Shared food services. Group food purchasing: a status report.
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Economics, Hospital↗
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[Nurses in the reference group for purchasing questions].
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Purchasing, Hospital↗
Public health, communicable diseases, and managed care: Will managed care improve or weaken communicable disease control?
BACKGROUND: Several changes can be anticipated in the practice of communicable disease control as a result of the health care delivery system's transition from a predominantly fee-for-service system to a predominantly managed care system. These changes will clearly involve clinical services provided by public health agencies, such as immunizations and diagnosis and treatment of tuberculosis and sexually transmitted diseases, as well as those that do not involve direct patient care, such as public health surveillance, disease investigation, outbreak control, contact tracing, public health laboratory services, and health education. METHODS: In this paper I review the potential impact of managed care on each of these areas of communicable disease control and suggest strategies for minimizing adverse effects and maximizing potential areas of cooperation. RESULTS: Examples of successful strategies include California's Medi-Cal managed care expansion, which allows local public health agencies to bill managed care organizations for the sexually transmitted disease, immunization, and confidential HIV services they provide to managed care beneficiaries. A different strategy is illustrated by the Pacific Business Group on Health, an employer-based purchasing group, that uses purchasing power to standardize the clinical preventive services benefit across all plans with which it contracts and to promote immunization goals. CONCLUSION: This analysis and these examples suggest that the emergence of managed care as the predominant form of health care financing and delivery in the United States offers an important opportunity for public health.
California↗
What's your GPO IQ?
Group purchasing organization agreements control costs through high-volume purchasing and large-member negotiation, but you can still purchase products off contract.
Contract Services↗
Planning and coordinating pharmaceutical purchasing.
The planning and coordination of the pharmaceutical purchasing process are discussed. Planning for pharmaceutical purchasing should begin with decisions regarding why a purchasing policy is needed, what the institution's purchasing policy will be, and what departments will be involved in purchasing. General goals of purchasing and procedures for revising purchasing functions are presented, and the role of the pharmacy department, materials management, and other hospital departments in purchasing is discussed. Coordinating input on purchasing decisions from medical staff, administration, and clinical and technical pharmacy personnel to achieve purchasing goals and objectives is discussed. A well-designed pharmaceutical purchasing system provides for planned and scheduled purchases, competitive bidding, product standardization, group purchasing, information sharing, internal accountability, and quality assurance.
Hospital Departments↗
An analysis of 1986 drug procurement practices in hospitals within the United States.
The purpose of this study was to statistically answer a set of predefined objectives concerning pharmaceutical procurement. The key indicators were assumed to be cost per patient day and turnover rate. Of the 5,911 surveys mailed, 709 surveys were returned for a 12% response rate. The following statements were based on attempts to answer the six predetermined objectives. Pharmaceutical purchasing is controlled by pharmacy departments to the extent that comparisons to pharmaceutical purchasing by materials management departments was not possible. Prime vendor purchasing is the procurement method of choice. Competitive bidding through a group process is so popular that a valid comparison to nongroup bidding could not be accomplished with the results of this survey. Certain variables of group purchasing such as group age, contract adherence, and volume commitment, do not appear to be correlated to purchasing outcomes in this study. When comparing government to private hospitals, the private sector seems to have an advantage in managing turnover rates. Cost per patient day results were less conclusive. As single and multiple hospital systems were compared for purchasing outcomes, the results were not totally conclusive. Although, multiple hospital systems had a significantly higher turnover rate. Finally, a comparison based on the use, or lack of use, of prime vendor arrangements demonstrated interesting results. The duration of contract did not significantly affect the purchasing outcomes. Other hospital variables such as size, type, ownership, and organization, demonstrated notable trends. The importance of examining hospitals based on case mix and mission seems to be most important. Also, the ability to relate purchasing outcomes with formulary management strategies needs further study before conclusive statements can be adopted.
