Energy overhaul, p. 6
Volume 31, Number 2 February 2006
The Newsletter for Materials Management and Group Purchasing
Medical-surgical distributor
Medline Industries offers a
blueprint for its own effective
energy savings program.
IT budgets growing, p. 7
Purchasing hardware and software
for a hospital carries a median
price of $700,000, and maintaining
that system costs $1.7 million, the
American Hospital Association
reported in late 2005. Yet hospitals
plan to dedicate even more of
their budgets to upgrading their
information technology systems.
Where will they find the money?
High-tech tourniquet, p. 8
Pittsburgh Healthcare System has
a new contract for a device that
calculates and applies tourniquet
pressure. The vendor is American
Medical Depot in Miami, which will
distribute the Zimmer Automatic
Tourniquet System 3000 for use
during surgery.
Standardizing still pays, p. 9
Abington (PA) Memorial Hospital
saved $7.2 million on supplies in
2004—the first year of a program
to standardize group purchasing
contracts—and it expects to
exceed that amount for 2005 when
financial reports are completed.
The 2004 savings included
$2.4 million on high-preference
products.
Price hikes in 2006, p. 12
Purchasing and supply executives
expect to spend an average of 9%
more on capital equipment in 2006
than they did in 2005, according to
the latest economic forecast by the
Institute for Supply Management.
7 . . . Hospital purchasing
9 . . . Group purchasing
12 . . . February IMS forecast
14 . . . Price watch
15 . . . Job mart/people
Hard bargaining limits price
hikes in raw material costs
When materials managers face
price increases for medical-surgical
supplies, the reason they are often
given is that the price of raw materials
has risen for the manufacturer.
Sometimes that is just an excuse,
but often it is the hard reality both supplier and buyer must face.
“Have you tried to buy concrete
lately?” one materials manager asked
HMM after expressing relief that his
hospital’s expansion was nearly complete and would not be hurt by recent
price hikes for building materials.
Operating room impact
In January 2005, a supplier of
operating room (OR) equipment told
contracted hospitals that it would
raise prices because of a 60% increase
in the price of stainless steel.
Novation in Irving, TX, tries to
hold back raw material–based price
increases through contracting. Because it has a group contract with the
OR supplier, Novation was able to renegotiate the deal so that price hikes
would apply only to products that
have stainless steel as a significant
component.
Contract participants now pay
more only for surgical tables, warming
cabinets, consoles, steam sterilizers,
and sinks.
The same supplier, who was not
(See Raw materials, continued on p. 2)
PRICE SURVEY
Managers say drop in glove
prices will be short-lived
The 30% of materials managers
who reported their glove prices decreased last year agreed with the
February HMM price survey, which
indicated an average price decline of
18% for selected products.
But will the decline continue?
The answer is a unanimous no.
About 60% of respondents say
glove prices will rise next year, and
the rest—counting on contract price
protection—say that their prices will
remain stable.
Reasons for those predictions
vary, but most materials managers
cited rising energy, transportation,
and raw materials costs.
One predicted “some pricing
adjustments, most likely due to [the
summer 2005] hurricanes in the Gulf.”
Another added that price pressure is
evident “not only in gloves but disposables in general.”
Hospitals spend more in 2005
This month’s price survey
includes responses from hospitals,
integrated delivery networks (IDN),
and group purchasing organizations.
In all, they represent 1,900 hospitals
(See Price survey, continued on p. 3)
© Copyright 2006 by HCPro, Inc. It is illegal under federal copyright law to reproduce, fax or input electronically this publication or any portion of it without the publisher’s permission.
For more permission information, see p. 2.
RAW MATERIALS
(Continued from p. 1)
identified, agreed to lower its minimum order level so
more hospitals could obtain tiered pricing discounts and
special payment terms and services.
Energy prices have far-reaching effects
In addition to inflation in commodity prices, limitations in the supply of raw materials (e.g., plastic, resin,
steel, and latex) have affected certain med-surg products
since 2002. But the most obvious factor is the rising
price of energy, especially oil.
Although product shortages have yet to appear,
price increases are tied to supply limits, according to a
Novation statement.
As a result, hospitals that are already reeling from
the financial effect of new technologies also face the
prospect of higher costs for med-surg products that are
usually considered commodities.
It’s not the ebb and flow of pricing based on raw
materials, but the combination of higher prices with
other financial constraints that worry hospitals, according to Eldon Petersen, group senior vice president at
Novation.
“Variations in supply and resulting fluctuations in
raw material costs are not new issues,” Petersen said.
Recently, however, prices have escalated with no signs
of downward adjustments.
“There are many factors that contribute to the
recent tightening of the supply of raw materials, including
Hospital Materials Management
Editorial Staff
781/639-1872
Bob Croce, Group Publisher
Paula DeJohn, Managing Editor
Hospital Materials Management (ISSN
0888-3068) is published monthly by HCPro,
Inc., 200 Hoods Lane, Marblehead, MA
01945. Subscription rate: $287/year. •
Periodicals postage paid at Marblehead,
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Postmaster: Send address changes to
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2006 HCPro, Inc. All rights reserved. Printed
in the USA. Except where specifically encouraged, no part of this publication may be
Watch for declining prices
Besides pressing suppliers to limit price increases,
Novation monitors the markets and, as the availability
and pricing of raw materials improves, demands that suppliers either cut prices or restore original contract pricing.
For example, polyethylene represents 70% of the
final product for can liners. Given the increases in resin
costs, Novation’s contracted supplier raised prices in
November 2004 and again in March 2005. However, given
recent declines in base resin prices, Novation obtained a
lower price for member hospitals in June 2005.
Another tool for materials managers is a budget
effect projection that compares the consumer price
index for various areas of healthcare and explains key
global elements that may influence price.
“Many variables influence the supply of raw materials and, ultimately, the costs of various medical and surgical supplies,” Petersen said. “Our goal is to monitor
the supply chain continuously for changes and work
with suppliers to minimize the impact on hospitals.” ❖
reproduced, in any form or by any means,
without prior written consent of HCPro, Inc.,
or the Copyright Clearance Center at 978/
750-8400. Please notify us immediately if
you have received an unauthorized copy. •
For editorial comments or questions, call
781/639-1872 or fax 781/639-2982. For
renewal or subscription information, call
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the Marketing Department at the address
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for specific legal, ethical, or clinical
questions.
©2006 by HCPro, Inc.
All rights reserved. Printed in USA.
2
increased energy costs, increased global consumption
of materials, consolidation in the manufacturing industry,
and changes in healthcare practices,” Petersen said. “However, two factors appear to play the largest role in the
cost of most raw materials: the higher cost of oil and natural gas and the increased consumption of raw materials
by China.”
