by Irwin A. Baker

A large percentage of the success of any capital project hinges on receiving – or rather demanding – cooperation and "best pricing" from one or more suppliers.

As the capital project moves forward suppliers are defined and appropriate requests-for-information or requests-for-proposals are sent to those selected suppliers. From there the suppliers respond to the RFI or RFP utilizing the unique format requested by each provider.

Depending on the scope of the project, one or several suppliers would be asked to present their proposal in person to a decision-making committee.

All in all, this scenario appears to be, and most times is, a valid way for a provider and supplier to interact to achieve the provider’s stated goal.

The problem is that most of the time the supplier is "flying blind" when it comes to being able to do the proper due diligence to submit the best possible proposal to actually help the provider achieve their stated goals.

At a recent supplier roundtable I was one of about 10 discussion leaders at a session intended to define what suppliers need to more effectively respond to provider RFIs and RFPs. In other words, what is missing from the equation. Although the session was not specifically targeted towards capital, the issue is universal, and capital was also discussed as a specific target.

Only suppliers were present, and we divided into independent discussion groups. After a few hours of work each table was asked to present the top one or two issues which, if implemented, would result in a more efficient process and achieve both provider and supplier goals. We were then challenged collectively to define one issue that would be presented in the main session.

It may or may not be surprising, depending on whether you are a provider or a supplier, but defining the most important issue for the supplier was surprisingly easy and just about unanimous.

The major problem the suppliers defined was lack of data.

Again I want to mention that the roundtables were not focused only on capital, but in my experience the lack of data provided from the provider to the supplier is the major reason most provider goals regarding capital projects are not achieved to a greater or lesser degree.

Let me be more specific. I worked on a project in which I was asked to provide a capital proposal. My initial discussions were with a highly competent vice president of administration at an IDN who was extremely professional, knowledgeable and cooperative. We were able to establish trust and appropriately defined what each side would need to know to make a "go/no-go" decision.

When I asked for data related to procedure numbers and current product usage the initial response was positive. We agreed that competitive information would not be shared and data related to usage would be kept generic. In other words, I asked if we could define how many procedures were currently being performed, what type of products were currently being used and what capital equipment was usually kept on hand to perform this number of procedures. In addition, I offered to have my supplier team help gather the data if the IDN staffing was not able to comply due to resource restraints. The IDN’s executive administration agreed to the request. Until now it seemed like all systems were go.

But from there the process collided with obstacles, which in my personal opinion were sometimes intentional, and the entire process slowed, stopped, restarted and needed almost daily intervention from both supplier and provider executives.

What happened was that the provider’s clinical and middle level management, for the most part, were reluctant to provide data in a timely manner, or in some cases, were hostile to the request. If I took a cynical view of this – and I will – the reports I received from my field people suggested that providing the data could and maybe would bring some troubling inefficiencies to light and might effect the "department level" budgets now and in the future.

For those of you who have read my previous columns and have heard me speak on "Capital Crimes," this is but another example of the provider organization not being on board with their own C-Suite goals.

How you might ask? Because the IDN stakeholders never bought into the ultimate goals of the organization, which are to generate revenue, achieve profitability, increase market share and improve supply chain efficiency. In their defense, they were never educated as to why they should buy in. As can be anticipated, without everyone on board the project will not achieve stated goals.

Just for fun sometime try explaining to a friend in another industry or to an MBA or MHA graduate student that you are expected to provide a proposal for a major project involving millions of dollars, and the "customer" either won’t, or even more disturbing, can’t provide you with accurate data regarding the information you need to provide a win-win proposal. I have had this discussion, and you will get blank stares or outright disbelief.

So how can we all obtain and share data to make the capital process work better, or even more importantly, work the way it should?

As we all know process of improvement starts at the top. The supplier executives must make it perfectly clear that the best result for all concerned depends on accurate date from the provider. The provider executives must also request appropriate accurate data from the supplier, such as what the supplier needs to provide to deliver the best proposal to the supplier. And the provider executives must, by word and deed, require clinical and departmental management to understand why the data is important and what type of data can and will be available to the supplier. To make sure everyone is comfortable provider executives should define exactly what can and cannot be shared so they comply with HIPAA and any other legal requirements. Once this is understood and approved, non-compliance by clinical or departmental management should not be accepted or tolerated.

If we are to achieve the mutual provider and supplier goal of improving the capital supply chain then we must demand the highest level of appropriate, responsible transparency.

• If you, as provider, cannot supply appropriate data in support of your capital project why not?

• If you as supplier don’t ask for better demand appropriate data, why not?

If either side is "flying blind" there is a major capital crime being committed.

It’s time for you as a provider or supplier executive to require your management team to define exactly where you are related to your ability to deliver and receive accurate data.

Having a process in place to define what you can do and will do to gain the greatest cooperation from your supplier will increase your hospital or IDN’s top and bottom line.

Having a well though out and effective data gathering and delivery plan can only lead to true capital gain.

Irwin A. Baker is president of RPM Healthcare Strategies. Baker is an experienced healthcare sales and marketing professional with more than 33 years of industry experience at Johnson & Johnson and Olympus America Inc. His expertise and knowledge spans the goals of both the supplier and provider stakeholders. He currently serves as a member of Healthcare Purchasing News’ editorial advisory board and the NCI advisory board and has been an educational session moderator for the Health Industry Group Purchasing Association. Baker can be reached at rpmhealthcare@aol.com.