Contract Services↗
The integrated supplier: key to cost management and multi-franchise capitation contracting.
Capitation...most healthcare providers do not work under it, comprehend it, or even want it, yet supply capitation contracting seminars are popping up everywhere creating the feeling that the bandwagon is leaving, and it might be time to get on board. Not true. Supply capitation is not for all organizations. Capitation contracting is not easy and there are not many successful models to help the uninitiated. If a panacea is sought for reducing supply costs, capitation is only one component of a systematic strategy to reduce materiel costs. This article suggests a direction using the Group Health Materiel Management (Group Health Cooperative of Puget Sound, WA) experience as a point of reference. It advocates a systematic approach that focuses on expense reduction in: cost of goods, holding cost of inventory, labor cost associated with all materiel processes, distribution cost (transportation and par stock pick, pack, and replenishment), product utilization, variation in product standards, and waste stream byproducts. At Group Health (GH) these issues are primarily addressed through the use of: information systems, supplier certification/selection processes, group purchasing compliance, supply channel management, supply capitation contracting programs, standardization, and utilization management. Because of managed care organizational structure, Group Health Cooperative supply capitation contracting, as performed at GH, is discussed not as a quick fix solution but in the spirit of sharing our experience with others who may be considering it as a cost savings tactic in the context of a broad-based materiel management strategy. This article highlights the experiences of GH beginning with materiel management's business process assumptions toward multiple-franchise supply capitation.
Capitation Fee↗
Responsible choices for achieving reform of the American health system.
"Responsible Choices" identifies the actions the private sector and government should take to improve the American health system and accelerate and expand the health care revolution that is already underway. Policy proposals are made for: Medicare; Medicaid; reforming the tax treatment of health insurance; insurance reforms and expanding group purchasing opportunities; and improving the availability of comparative information on health benefit offerings, quality accountability, and cost and coverage information. The recommendations refocus the Jackson Hole Group's original managed competition proposals contained in "The 21st Century American Health System" (1991).
Employee Retirement Income Security Act↗
GPOs need new policies and strategies.
Hospital and health care system CEOs who sit on the boards of the industry's group purchasing organizations must make some major changes in how GPOs are governed and operated.
Cost Savings↗
Effective alliance--hospital partnering: beyond price.
By looking beyond alliances and groups as simply a "vendor" of group purchasing contracts, a hospital can realize significant additional value beyond acquisition price. Doing so takes an attitude conducive to partnership on both sides. When this occurs, the value delivered from these services can often exceed the savings from the group contracts themselves.
Commerce↗
Hospital guidelines for use of low-molecular-weight heparins.
OBJECTIVE: To describe the development of guidelines for initial use of low-molecular-weight heparins (LMWHs) and other anticoagulants in acute-care hospitals that are part of a national group purchasing organization (GPO). DATA SOURCES: A systematic literature search (1970-December 2001) was conducted to identify evidence on the efficacy of various anticoagulants for initial therapy in deep-vein thrombosis and pulmonary embolism, and in treatment of acute coronary syndrome. A group consensus method was then used to develop guidelines. Guidelines were reviewed and revised by an internal expert panel as well as an external expert panel. Final guidelines were disseminated to GPO members and assistance was provided with implementation at the local level. RESULTS: The final set of guidelines is described. The guidelines are organized based on recommended therapeutic options for each indication. For each option, consensus opinion is provided on the level of evidence that exists in the literature, comparisons of cost and convenience, and additional dosing information. The guidelines were disseminated along with supporting material to interested GPO member hospitals, and teleconferences were held to facilitate implementation at the local level. The guidelines were initially implemented at 18 hospitals across the country. CONCLUSIONS: The process by which these guidelines were developed, plus the final set of guidelines, may be useful to hospitals and healthcare systems contemplating or engaged in a similar effort with this class of drugs.
Anticoagulants↗
Opportunity costs associated with long decision making.