Editorial Board
Richard L. Benjamin
Executive, Materials
Management
Diakon Lutheran Social
Ministeries
Topton, PA
Mark Brehl
Senior director, Group
Purchasing Services
Amerinet Central
Warrendale, PA
Terry K. Cox
Assistant Vice President,
Supply Chain Pharmacy
Operations
HCA Healthcare
Nashville, TN
Afshin Fatholahi
Administrative Director,
Materials Management
Cottage Health System
Santa Barbara, CA
Thomas MacVaugh
President and CEO
Strategic Initiatives In
Healthcare LLC
Jackson, NJ
Melanie Miller
Program Administrator,
Supply Chain Management
Cedars-Sinai Medical Center
Los Angeles
Raymond E. Patterson
Director, Materials
Management (retired)
Bon Secours Community
Hospital
Port Jervis, NY
Victor Rodriguez
Director of Materials
Management
Lakeland Regional Medical
Center
Lakeland, FL
Mary Jo Felix
Director of Materials
Management
NCH Healthcare System
Naples, FL
Hospital Materials Management, February 2006
© Copyright 2006 by HCPro, Inc. For permission to reproduce part or all of this newsletter for external distribution or use in educational packets,
please contact the Copyright Clearance Center at www.copyright.com or 978/750-8400.
PRICE SURVEY
(Continued from p. 1)
totaling about 400,000 beds.
ECRI, a nonprofit health services research agency
in Plymouth Meeting, PA, provided additional data for
this survey. ECRI’s ongoing surveys of 400 hospitals
cover a wide range of products. Its price guide results
have been added to the table in separate columns to
provide comparison data.
Because the survey for this issue was conducted
in December 2005, reported prices are for 2005 as indicated in the price table.
Average annual spending on all types of gloves
was $459 per licensed bed, 46.2% higher than last
year’s average of $314. For surgical gloves only, the
average annual spending was $211 per licensed bed,
meaning the more specialized and protective surgical
gloves represent about 46% of total glove spending.
Two different products
Surgical and examination gloves could fall into
two different product categories because materials,
packaging, product standards, and manufacturers differ
so much. Surgical gloves are sterile, fitted, and packaged in hand-specific pairs. Exam gloves are usually
nonsterile and packaged in boxes of 100 singles that
can fit either hand.
Thus the “each” figures on the price table are per
single glove for exam types and per pair for surgeons’
and specialty gloves.
However, few hospitals reported separately tracking spending on the two types. They also buy gloves for
nonmedical uses (e.g., housekeeping and food service),
often on the same contracts or as part of the hospital’s
overall glove portfolio.
About 70% of respondents said their glove prices
stayed the same during the past year, while the remaining
30% saw price decreases. Reported declines averaged
3.5%, but an analysis of reported prices shows an average
decline of 18%. ECRI reported even sharper declines, averaging 32%.
Most responding hospitals reported buying off
group contracts, but a few IDNs have inked their own
deals, locking in local price advantages. Contract periods average three years, but range for up to five years.
Contract incentives include rebates and volume
discounts, with groups receiving administrative fees for
promoting the deals, which tend to be multi-source.
Supplier consolidation continues
The survey includes a various suppliers, both large
and small. They include familiar industry names such as
Perry and Safeskin, which are now owned by other companies.
In fact, the glove business has been marked by
almost constant reshuffling of ownership since this
century began.
In March 2000, Ansell Healthcare Products in
Massillon, OH, acquired the glove business of Johnson &
Johnson Medical Products in Arlington, TX. Even today,
materials managers continue to refer to Ansell products
by that company’s former name, Ansell Perry.
The $98 million deal brought J&J’s Neutralon,
Micro-Touch, and Allergard brands under Ansell’s control, and boosted Ansell’s market share.
Other popular glove suppliers are Medline Industries in Mundelein, IL; Allegiance Healthcare Corporation
in McGaw Park, IL, now owned by Cardinal Health in Dublin, OH; the Kendall Company division of Tyco Healthcare
in Mansfield, MA; and Cypress Medical Products in
McHenry, IL.
In late 2003, Medline acquired the surgical and medical products business of Maxxim Medical in Clearwater,
FL, including examination and surgical gloves. They include the Sensicare Advantix powder-free line of latexfree exam gloves, introduced by Maxxim in 2000.
In August 2004, the owners of Regent Medical in
Norcross, GA, spun off the company to form an independent company. The parent, British-based SSL International, sold the Regent assets to Apax Partners, which
renamed it Regent Medical, Ltd.
Regent begins its latest incarnation close to the top
of the heap in its specialty of surgical gloves. According
to recent industry estimates, market share among the
top glove companies breaks down as follows:
n
n
n
n
n
Regent, 34%
Allegiance/Cardinal, 31%
Ansell/J&J, 30%
Maxxim/Medline, 3%
Others, 2%
Total U.S. annual spending on surgical gloves—not
including exam gloves—is $206 million, according to
industry estimates.
Leaving latex, loving aloe
There is a growing awareness of the dangers of
latex to clinicians and patients, and hospitals nationwide
have drafted latex-use policies for their staff.
Many states have passed legislation requiring safer
alternatives to latex for those who are sensitive or allergic to it.
Although formal latex policies were slow to evolve,
most hospitals now say they make synthetic products
available to people who need them. IDNs typically allow
member hospitals to set their own internal policies.
Latex-free options have translated into higher
spending in the past, both from the use of more costly
synthetics and the cost of maintaining special supply
stores, but this might also change. As nonlatex technology becomes more dominant, changes in the commodity
price of rubber might make latex the more costly option
in the future. ❖
Hospital Materials Management, February 2006
© Copyright 2006 by HCPro, Inc. For permission to reproduce part or all of this newsletter for external distribution or use in educational packets,
please contact the Copyright Clearance Center at www.copyright.com or 978/750-8400.
3
PRICE SURVEY
HMM survey: Glove prices
We’ve listed the prices by unit for examination
gloves and by pair for surgical and specialty gloves based
on HMM’s survey of hospitals, integrated delivery net-
works, and group purchasing organizations. Prices are
rounded to the nearest cent. ECRI prices are listed separately on the right.
