Deciding between multi-disciplinary stakeholder strategy vs. single product transactions

This month we focus on the implications of having and not having a purchasing strategy. The strategy, to be effective, must not only address the transaction at hand but also the strategic objectives of one or more clinical or financial stakeholders.

To reinforce the need for a multi-discipline strategy I would like to relate a real-world example. How these three hospitals added or subtracted from stakeholder efficiency will be your call.

In recent months I had the occasion to visit three hospitals that are members of two different integrated delivery networks (IDNs) and group purchasing organizations (GPOs). I observed three different approaches with respect to addressing the need for a simple product solution, which is common to the everyday operation of all hospitals.

The products were related to blood pressure monitoring. As you will see the decision each hospital made has direct impact on the efficiency and productivity of their nursing staffs. I wonder how each hospital decided on the product they purchased. We all know that nursing efficiency can and should be measured, and can and does impact the bottom line. Were they focused on a strategy or a transaction cost? Your call.

Based on my observations, here’s how the three hospitals addressed the need to provide a blood pressure monitor to be used by nursing at the patient’s bedside.

• Hospital 1 had a "manual unit" for multiple patient beds and rooms

• Hospital 2 had a "mobile electronic unit" for multiple patient beds

• Hospital 3 had a "mobile electronic unit" at each patient bed

At Hospital 1, the constant question was "where’s the monitor?" or some variation of that phrase. I watched as the inquiry continued and the search went on. When they found the unit it then required the nurse to manually take the patient’s BP and heart rate. The next step was to record the findings, and then the familiar "where’s the monitor" was heard from another room.

At Hospital 2, similar to Hospital 1, looking for the monitor was the rule but once they found it the BP and heart rate was done automatically, and the nurse was able to perform other tasks while waiting for the readout.

At Hospital 3, nurses moved seamlessly from patient to patient reviewing BP and heart rate.

I wondered what process was used to make the purchasing decision at each hospital and if the key stakeholders did or did not have input. Or more importantly, did materials management consider or seek the input of all of these key stakeholders?

It seemed to me that Hospital 3 probably made their purchase decision based on a global nursing efficiency strategy, and Hospital 1 was most likely focused on the transaction cost.

I also would think that Hospital 2 and Hospital 3 had to do a cost/benefit analysis as most likely the cost of product was higher for them. In addition, they would have had to consider the issue of service and obsolescence cost, which would be higher for automatic electronic units.

Quite possibly, the supplier of the automatic electronic units offered some type of service contract that would add additional cost. They also may have offered leasing or some other type of financial program that might have included service and obsolescence protection.

I wondered what exactly the supplier offered in each of these situations, what the IDN brought to the table and how the GPO contract impacted each decision.

And did the supplier present a comprehensive IDN solution to the provider or only respond to the individual purchase order?

I clearly observed that Hospital 1 was the most inefficient, which must have impacted their cost of staffing and patient flow.

• How does your process address the needs of your key stakeholders?

• Are you focused on a multi-disciplinary strategy or the transaction at hand?

• Do you challenge your supplier and does your supplier challenge you?

• And more importantly, do you listen to each other?

My call: The nurses at Hospital 3 moved seamlessly from patient to patient. Priceless!

Irwin A. Baker is president of RPM Healthcare Strategies. Baker is an experienced healthcare sales and marketing professional with more than 34 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.