Observation Deck: The Vendor-credentialing mess

Direct-selling manufacturers and distributors are becoming increasingly agitated about something that you are doing. Judging from several forums I’ve attended recently, suppliers are worried that your demands for credentialing of sales reps are going to cost them a lot of time, money and heartache. The subject was discussed at the Fall Conference of the Healthcare Manufacturers Marketing Council, the Health Industry Group Purchasing Association expo, and the Amerinet Supplier Forum.

Suppliers are concerned because the credentials that a rep must present to one hospital or hospital system are seldom identical to those they must present to another. “There are 5,000 hospitals, and 5,000 different vendor credentialing requirements,” said John Tara, director of corporate strategic marketing for Boston Scientific, speaking at the HMMC conference. That’s a big problem for a company like Boston Scientific, which has about 2,500 reps in the United States. “You can be looking at tens of thousands of credentialing requests processed each year,” said Tara. “Then you have renewals. So there’s redundancy, risk management, compliance issues, and the cost of the system.”

Vendor credentialing has the big guys worried. Matt Rowan, president of the Health Industry Distributors Association, was one of the panelists at the HMMC conference. But small suppliers share their concerns. Specialty distributors, such as those belonging to IMDA, many of whose annual sales are below $5 million, are worried about how uncontrolled vendor credentialing will affect their businesses. So are manufacturers’ representative firms, such as those belonging to the Health Industry Representatives Association.

Manufacturers and distributors understand that providers need to monitor who’s walking the floors of their facilities, and who’s standing in during surgical procedures. They know that you are expected by the Joint Commission to know who’s walking your floors. They know that you are responsible for protecting patient privacy and safety. They know you have to impose some controls on sales reps calling on your facilities.

At the same time, most providers believe in the value that sales reps bring them, not only in taking care of backorders and other logistics issues, but in introducing new technologies and assisting clinicians in learning how to use them appropriately.

Given all that, it seems imperative that providers and suppliers come to some agreement as to what credentials sales reps must present to providers. If you don’t, this could get very expensive and time-consuming for everyone involved.

The Strategic Marketplace Initiative (www.smisupply chain.com) has already drawn up some recommendations about vendor credentialing. They’re worth looking at. And the Joint Commission has promised to look at the issue in the first quarter of 2008. (JHC readers should monitor this closely, because JCAHO will be reviewing public comments on the issue at that time.)

Vendor credentialing isn’t going to go away. But providers and suppliers need to do some work right now to bring order to what is quickly becoming a big mess for everyone.

About the Author

Mark Thill
Mark Thill is the Editor of The Journal of Healthcare Contracting and has been reporting on healthcare supply chain issues since 1985. He is a graduate of Dominican University in River Forest, Ill., and he received a master's degree in journalism from Northwestern University in Evanston, Ill.