Glove prices, February 2006
Product Code
Ansell Healthcare
2082
3063
3091
3202
3772
4004
5721
7861
5760802
5761402
Cardinal Health
2D72011
2D7201I
2D7207I
2D7263
2D7263
2D7264
2D7265
2D7282
2D72931
2D7297I
2D72A21
2D72A2I
2D72B1I
2D72B3I
2D72F41
2D72N51
2D72NT75
2D72NT75
2D72PT60
2D72PT65
8846A
CT0192-1
V8812N
Cypress Medical
23-04
23-15
23-35
4
Product
2005 price
New Touch vinyl powdered clear PVC
Synsation sterile singles large
Micro-touch Elite powder-free smooth
Micro-touch Next Step with aloe and glycerol
Affinity exam
Micro-touch powder-free Nitrile textured
Micro-Touch exam
Sterile exam
Perry X-AM powdered latex exam glove
Perry X-AM sterile pairs
0.02
0.20
0.03
0.04
0.07
0.05
0.02
0.13
0.02
0.25
Triflex surgical glove sterile latex powder
Surgical glove size 6
Triflex glove
Ultraderm surgical glove powdered hypoallergenic
Ultraderm surgical glove
Surgical glove, hypoallergenic
Surgical glove, hypoallergenic
Triflex orthopedic glove sterile latex powdered
Orthopedic glove size 7
Orthopedic glove powder-free
Duraprene glove sterile non-latex powdered
Duraprene synthetic glove
Duraprene powder-free glove
Nonlatex powder-free
Ultrafree latex surgical glove
Protegrity surgical glove
Micro powder-free latex
Protegrity powder-free sterile latex
Esteem powder-free synthetic surgical glove
Esteem powder-free glove
Exam glove, powderless latex
Chemo glove
Nitrile glove medium
0.30
0.28
0.28
1.60
1.52
1.22
1.52
1.08
1.07
1.26
1.75
1.80
1.86
1.87
0.93
0.95
0.85
0.96
2.05
1.85
0.07
0.76
0.11
Powdered smooth exam
Powdered 12-in. exam
12-in. powder-free medium
0.22
0.80
1.00
2004 price
% change
0.06
16.7%
0.05
0.30
-60.0%
-56.7%
0.26
13.7%
1.80
0.76
0.22
0.80
0
0
Hospital Materials Management, February 2006
© Copyright 2006 by HCPro, Inc. For permission to reproduce part or all of this newsletter for external distribution or use in educational packets,
please contact the Copyright Clearance Center at www.copyright.com or 978/750-8400.
PRICE SURVEY
Glove prices, February 2006 (cont.)
Product Code
Product
2005 price
23-94
Powder-free textured exam
0.28
23-94S
Powder-free smooth exam
0.28
25-04
Powdered medium
0.21
25-92
Powder-free small
0.21
25-950
Preferred PVC powder-free synthetic
0.25
27-28
Powder-free extra-large
0.41
Kimberly-Clark (Safeskin)
100
Light-powder latex exam
0.02
110
Powder-free exam
0.03
200
Exam glove, powdered latex beaded cuff
0.02
220
Powder-free exam, small
0.03
300
Exam glove, powdered latex beaded cuff
0.02
330
Powder-free exam, medium
0.03
400
Light powder latex exam
0.02
Powder-free exam, large
0.03
440
500
Light-powder latex exam glove, extra-large
0.03
50031
Synthetic Plus powder-free
0.03
50301
Exam glove, satin plus, sterile powder-free, single 0.16
50402
Exam glove, satin plus sterile pair
0.25
50503
Exam glove, powder-free, beaded cuff non-sterile latex 0.07
50602
Exam glove, Nitrile latex-free
0.11
52102
Sterile exam glove, single
0.21
52504
Exam gloves, vinyl extra large
0.03
53102
Exam glove, Nitrile, textured, latex-free
0.05
53833
Neon Nitrile, large
0.04
53834
Neon Nitrile, extra large
0.05
58272
Healthtouch exam glove w/ Vitamin E and aloe 0.03
N330
Exam glove, smoothe Nitrile
0.06
SP2440
Satin plus, large
0.03
SP2550
Satin plus, extra large
0.04
Regent Medical (Biogel)
30355
Diagnostic non-sterile latex
0.60
30455
Latex surg
1.64
30460
Latex surg
1.10
Latex surg
1.10
30470
30560
Surgical glove size 6
1.1
1.10
Surgical glove, sterile latex micro-texture
30590
30855
Surgical glove powder-free synthetic
1.60
31060
Orthopedic glove, powder-free
1.10
31255
Indicator underglove, powder-free, sterile latex 1.10
31460
Sinsense sterile non-latex
1.55
31475
Skinsense
1.55
40655
Skinsense universal
1.55
82575
Super-sensitive surg
1.10
82585
Super-sensitive surg
1.19
1.19
Optifit Super-Sensitive
82680
2004 price
0.28
0.28
% change
0
0
0.25
0
0.04
0.06
-42.9%
-45.5%
0.60
1.57
2.02
2.02
0
4.8%
-45.5%
-45.4%
1.74
1.73
1.20
1.84
1.19
-10.7%
-35.3%
Hospital Materials Management, February 2006
© Copyright 2006 by HCPro, Inc. For permission to reproduce part or all of this newsletter for external distribution or use in educational packets,
please contact the Copyright Clearance Center at www.copyright.com or 978/750-8400.
5
ENERGY
Medline energy overhaul nets savings
Energy conservation program saves $250,00 in first year
Recycling pays
Hospital suppliers need to save money, too.
The company decided to recycle all corrugated
One major manufacturer/distributor is demonstratand sorted office paper throughout the entire 1 millioning that a companywide energy saving program can trim
sq.-ft. headquarters.
expenses significantly and help keep costs down for the
In 2004, workers recycled 654 tons, and through
hospitals to which it sells supplies.
June 2005, they recycled 355 tons.
In the process, the manufacturer is providing a
Manufacturing plants recycle all plastic parts that
blueprint for hospitals to review and use to revamp their
do not meet quality assurance standards. The parts are
own energy use.
reground and sold back to the market.
The company is Medline Industries in Mundelein,
In 2004, Medline recycled 199 tons, and by midIL, which announced that during 2004 and 2005—the
2005, it had recycled 168 tons.
first years of its energy conservation
The company also recycles
program—it saved $250,000 and
all waste oil from manufacturing
reduced greenhouse emissions of
processes.
carbon dioxide by more than 1.7 mil“We feel good knowing
lion lbs.
that while we are trying
Heating and cooling changes
“We feel good knowing that
to operate smart, we’re
maintain comfort
while we are trying to operate
helping to preserve and
smart, we’re helping to preserve
Heating and cooling also took
and protect our environment,” COO
a toll on energy consumption, so
protect our environment.”
Jim Abrams tells HMM.
crews resealed windows and re“Medline has saved a tremencaulked precast exterior wall joints
—Jim Abrams
dous amount of money and energy,”
to reduce drafts and the load on
he says. “Considering the extremely
HVAC systems.
tight operating margins of hospitals
Now HVAC systems in the
and healthcare facilities, we think
office buildings use set-back therour customers could really benefit by undertaking even
mostats and free-cooling dampers to reduce energy
a few of these energy-saving methods.”
consumption while providing a comfortable work
The project began with a comprehensive review of
environment.
Medline’s energy consumption, he says.
An updated, automated water-chiller system for
That led to changes in the company’s lighting,
manufacturing and molding processes provides free
heating, and waste disposal methods, among other
cooling to manufacturing when the outside ambient
modifications.
temperature reaches 45° F or lower.
