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Hospital CFO the Seventh Commandment for Supply Chain Professionals THOU SHALT NOT HATE THY GPO

Hospital CFO the Seventh Commandment for Supply Chain Professionals THOU SHALT NOT HATE THY GPO

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Seventh Commandment for Supply Chain Professionals THOU SHALT NOT HATE THY GPO
Seventh Commandment for Supply Chain Professionals THOU SHALT NOT HATE THY GPO

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Published by: Doc on Oct 23, 2012
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Hospital CFO

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The Seventh Commandment for Supply Chain Professionals

THOU SHALT NOT HATE THY VENDORS NOR THY GPO
September, 2012 _____________________________________________________________________________________

Supply Chain professionals know that there are several “Golden Rules” that they adhere to in their daily lives. The Seventh Commandment is:

THOU SHALT NOT HATE THY VENDORS NOR THY GPO
Too often a hospital grows so comfortable with a vendor or their GPO that they fail to realize that selling products and services is a business. When the hospital later finds out that the pricing that they have been paying over the past few years was a little (or a lot) higher than other hospitals were paying, some hospital materials managers or supply chain staffers take this personally. Do not take it personally, just do something about it. First, read the Sixth Commandment (THOU SHALT BASE BUYING DECISIONS ON
COST TRANSPARENCIES AND SYATAMITIC PROCESSES). What must be done while you friendly vendor is making excuses and developing a strategy to get you back in his good graces, is that you need to look at all purchases by your supply chain department and prioritize any cost savings analysis based on their potential savings to your hospital. A plan to fully realize targeted savings
opportunities will require multiple strategies  new and more aggressive approaches to contracting, improved contract compliance, establishment of supply formularies and formulary compliance programs, etc. All initiatives, whether pricing, changes to commodity/low-risk products, or physician preference items, need to be prioritized based on timeframe to actualize savings. Even what may appear to be “quick hit” pricing initiatives may require time to actualize. And, some pricing issues may actually require changes to physician prescribing practices. Aligning degree of change difficulty and timeframe to realize savings need to be carefully planned and monitored. There are a couple of

general rules to follow:

  

PPI items should be on local contracts because a skilled negotiator can usually negotiate a better price than the “tiered-pricing” offered though a GPO A hospital is better off purchasing its Med/Surg products through their GPO Consultants can do a better job than a small or medium sized hospital for PPI purchasing, if the Consultants are experts on cost transparencies

By: Dennis Stewart, Streamline Savings www.StreamlineSavings.com For ALL 10 Commandments, Please visit: http://www.scribd.com/doc/108781436/Healthcare-News-Information-The-TEN-10-Commandmentsfor-Hospital-and-Healthcare-Supply-Chain-Leaders

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