Supply Purchasing: Best Practices for the GI Suite

"Ihave spent the last 14 years of my career providing various consulting services to gastroenterology (GI) healthcare providers, and I am reminded every year just how big of an issue this is,” says Nancy Vacante, RN, BSPA, senior manager of business development for Olympus America Inc. “Obviously, equipment decisions play a huge role in the clinical and financial impact in endoscopy units. Here are a couple of issues that you might consider.

“For new facilities, it’s never too early to start the equipment planning process. It needs to start even before site selection or architectural plans,” she asserts. Also consider the value of hiring equipment planners, she suggests. “It’s always an option to consider, but it may not be needed if you’re working with the right development consultant. There are lots of pros and cons here.

“For big-ticket items such as endoscopes and stretchers, try it before you buy it. That is a huge issue here. I see way too many units buying the ‘big stuff’ without proper demos or trials,” adds Vacante.

Group purchasing organizations (GPOs) are certainly a consideration as well. “There are absolutely big opportunities here. Even the ‘small guys’ can take advantage of group discounts, either by joint venture (JV) agreements with local hospitals or online groups that cater to smaller centers. A good consultant can guide you here.”

And flexible storage areas are also an option for the GI suite. “Design your units with the ability to adapt storage areas to the ever-changing clinical environment. Think about how we used to store biopsy forceps (unwrapped, hanging from hooks), and now we need ample shelf space for packages of disposables. (I know I’m dating myself here, but you know what I mean.) Think about how our units might look if we ever go to disposable scopes! Units that have designed storage areas with things such as movable shelves/tracks will be much better positioned to adapt to these changes,” she declares.

Manufacturers need a great deal of guidance from the hospital or endoscopy center when they are assisting the facility in choosing the products that are right for them. “The biggest mistake I see here is that too much emphasis is placed on the specs of the equipment item being considered,” says Vacante. “While specs are important, I think the better approach is to tell the manufacturer other things such as volume, physician practice patterns and preferences, market projections, etc. Only after understanding the ‘big picture’ can the manufacturer’s representative best advise you. A good rep will want to be your advocate, and knowing these details will help.”

Also considering purchasing outright vs. a lease. This issue applies mainly to capital equipment, however. “Each unit should consider this decision carefully,” she adds.

Healthcare growth is another item to take into account. “The American College of Healthcare Executives (ACHE) conference in Chicago last year stated that we are currently on the edge of the biggest hospital building boom in history. $16 billion was spent in 2004, and the projections are that we will see this increase to $200 billion in the next 10 years,” she points out. “There is overwhelming evidence and support for dramatic changes in the design of new units, and equipment planning will play a pivotal role here.”

Vacante references the “Pebble Project,” a joint research effort that emphasizes that purchase decisions should be driven by evidence-based outcomes approach rather than a cost issue. “If this is done, the long-term cost is better anyway,” she observes.

“What I see is that as healthcare dollars get squeezed, we are losing touch with this. I am hopeful that initiatives such as the ‘Pebble Project’ will put us back on track to real patient-centered, outcome-driven equipment decisions.”

“When a pebble is tossed into a pond, it creates a ripple effect,” says the Center for Health Design’s Web site. The Center for Health Design is a nonprofit research and advocacy organization; the Pebble Project research program began with San Diego Children’s Hospital and Health Center in 2000. “By providing examples of healthcare organizations whose facility design has made a difference in the quality of care — as well as their financial performance, the Pebble Project is already creating ripples throughout the healthcare community,” the site adds.¹

Mike McNaughton is vice president of healthcare services at Olympus America. His healthcare services group has a different perspective on purchasing, as they handle corporate relationships with GPOs. They also maintain relationships with independent delivery network (IDN) corporate boards.