More light for employees
The company retrofitted its warehouses, manufacturing plants, production departments, and packaging
areas with new high-output T5 light fixtures and lamps
that have on-off auto sensors.
These changes reduced the demand for electricity
and added more light for employees, increasing productivity and safety.
Medline installed light sensors in all offices, closets, and restrooms that don’t have switches to conserve energy at headquarters.
Medline also replaced fixtures and lamps from
T12 to T8 models, and replaced all incandescent floods
to fluorescent low-energy flood lights to conserve energy and reduce heat load on the heating, ventilation, and
air-conditioning (HVAC) systems.
Exterior parking lot lights were switched to automatic on-off sensors from timers to conserve energy
and reduce electricity consumption.
6
Working on waste
Because it can’t recycle every item, the company
installed devices on trash compactors that monitor pressure, ensure a full container, and automatically page the
hauling company when full.
This move decreased expenses by 56% by reducing
the number of pickups.
In addition to these modifications, Medline has signed
up as a corporate participant of www.stopglobalwarming.
org.
“We began this effort as a way to save money and
energy,” Abrams says. “But really, many of these efforts
are just plain smart business.
“It didn’t take long to understand that not only
were we saving a tremendous amount of money, we
were accomplishing something much more,” he says.
“We were doing something to help preserve and protect our environment. And this is something that we
should all be doing.” ❖
Hospital Materials Management, February 2006
© Copyright 2006 by HCPro, Inc. For permission to reproduce part or all of this newsletter for external distribution or use in educational packets,
please contact the Copyright Clearance Center at www.copyright.com or 978/750-8400.
HOSPITAL PURCHASING
■
More capital, operational spending
devoted to IT, AMA survey says
n
n
n
n
bar coding
radio frequency identification
personal digital assistants
telemedicine
Purchasing hardware and software for a hospital
carries a median price of $700,000, and maintaining
that system costs $1.7 million, according to an AmeriAbout 50% of the hospitals surveyed said they
can Hospital Association (AHA) survey released in
currently
share information electronically with other
October 2005.
hospitals,
laboratories, and insurance companies.
The AHA found that hospitals plan to dedicate
During the next three years, the survey responeven more of their budgets to upgrading their informadents said they plan to increase their IT spending to an
tion technology (IT) systems in hopes of reaping future
average of 20% of their annual capital equipment budgsavings. The question is, where will they find the money?
ets and 2.5% of their annual operating expenses.
Hospitals are willing to install the latest IT systems
Smaller hospitals with less advanced systems plan
as recommended by the government, but lack of finanto
devote
even larger shares of their budgets to IT
cial resources is the main reason given by those who
investment.
have not yet done so, according to the AHA survey.
AHA researchers predicted
Those most likely to have acthat the adoption of IT will continue
cess to the latest IT products are
at an evolutionary pace.
larger urban hospitals that are affili“We have not fully tapped in“We have not fully tapped
ated with medical schools. Trailing
to
IT’s
potential in the healthcare
the pack are smaller, rural, and noninto IT’s potential in the
arena,”
George Lynn, chair of AHA
teaching hospitals.
healthcare arena.”
and
president
and CEO of AtlantiThe level of IT implementation
Care
in
Atlantic
City, NJ, said about
varies, the survey showed, depend—George Lynn
the
survey
results
in an AHA news
ing on facility size, financial resourcrelease. “Other fields, such as bankes, teaching status, location, and
ing, have embraced technology,
whether the hospital is independent
helping to change the way we bank today. Although the
or part of a system.
use of IT in healthcare is still in its infancy, hospitals
The survey report, Forward Momentum: Hospital
recognize that IT can help them meet their mission of
Use of Information Technology, draws on AHA’s dataimproving safety and quality. We need to move quickly
base of 4,895 community hospitals, of which 940
to remove barriers to widespread IT use.”
(19.2%) responded to the survey.
The results of the AHA survey appeared at the
The vast majority (92%) said they use or plan to
same time that the Department of Health and Human
use IT for clinical applications. They agreed that the
Services issued initial contracts valued at $17.5 million to
greatest barriers to IT acquisition are the cost of hardcompanies that are developing a national healthcare IT
ware and software as well as maintenance. Among curnetwork.
rent IT users, respondents spent a median 15%, or
$700,000, of their annual capital investment budgets,
and 2%, or $1.7 million, of yearly operating expenses
■ Neoforma , GHX complete waiting period
on IT.
for merger of e-commerce giants
Most hospitals that buy IT do so slowly and increThe planned merger of Global Healthcare Exmentally to reduce capital outlays. Hospital executives
change (GHX) in Westminster, CO, and Neoforma of
also were concerned about committing to new systems
San Jose, CA, moved forward another step on Novemthat are not integrated with current systems.
ber 21, 2005, when the waiting period under the HartThe AHA survey found one major change since
Scott-Rodino Antitrust Improvements Act of 1976
earlier polls on IT use: Resistance to computer techexpired.
nology among clinical staff is no longer a significant
On October 10, 2005, GHX and Neoforma entered
issue. Only 19% of physicians do not use computers in
into
a
definitive merger agreement for GHX to acquire
their practices, followed by 17% of nurses, and 16% of
Neoforma. The transaction remains subject to approvother clinical staff, according to the report.
al by stockholders who represent a majority of NeoOne of the primary incentives for hospitals to informa’s shares that are not held by VHA, Inc., and the
stall IT is the ability to convert to electronic medical
University HealthSystem Consortium and who vote on
records. Among the AHA survey respondents, 84% have
the transaction.
begun creating electronic records.
The transaction is expected to close in early 2006.
Other technologies that hospitals have given high
Equity
owners of GHX include
priority include
n computerized physician order entry systems
(See Hospital purchasing, continued on p. 8)
Hospital Materials Management, February 2006
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please contact the Copyright Clearance Center at www.copyright.com or 978/750-8400.
7
HOSPITAL PURCHASING
(Continued from p. 7)
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
n
■
Johnson & Johnson Health Care Systems
GE Healthcare
Baxter Healthcare Corp.
Medtronic USA, Inc.
Abbott Exchange, Inc.
Siemens
Becton, Dickinson & Co.
Boston Scientific Corp.
Tyco Healthcare Group, LP
Guidant Corp.
C.R. Bard, Inc.
AmerisourceBergen Corp.
Cardinal Health, Inc.
Fisher Scientific International, Inc.
McKesson Corp.
B Braun Medical
Premier
HCA
Boston Scientific offers to acquire
rival cardiology supplier Guidant Corp.
Another suitor appeared soon after Johnson &
Johnson (J&J) in New Brunswick, NJ, agreed to acquire
Guidant Corp. in Indianapolis.
On December 5, 2005, Boston Scientific Corp. in
Natick, MA, offered $25 billion for its rival cardiology
device maker, about $4 billion more than the J&J offer,
which had been influenced by Guidant’s rescan troubles. After Boston Scientific’s bid, J&J did not withdraw
its offer—but did not raise it either.
