the hospital campus. Many hospitals offer vendor training programs that include review of the policies, any required health screening and vendor representative identification. The cost for these programs is most often born by the vendor attendees seeking access to the hospital. Though the vendor training fees do not result in a significant revenue stream and the hospital’s margin won’t be made off them, they do offset the costs of operating a more stringent vendor management program.
Another important part of policy implementation is staff education. Since many of these personnel work directly with vendors, they need to be aware of basic guidelines regarding vendor meetings, how they can help control vendor access and other policy issues such as gifts and food. Many hospitals are moving away from allowing vendors to provide any type of gift, including pens and notepads.
Others establish levels or thresholds based on overall market value of the items, such as nothing over $50. And still others establish practices that benefit overall hospital operations, not individuals.
For example, one hospital allows food to be provided at staff meetings and educational events only if the vendor purchases the food through the hospital’s catering department.
Whether food and other nominally valued gifts create preference or favor is a long debate. But the fact is, if materials managers truly aspire to set a level field for all vendors, and remove even the appearance of favor, complete elimination of gifts and food is the future.
Regardless of the approach the hospital takes, ongoing education and reinforcement with all staff is critical.You might want to think of these staffers as your “neighborhood watch group,” the on-the-scene eyes and ears of your program who can immediately rectify minor policy violations and bring more serious transgressions to your attention.
Balance and preparation
In this age of heightened concerns about security, patient privacy and public trust, hospitals are focusing greater attention on how to gain more control over vendor activities, particularly with regard to their access to hospital personnel. Because materials managers often are the primary conduit to most vendors, many are taking the lead in managing these fluid, multifaceted relationships. By working closely with key stakeholders, taking advantage of new tools and educating the staff and vendors, materials managers can help their facilities assert this control. When everyone understands and complies with clear, reasonable policy guidelines, an effective vendor management program streamlines interactions, which is a win-win for all participants.
John Cunningham is vice president, supply chain, for University HealthSystem Consortium, Oak Brook, Ill.
This article first appeared in the September 2007 issue of Materials Management in Health Care.
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