In terms of purchasing decisions he says, “From a macro level, where we come in is we try to find those areas where we can enhance the value of their current agreements at that GPO level by enhancing those at the IDM level, based on commitment levels. When it gets to the decision-making process, we’re just setting the table; the actual decisions are made by clinicians, materials people, and finance people. It’s important that if you look at it terms of total cost of ownership vs. the price on that widget, you get a heck of a lot more value. It can be something as simple as what type of financing agreement they can negotiate for the life cycle cost of the equipment.”

Of course, the purchasing decision is made by clinicians, materials managers, and other staff of the healthcare facility, but, McNaughton points out, “what we do in our group is try to set the stage, so to speak. If they look at it from a total value perspective, we can provide that if they’re willing to look at it through the corporate IDN program. It’s kind of like a family relationship — the GPO is the parent, and the kids are IDNs, and those are made up of individual facilities, such as hospitals and ambulatory surgery centers (ASCs).”

Debbie Woodring, RN, BSN, is the assistant director of endoscopy for Annie Penn Hospital in Reidsville, N.C., one of several hospitals in the Moses Cone Health System. A little over one year ago, all the GI labs within the health system decided to create a purchasing evaluation group — called the GI Value Analysis Team.

“In this committee I sit on for Moses Cone, we get together and discuss price, quality and safety regarding purchases for the endo department,” Woodring says. “Those three issues have come up and typically, price has not been the determining factor. Of course, it’s important, but quality and patient safety are what what we focus on. We try to find the best quality for the best price.”

The team, which meets once a month, has representation from all five hospitals within the system. “We try to standardize as much as possible, because the more you standardize, the more purchasing power you have,” she adds. “In fact, we will be meeting tomorrow. We have started out looking at small things first. We first formed the committee a year ago. We already have standardized cleaning brushes and bite blocks throughout the system. Generally, we have had several vendors send us samples and let the staff try them. We went with the best quality and negotiated price with the vendor we chose. We are part of Novation (the group purchasing organization), and that representative from Novation also sits on our committee.”

Most of the time, Woodring says, “We tell her what we would like to try, they contact the vendors, have several samples brought in and they (Novation) negotiate the pricing. When I have specialty items I’m interested in, I’ll contact them, say, ‘We want to try this,’ and they negotiate the price on those things. For that price negotiation, we have contract administration at Moses Cone and they handle all that.”

Woodring is typically the originator of the new product trial, she says. “I’ll usually initiate it, or I’ll have a vendor who has brought something in I want to try.”

The representatives from each hospital’s GI lab include those labs’ directors and assistant directors, as well as two people from the health system’s contract administration department, and the Novation representative. “It’s been slow, getting going, but we all have the same goals in mind, so we’re able to make some small steps,” Woodring asserts. “Our goals are to eventually go for the high-priced specialty items, many of which are physician-driven. Some physicians like Boston Scientific, some like Wilson Cook, etc., so trying to get their buy-in with one specific company is the challenge — it would save on our bottom line, because we could get better pricing if all the labs were using the same products.”

The physicians have their own group, and Woodring — along with several colleagues — will present their own suggestions to the physician group once a month.

“We work with the physicians to get buy-in from them. At the end of this month, we’ll be meeting again — we picked three different vendors, so we will present pricing and usage, and have the physician do the trial of the different products. Our ultimate goal is to standardize as much as possible without compromising quality and safety. We met with the physician group last month to present what our goals are, and the physicians asked to get some information from the three vendors chosen — pricing and average use from our labs. They want to know who is using what, how much of it they’re using, and how much it costs. We will give them that information at the end of the month and the process will move forward a little faster. We’ve already made purchasing decisions regarding the items they don’t have to use — such as bite blocks, cleaning brushes, and enzymatic cleaners — but now we will be talking about snares, forceps, etc,” she says.

“We talked about having doctors on the GI Value Analysis Team, but there were several different opinions. We felt that having them sitting with our group, we wouldn’t get as much accomplished as we would without them, so instead, a few of us come to their meeting and present. After thinking about our big group with all those physicians joining in, we realized it was probably a waste of time,” she quips.

1. www.healthdesign.org/research/pebble

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