Currently, Boston Scientific leads the market in
drug-eluting stents, and acquiring Guidant would give it
access to the $10 billion global market for pacemakers
and defibrillators.
Boston Scientific said if the deal goes through, it
will divest Guidant’s vascular intervention and endovascular businesses but retain Guidant’s drug-eluting
stent program.
The J&J deal was originally announced in December 2004, and was approved by the Federal Trade Commission. J&J attempted to pull out, citing concerns
about recalls and related investigations of Guidant’s
electrophysiology devices.
Riverside paid $1.3 million for the robotic system,
which also could be used in thoracic, colon, and general surgeries.
The manufacturer is Intuitive Surgical, Inc., in
Sunnyvale, CA. More than 350 of the systems are in use
worldwide, the company said.
■
Hospital system reports big savings
on cardiology supplies following
gainsharing implementation
PinnacleHealth, a five-hospital system based in
Harrisburg, PA, saved 5% ($1 million) on cardiology
supplies by standardizing products such as balloon
catheters and using a gainsharing arrangement with
surgeons, according to a New York Times article.
Pinnacle received approval under a case-by-case
policy permitted by the Department of Health and
Human Services, exempting the system from anti-kickback laws.
In the gainsharing arrangement, doctors receive
half the first-year savings from standardization on
physician preference products.
■
Pennsylvania system awards contract
for automated tourniquet device
Pittsburgh Healthcare System, 291 beds, has a
new contract for a device that calculates and applies
tourniquet pressure.
The vendor is American Medical Depot in Miami,
which will distribute the Zimmer ATS (Automatic Tourniquet System) 3000 for use in surgery. The deal is solesource and took effect in December 2005.
The ATS 3000 is a dual-port, dual-cuff system with
microprocessor controls and dedicated ports for supplying and measuring pressure independently.
The ATS 3000 has an innovative limb occlusion
pressure feature that senses, calculates, and provides a
recommended tourniquet pressure setting in approximately 30 seconds. ❖
Questions? Comments? Ideas?
Contact Managing Editor Paula DeJohn
■
Riverside Methodist buys da Vinci
robotic system for use in various
surgical procedures
Riverside Methodist Hospital in Columbus, OH,
640 beds, purchased a da Vinci robotic surgical system
for use in minimally invasive prostate, kidney, heart,
and gynecological procedures.
8
Telephone:
E-mail:
303/693-6608
[email protected]
Hospital Materials Management, February 2006
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GROUP PURCHASING
■
Correction
Neoforma in San Jose, CA, provided the following
information clarifying the story “Who are the most popular suppliers? Neoforma awards top performers” in
the November HMM:
Neoforma’s Best in Class Awards recognize medicalsurgical manufacturers for their growing market
share, and are based on market intelligence reports.
Neither the awards nor the reports are related to
Neoforma’s e-commerce business with Novation. In
fact, Neoforma’s med-surg market intelligence business is run by HPIS, a Neoforma company, and is
entirely independent of and separate from Neoforma’s relationship with Novation.
To characterize the awards program as Neoforma’s
“last solo project” and Neoforma as having been
“acquired by GHX” are both inaccurate. The deal is
expected to close in early 2006. In the meantime,
Neoforma continues to operate as an independent
company with a tight product delivery schedule and
independent projects.
■
Pennsylvania hospitals reap large
savings with help of VHA consultants
and Novation group contracts
Abington (PA) Memorial Hospital, 508 beds, saved
$7.2 million on supplies during 2004, the first year of a
program to standardize group purchasing contracts. It
expects to exceed that amount for 2005 when it completes its financial reports. The 2004 savings included
$2.4 million on high-preference products.
Abington is one of 73 Pennsylvania hospitals that
participated in a consulting program run by VHA in
Irving, TX, and its group purchasing arm, Novation,
also in Irving.
Together, the hospitals saved $101.8 million during 2004 and are on track to exceed that savings figure
for 2005, VHA said in a news release.
Abington Vice President Richard Montalbano credits the assistance of VHA and Novation consultants with
making the cost reductions possible.
“Finding and buying the best drugs, supplies, and
medical devices at the best possible prices takes an
enormous amount of time and requires significant input from purchasing and clinical staff members,” said
Montalbano. “Working with VHA and Novation allows
us to work with our doctors to identify cost-saving
opportunities.”
Another participant was Crozer-Keystone Health
System in Springfield, PA.
“Hospitals have never been under so much pressure to provide unlimited care on limited budgets,” said
CEO Jerry Miller. “That’s why it’s crucial that we find
ways to operate as efficiently as possible.”
Steven P. Johnson, CEO of Susquehanna Health
System in Williamsport, PA, estimated that his hospitals
saved $650,000 during 2005 through the VHA program.
■
Broadlane inks deal to outsource supply
contracting for San Francisco-area docs
Under a two-year deal, Broadlane in Dallas will
take over procurement services for Brown & Toland
Medical Group in San Francisco.
Broadlane has been courting physician practices and hospitals to outsource negotiation of supply contracts. Under the deal with Brown & Toland, Broadlane
will negotiate and manage supply contracts—including
national agreements—for participating physicians.
Supply savings are estimated at 10%–50%, according to
Broadlane.
In most cases, individual physicians will be able
to use their existing distributors, but also enjoy savings
on nondistributed, manufacturer-direct items.
■
Amerinet adds second deal for
nonoperating room custom trays
with Tri-State Hospital Supply
Amerinet in St. Louis has a new contract for custom trays. The vendor is Tri-State Hospital Supply
Corporation in Howell, MI, and covered products are
marketed under the Centurion brand name. The deal
took effect in October 2005 and runs for three years.
It covers nonoperating room custom trays that are primarily used in emergency, intensive care units, oncology, labor and delivery departments, and IV therapy
units. Amerinet also has a deal for trays with Medline in
Mundelein, IL (see the November 2005 HMM).
■
Centura finds millions in additional
savings from organizational
improvements via Premier advisors
Centura Health in Denver has used contracts from
Premier in Charlotte, NC, to save money on medicalsurgical supplies and has now found even more savings
through operational efficiencies using Premier’s consulting service.
The 12-hospital integrated delivery network is
in the third year of a five-year deal in which Premier
works with five Centura hospitals to improve procedures. So far, Centura has identified $12 million in savings, representing a 20-to-1 return on investment.
Centura is participating in Premier’s Operations
Advisor program. “[The program] allowed us to compare our practices to our peers and identify significant
growth opportunities,” said Craig McKnight, Centura’s
(See Group purchasing, continued on p. 10)
Hospital Materials Management, February 2006
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9
GROUP PURCHASING
(Continued from p. 9)
CFO. “Once we pinpointed those opportunities, we
worked with Premier’s advisory team to implement
more cost-effective practices where needed.”