In certain cases, prompt utilization of an already negotiated group purchasing agreement will save a hospital more money than bidding out the same products. This occurs because there are large opportunity costs associated with not taking savings immediately. Savings can be further enhanced by redeploying staff to contract for items not covered by group agreements.
Contract Services↗
Reducing computer hardware service costs.
This article reviews the process of designing and launching a group-purchasing effort to significantly reduce the single most expensive line item in the computer operating budgets for 16 Massachusetts hospitals.
Budgets↗
Business coalitions on health: their activities and impact.
BACKGROUND: Business coalitions on health-generally nonprofit, community-based membership organizations primarily composed of local employers-attempt to manage the cost and quality of health care delivery. They are also active in other areas, including member education, data collection, and selective contracting. ISSUES: With reference to projects related to public accountability for hospital quality of care, coalitions have been involved in legislative support of state public databases, efforts to develop severity-adjusted information on hospital quality, group purchasing from selected hospitals based on cost and quality-an activity conducted in more than 20 locales, and consumer education. CONCLUSIONS: With health care reform, coalitions will need to shift from looking solely at individual physicians and hospitals to looking at them in the context of managed care. Balancing the tension between continuous quality improvement activities and public accountability will also be an important issue for coalitions. The future of coalitions after health care reform is uncertain, with scenarios ranging from their demise to their expansion as active purchasing coalitions or their assumption of new roles and activities. Whatever the future viability and focus of health care coalitions, they have effectively served as change agents in their communities.
Consumer Advocacy↗
Buying in: IDN reaps GPO benefits.
The impact of switching to group purchasing contracts on a hospital's supply expenses is often a subject of speculation, but is rarely actually measured. Scott Frost relates how one hospital system isolated the financial impact of joining a national GPO.
California↗
Maintaining the flow. In a changing market, GPOs work to keep customers happy.
In the rapidly changing group purchasing market, GPOs are focusing on customization to draw new customers and satisfy the ones they have. One particularly daunting challenge for GPOs involves coronary stents. These tiny devices can amount to big dollar volume, but price isn't the only issue.
Angioplasty, Balloon, Coronary↗
Formularies in integrated health systems: Integris health.
Formulary management implications are described for an Oklahoma integrated health system that consists of 14 acute care facilities, numerous owned medical practices, and a fledgling HMO and has loose alliances with other rural facilities. A systemwide pharmacy director has yet to be appointed; however, the position of pharmacy operations manager for the Oklahoma City area has been created. A physician group has been formed that is expected to address systemwide pharmacy and therapeutics (P&T) committees and formulary strategies. Currently, P&T committee activities take place at the individual hospital level. The hospitals do not have restrictive formularies. An overall formulary system would likely be patterned after the largest hospital's system, which includes a formal approval process in which a P&T subcommittee reviews drug use outside established guidelines and the P&T committee asks the appropriate medical department to address the problem. For ambulatory care, the HMO has contracted with a pharmacy benefit manager (PBM), and there is no coordination of formulary efforts between the PBM and health system entities. Although this and other problems remain to be resolved, some standardization of drug use has begun. Also, all entities in the system use the same purchasing group and plan to use the same information systems. Drug use among hospitalized patients in this integrated health system is influenced by the usage guidelines established at the largest hospital, and drug use among ambulatory managed care patients is influenced by an external PBM.
Cost Savings↗
Supply usage data base helps set best practices.
As hospitals move more quickly toward managed care, the impact of industry changes is taking its toll. Networks and systems are rapidly being formed throughout the industry. One advantage of network formation is group purchasing and system-wide contract development. Bundling large volume contracts can produce lower prices for the individual hospitals. Now the challenge for individual hospitals is "where do we go from here?" In many cases, the "system" performs the contract function and the price of most product lines has already been reduced. This article looks at how Alta Bates Hospital in Berkley, CA, continues its efforts to reduce costs as an individual hospital within a larger system, using supply data base information.
Benchmarking↗