Contracting News November/December 2006

HIGPA names Rooney president
The Chicago-based Health Industry Group Purchasing Association (HIGPA) named Curtis D. Rooney as president. Rooney will be responsible for guiding HIGPA’s organizational performance, providing strategic leadership and serving as the Association’s spokesperson on national and international healthcare issues. Under Rooney’s leadership, HIGPA operations will be based in Washington, D.C. Prior to joining HIGPA, Rooney served as senior associate director and counsel, federal relations for the Chicago-based American Hospital Association.

VHA creates physician program
Irving, Texas-based VHA Inc. created a Physician Preference Management Program. The program offers solutions that will help VHA member hospitals manage their orthopedic, cardiovascular and spine service lines, focusing on cost and usage of associated implants, devices and pharmaceuticals. Peggy Naas, RN, MD, MBA, joined VHA to direct a team of clinicians and supply chain experts to help members use timely and accurate clinical cost analysis, custom contracts, and hospital and physician alignment techniques to manage change in these high cost areas. Naas, an orthopedic surgeon, previously practiced at Minneapolis-based Allina Hospitals & Clinics, a long-time VHA member.

Methodist Health readies for $451 million expansion
Memphis-based Le Bonheur Children’s Medical Center’s campaign committee raised approximately $52.5 million toward a $100 million goal to help fund a $451 million renovation and construction plan that will result in a new hospital building and redeployment of bed capacity to Germantown. Officials will file two CON applications with the Tennessee Health Services and Development Agency. Plans call for demolishing the Memphis Mental Health Institute building to make way for a new 225-bed pediatric hospital. The project will also include renovating the existing hospital for other uses and add a new MRI unit. Le Bonheur also plans to convert the 15 acute care beds to neonatal intensive care beds. The total project involves 775,000 square feet. A total of $124 million will be spent to renovate and add 100 new beds at Methodist Le Bonheur Germantown.

Baptist Memorial opens new patient tower
Southhaven, Miss.-based Baptist Memorial Hospital-DeSoto dedicated its 11-story, $175 million patient tower on Nov. 5, 2006. The ground floor features a total of 35 exam rooms, six pediatric rooms and a fast-track triage area. The ER has its own diagnostic imaging area. The ICU is located on the fourth floor. The entire building is set up for wireless and paperless operations with computers located at the patient’s bedside. All rooms are private and allow for family members to spend the night.

Broadlane awards contract to Staples
Dallas-based Broadlane Inc. awarded a five-year, $50 million office- supplies contract to Staples, beginning October 2006. The contract was awarded using one of the largest online auctions in the healthcare industry. Eight of Broadlane’s nine executive steering committee member hospitals participated in the auction, representing up to $70 million in office supply purchase volume. Staples, Office Max, Office Depot and Corporate Express participated in the auction, which included a core list of about 1,000 different items. Broadlane organized a second online reverse auction that awarded $19.5 million in contracts for IV infusion pump disposable products.

Cleveland Clinic names CEO of regional hospitals
The Cleveland Clinic (Ohio) named Fred DeGrandis as president and CEO of its regional hospitals, all of which now are joined under one umbrella. Since 2003, DeGrandis has served as CEO of Cleveland Clinic’s Western Region. Having the hospitals under the direction of one person will make it easier for the alignment of clinical programs, sharing of program support and collaboration on research trials.

Kaiser to open new medical office building
Oakland, Calif.-based Kaiser Permanente began construction on its new Kaiser Permanente West Cobb Medical Office building at Austell, Ga. The 26,000-square-foot facility will include radiology, pharmacy and laboratory facilities, as well as minor procedure rooms. The project is scheduled for completion in early 2007.

I read the article in the Journal of Healthcare Contracting about fiscal discipline and value analysis (“Fiscal Discipline,” July/August 2006 JHC] and wondered, How many value analysis committees do follow-up?

Staff will come to meetings and say the following about products:

  • “We will save money because fewer supplies will be used.”
  • “It will save time, so we can do more procedures.”
  • “It will increase our revenue.”
  • “We will get better pricing if we standardize.”
  • “We will get rebates.”
  • “It will reduce infections.”
  • “It will be better for patient care.”

But how many committees actually follow up and see if these things really happen? They may say “Yes” for a few months, but what about at the end of the year? And what do they do when they find the product does not do what the presenter said it would do? You won’t get many “We do” responses.

What about rebate checks and credits? Who in the organization actually checks to see if it ever happens and if credits were received? Do they check the amount the vendor says [the provider] spent, which determined the amount of the rebate? If they do, they may find that they spent more than the vendor is reporting, and they should have received a larger rebate check.

Dan Dryan
Recently retired director of material management
Shands HealthCare
Gainesville, Fla.

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