The two companies began working together in
April 2004, when Centura signed a five-year agreement
to implement Premier’s Operations Advisor reporting,
analysis, and comparative benchmarking solution in
nine of its hospitals. The agreement also included two
to five years of consulting services.
Premier consultants completed 34 departmental
reviews in five Centura hospitals in September 2005—
Avista Adventist Hospital, Penrose Community Hospital, Penrose Hospital, St. Anthony Central Hospital,
and St. Anthony North Hospital—condensing the original two-year consulting engagement into 45 days.
Similar reviews are now underway at two additional hospitals, Porter Adventist and St. Thomas More.
The reviews cover the following areas:
n Critical success factors for improved performance
n Departmental structure
n Utilization of labor
n Staffing analysis
n Potential barriers and constraints
Premier said in a statement that in 2005, its consulting team identified more than $300 million in costsaving opportunities for member hospitals.
■
Safety products focus of series of deals
inked by Novation
Novation in Irving, TX, signed renewal agreements
with four suppliers for safety needles and syringes. Some
prices went up, while others went down.
The vendors are Becton Dickenson in Franklin
Lakes, NJ; Retractable Technologies in Little Elm, TX;
Smiths Medical in Keene, NH; and Tyco Healthcare in
Mansfield, MA.
Novation said the increased costs of raw materials (e.g., resin and petroleum) led to a minimal price
increase for Becton Dickinson and Tyco Healthcare
products.
However, Novation negotiated lower pricing on
Retractable Technologies products and Smiths Medical
agreed to maintain previous contract pricing.
The two-year deals took effect January 1 and will
run through December 31, 2008. They resulted from a
public competitive bidding process and input from the
member surveys and councils.
Cathy Denning, senior director of contract and
program services, said Novation’s policy is to seek out
safety products for inclusion in its contract portfolio.
“These agreements exemplify Novation’s commitment to safety and providing members with a broad
choice of supplier options,” she said in a statement.
10
■
Consorta reports double-digit revenue
hike, with 14% increase in purchasing
volume by members
Consorta in Schaumburg, IL, said revenue for fiscal year (FY) 2005, which ended June 30, rose 20% to
$69.4 million. Net income was $49 million, up 21% from
FY 2004. Consorta shareholders received cash returns
of $76.3 for every revenue dollar, reported the Catholic
group purchasing organization.
“We closed out a record fiscal year with strong
revenue growth driven by healthy new member growth,
and a 14% increase in purchase volume from existing
members,” said John Strong, president and CEO of
Consorta.
“Consorta’s success in helping manage supply
costs for our members, a majority of which are faithbased or nonprofit health systems, has resulted in cash
returns of more than $400 million during the past seven
years,” Strong said.
First quarter results for FY 2006 reflect growth in
income of more than 30% over FY 2005, Strong added.
Consorta membership includes 2,400 hospitals and other
facilities that total 78,000 beds.
■
Tri-City Medical Center agrees to switch
from affiliate to full shareholder status
in Premier
Tri-City Medical Center in Oceanside, CA, 397 beds,
has agreed to become a full shareholder in Charlotte,
NC–based Premier. Tri-City has been an affiliate of Premier since 1988.
“Our patients have benefited tremendously from
our association with Premier,” said Bob Wardwell, vice
president of finance at Tri-City. “They will benefit even
more now.”
Premier will provide group contracts as well as
support from regional consultants, supply chain automation tools, and access to supply chain benchmarking
and performance improvement resources.
■
PACS equipment featured in new
agreement between Consorta and
Richardson Electronics
Consorta in Schaumburg, IL, awarded a contract
for medical image display systems used in picture archiving and communications systems (PACS) to Richardson Electronics, Ltd., in LaFox, IL
The deal took effect October 1, 2005, and runs for
three years. It covers diagnostic, review, and specialty
PACS workstations from Richardson at undisclosed
savings. ❖
Hospital Materials Management, February 2006
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Premier seeks surgical, imaging deals
As the first quarter of 2006 began, Premier in
Charlotte, NC, was looking for vendors for respiratory
therapy, interventional cardiology, and imaging products, among other categories.
Most bids will be issued during the quarter and
had not gone out as of January, according to Premier’s
Web site.
The following are examples of products Premier
will look to evaluate for contracts that it will issue later
this year:
n Cardiology products
n Clinical laboratory
n Housekeeping
n Imaging
n Nursing
n Pharmacy
n Respiratory therapy
n Surgical services ❖
Novation to bid catheters and monitors
Temperature monitors, patient warming devices,
and various catheters are on Novation’s shopping list
in the first quarter of 2006.
The Irving, TX–based group purchasing organization issued a series of requests for proposals on its
Web site, with contract launches scheduled throughout the year and in early 2007.
The following are examples of medical-surgical
and other supplies for which Novation will award
contracts:
Product description
Convective air warming equipment, blankets, and related accessories
Artificial airways: endotracheal tubes, supraglottic airways,
disposable tracheostomy tubes, oral airways, and other related products
Continuous temperature monitoring: temperature monitors, temperature monitoring
probes and sensors, and other related accessories
Fluid warming: fluid warming units (e.g., gravity flow), disposable sets,
rapid infusion units with fluid warming, and other related accessories
Hemodynamic monitoring: thermodilution catheters, transducers, in-line blood sampling devices,
introducers
Pain management: intradiscal electrothermal therapy, iontepheretic pain management
Express mail services
MR patient monitors
High-efficiency air filtration equipment
Maintenance repair operations distribution
Blood-bank testing
Immunochemistry, chemistry equipment, reagents and supplies
(e.g., preanalytical, analytical, and postanalytical automation)
PICCS and midlines, tunneled and nontunneled dialysis and apheresis catheters,
nontunneled central venous catheters, implantable ports and noncoring needles,
tunneled central venous catheters
Nasogastric tubes
IV catheters
Baby care products
One-step surgical skin prep
Surgical masks and related items
Open and closed wound drainage
Laparoscopic irrigation
Projected
launch quarter
2007/Q1
2007/Q1
2007/Q1
2007/Q1
2007/Q2
2007/Q2
2007/Q3
2006/Q3
2006/Q4
2007/Q1
2007/Q1
2007/Q2
2006/Q2
2006/Q4
2007/Q1
2007/Q1
2007/Q1
2006/Q4
2006/Q4
2006/Q4
Source: www.novationco.com.
Hospital Materials Management, February 2006
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11
FEBRUARY IMS FORECAST
Purchasing pros see price hikes in 2006
Purchasing and supply executives expect to spend
an average of 9% more on capital equipment during
2006 than they did during 2005, according to the latest
economic forecast by the Institute for Supply Management (ISM) in Tempe, AZ.
The forecast was compiled from a survey of ISM
members, the results of which were released in late
December 2005.
Prices of supplies for industries such as healthcare
will increase during the first four months of 2006 by an
average of 3.4% and will increase by an average of 4%
over the full year, the purchasing managers said in the
ISM survey.
Health services—the nonmanufacturing component of the semiannual ISM survey—is among the industries that are expected to increase jobs this year.
Hospital materials managers can use the ISM predictions in two ways: to gain insight into how their suppliers anticipate production and pricing for the coming
year and to see how their fellow healthcare purchasing
executives respond to economic conditions.
fourths complete in achieving efficiency resulting from
technology, while 46% indicate they are less than 50%
complete.
Manufacturing sector continues to expand
Expectations for 2006 are at relatively high levels
for both manufacturing and nonmanufacturing sectors.
Both sectors expect more revenue in 2006, but nonmanufacturing industries expect stronger revenue
growth than manufacturers.
The panel of purchasing and supply executives
expects a 5.4% net increase in overall revenues for 2006,
compared to the 7.3% increase reported for 2005. Manufacturing industries that predict the greatest improvement during 2005 are electronic components; glass,
stone, and aggregate; chemicals; apparel; metals; transportation; textiles; rubber and plastic products.
In the manufacturing sector, respondents report
operating at 85.3% of their normal capacity, down from
86.8% in May 2005. They predict their capital expenditures will increase by 9% during 2006, compared to the
19% increase reported for 2005.
Manufacturing representatives predicted that the
prices they pay will increase 3.5% during the first four
months of 2006 and an additional 0.3% during the remainder of 2006, for a total of 3.8% for the year.
Their major concerns are energy costs and supplies, oil and petroleum-based products, inflation, labor and benefits costs, and continuity of supplies and
shortages.
The survey also showed that supply chain executives have been slow to institute methods and technology that could improve efficiency and reduce their
acquisition costs. Although a few companies rate themselves as being almost finished, 80% are less than three-
Materials and services prices to rise 4%
Nonmanufacturing industries expect that prices
they pay for materials and services will increase by 4%
during 2006. They also forecast a 3.6% increase in their
overall labor and benefit costs.
Production capacity in manufacturing increased
5.3% during 2005, as 51% of purchasing executives
reported an average capacity increase of 14.5%, 7%
reported decreases averaging 30.2%, and 42% reported
no change.
Average expectations for 2006 are for an increase
of 5.3% in capacity.
The capacity to produce products or provide services in the nonmanufacturing sector increased 2.9% during 2005, with health services exceeding that average.
For 2006, an average 3.7% increase is predicted.
Manufacturing supply managers reported 2005
capital expenditures rose 19% when compared to 2004
levels.
For nonmanufacturing organizations, the 2005
increase was 5.3%. Industries that increased their capital expenditures by even more than that figure include
utilities, legal services, agriculture, mining, banking,
real estate, communication, and health services.
12
Nonmanufacturing execs also optimistic
The nonmanufacturing materials managers polled
expect their revenues to be greater in 2006 than they
were in 2005. They predict a 6.6% net increase in overall revenues compared to the 5.8% increase reported
for 2005.
They forecast that their capacity to produce products and provide services will go up by 3.7% during
2006 and that their capital expenditures will increase
by 11.1% from the 2005 level.
Purchasers for nonmanufacturing industries said
they have achieved an average of 52% of potential benefits from application of technology to their supply
chains and that they plan to continue adding new technology in 2006.
Among their technology choices will be increased
use of electronic commerce to order and track supplies.
Manufacturing prices higher than predicted
After an initial forecast in May 2005 of a 5.2% increase in prices that they would have to pay, manufacturers that responded to the ISM survey said their actual
price increases averaged 6.4% for the year.
Industries that experienced higher-than-average
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FEBRUARY IMS FORECAST
price increases are those that produce glass, stone, rubber, plastic, textiles, primary metals, apparel, paper, and
chemicals.
Nonmanufacturing supply managers reported that
the prices they pay increased by 5.3% over 2005. This
is slightly less than the 5.5% increase they predicted in
May 2005.
For nonmanufacturing industries, survey results
indicate that employment will increase 2.3% by the
end of 2006.
Industries anticipating above-average increases
in their employment during 2006 include utilities, communication, construction, business services, banking,
retail, and health services.
Price hikes to continue in 2006
Manufacturing purchasers expect the net average
overall price change to be 3.5% from January to April.
The net average of the responses indicates an increase
of 3.8% overall by the end of 2006. Industries that
expect to pay above average prices by the end of 2006
are those that produce glass, stone, rubber, plastic,
paper, chemicals, and food.
Nonmanufacturing supply executives predict that
their purchases during the first four months of 2006
will cost an average of 3.4% more than at the end of
2005.
They expect most of the 2006 price increases to
occur during the first part of the year, with health services projecting above-average price increases during
the first part of 2006.
For all of 2006, nonmanufacturing supply management executives expect their prices to rise an average
4%. Service industries expecting to pay above average
price increases by the end of 2006 include construction, utilities, agriculture, banking, legal services, insurance, business services, and health services. The following table shows the distribution of survey responses
concerning 2006 price trends.
Plans to improve the supply chain
In response to a question regarding supply-chain
optimization, 74% of manufacturing supply executives
said they plan to take new steps in 2006 to improve
their supply-chain management practices.
New or improved enterprise technology is at the
top of the list for 2006, and improved forecasting and
planning is second.
Supplier consolidation, improved inventory management, and application of lean manufacturing concepts to the supply chain are the other major issues of
concern to supply managers.
According to the survey, the five most popular
approaches are
n new or improved enterprise technology
n improved forecasting and planning
n supplier consolidation
n improved inventory management
n following lean manufacturing practices
Predicted price changes between
the end of 2005 and the end of 2006
Manufacturing
Nonmanufacturing
Predicted
Dec. 2005
71%
11%
18%
Predicted
Dec. 2006
73%
18%
9%
Higher
Same
Lower
Net
average +3.8%
Magnitude
of change
+6.7%
NA
-5.4%
Magnitude
of change
+6.3%
NA
-6.5%
+4.0%
Source: www.ism.ws/ISMReport/SemiannualROB122005.cfm.
Healthcare employment to rise
Along with increases in the price of supplies,
healthcare providers will hire more people, according
to the ISM poll, which identified health services as one
of the nonmanufacturing industries that expects higher-than-average employment hikes.
Manufacturing purchasing managers predicted
employment in their sector will increase by 1.3% during 2006.
Industries that predict 1.3% growth or greater in
employment include transportation, glass, stone, aggregate, electronic components, and metals.
Purchasing managers in service industries (e.g.,
healthcare) expressed similar plans. They named the following five objectives for 2006:
n Implementation of new or improved technology
n Supplier consolidation
n More use of e-commerce
n Better supplier relationships
n Process improvements in the supply chain
Economic factors will take a toll
Although they have ideas about what they can
do to make their supply chains more efficient, purchasers are also aware that they are subject to conditions that affect the economy as a whole.
Manufacturing purchasers said their primary concern is the cost and availability of energy. They selected oil- and petroleum-based products as their second
concern, and inflation in the cost of goods and services
as their third concern, followed by labor and benefits
costs and continuity of supply and shortages.
Nonmanufacturing supply management executives expressed similar concerns, but also said they
were worried that rising interest rates would hurt their
purchasing power in 2006.
Still, purchasing executives are relatively optimistic about the economic outlook. More than half
(57%) in the manufacturing sector believe that the
economy will improve, and 43% of nonmanufacturing
purchasers agree.❖
Hospital Materials Management, February 2006
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13
PRICE WATCH
Med-surg indices see little change
The producer price index for finished goods
dropped by 1.6% between October 2005 and November
2005 and was up 4.4% for the entire year.
In the medical-surgical categories surveyed, most
indices rose or fell by a fraction of a percent, and the
average change for the month was zero.
Compared to the prior year, index trends were
mixed. Clinical laboratory led with an increase of 0.9%,
while electromedical equipment decreased by 2.3%.
The average annual change was 0.1%.
Inflation hits 3.4% for health commodities
On the consumer side, the November 2005 unad-
justed medical-care commodities component of the
consumer price index was 280.3, up 0.5% from October
2005 and up 3.4% for the year.
With the exception of nonprescription medical
equipment—which was up by 0.3%—all categories rose
a half percent or more.
During the year, all categories increased. Nonprescription drugs and medical supplies were up by 0.7%,
and internal and respiratory over-the-counter medications rose 0.6%, and prescription drugs and medical
supplies rose by 4.3%.
Nonprescription medical equipment and supplies
rose by 0.9% for the year.❖
Producer price index
Product
Finished goods
Catheters
Clinical laboratory instruments
Electromedical equipment
Irradiation apparatus
Surgical and medical instruments
November 2005
158.4
128.7
125.4
89.9
111.3
134.9
October 2005
161.0
128.8
125.4
89.8
111.2
134.8
November 2004
151.7
128.8
124.3
92.0
111.1
134.0
Month change
- 1.6%
- 0.1%
0
+ 0.1%
+ 0.1%
+ 0.1%
Year change
+ 4.4%
- -0.1%
+ 0.9%
- 2.3%
+ 0.2%
+ 0.7%
Product
November 2005
Medical care commodities
280.3
Prescription drugs and medical supplies
355.1
Nonprescription drugs and medical supplies
153.3
Internal and respiratory over-the-counter drugs 181.6
Nonprescription med. equip. and supplies
182.5
October 2005
278.9
353.2
152.6
180.6
181.9
November 2004
271.2
340.5
152.3
180.5
180.8
Month change
+ 0.5%
+ 0.5%
+ 0.5%
+ 0.6%
+ 0.3%
Year change
+ 3.4%
+ 4.3%
+ 0.7%
+ 0.6%
+ 0.9%
Consumer price index
Recent price surveys
n January: Paper. As long as energy prices continue to rise, so will the price of paper, materials managers say.
n December 2005: Foley catheters. Even with
several new contracts on the books, Foley catheter
prices have remained stable during the past year and
are expected to stay that way.
n November 2005: IV solutions. Prices of IV fluids and related supplies rose last year—although not
as much as predicted—and they will continue to increase next year except where protected by contracts.
n October 2005: Cardiac catheters. Prices of cardiac catheters will decline next year, except where
they are frozen under current contracts.
n September 2005: Wound care. Prices of wound
14
care supplies are increasing this year, but don’t blame
the vacuum devices, silver coatings, and protein gels
that have been making news lately.
n August 2005: Pacemakers. Pacemaker prices
will rise next year, with the newest technology accounting for double-digit increases.
n July 2005: Sutures. As predicted, suture prices
remained stable during 2004, the only exceptions being
when renegotiated contracts permitted modest increases.
n June 2005: Endoscopic instruments. Endoscopic instrument prices are continuing to rise.
n May 2005: Hip implants. Prices of hip implants
will rise but stay within inflation levels.
n April 2005: Protective apparel. Depending on contracts, prices will stay level or drop as much as 10%.❖
Hospital Materials Management, February 2006
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JOB MART/PEOPLE
Obituary
Corris Boyd died December 16, 2005, after a fourmonth battle with cancer.
He was vice president of supply chain optimization at Triad Hospitals in Plano, TX.
Previously, he was a member of the leadership
team of the HCA Pacific Group and an assistant vice
president at HCA in Nashville, TN.
He was a member of the HMM editorial advisory
board.
Before beginning his 17-year career in healthcare
materials management, Boyd was a commissioned officer with the U.S. Army reserve.
He earned a Bachelor of Science degree in business management at Northwestern State University in
Natchitoches, LA.
People on the move
Debra Lynn Ross was named director of communications at Consorta in Schaumburg, IL. She succeeds
Sheila Reed, who left to accept a position with Novation
in Irving, TX.
Positions available
Alameda County Medical Center in Oakland, CA,
308 beds, is seeking a lead central supply technician.
Contact Porcia Moses at 510/535-7533 or fax your resume to 510/437-4611.
Evergreen Healthcare in Kirkland, WA, is seeking
a materials manager. Contact Evergreen Healthcare,
12040 NE, 128th St., Kirkland, WA 98034 or apply online
at www.evergreenhealthcare.org.
Rex Healthcare in Raleigh, NC, 394 beds, is seeking a clinical resource analyst. For more information
and to apply online, visit www.rexatwork.com and reference requisition number 3284.
Roanoke-Chowan Hospital, Ahoskie, NC, 124 beds,
is seeking a director of support services who will be
responsible for materials management. Contact Roy
Lewis at 252/209-3263 or fax 252/209-3252.
Bayhealth Medical Center in Dover, DE, 211 beds,
is seeking a surgical material services manager and
warehouse distribution services manager. Contact
Robin Roberts, human resources department, at 866/
305-5627 or fax your resume to 866/866-6442.
The University of Virginia Health System in
Charlottesville, 632 beds, is seeking two contract specialists and a supervisor of medical center accounts
payable. Apply at www.healthsystem.virginia.edu/
internet/humanresources.
Parkland Health and Hospital System in Dallas,
987 beds, is seeking a director of value analysis.
Contact Yolanda Roach by fax at 214/590-6918.
Cooperative Services of Florida in Ft. Myers is
seeking a contract negotiator for pharmacy and other
therapeutic and diagnostic supplies. Call William
Tousey at 239/303-3458 or fax your resume to 239/3030754.
Barlow Respiratory Hospital in Los Angeles, is
seeking a purchasing assistant. Contact Judy Meister
at Barlow Respiratory Hospital, 2000 Stadium Way,
Los Angeles, CA 90026, or e-mail jmeister@barlow2000.
org.
Kaiser Permanente in Oakland, CA, is seeking a
materials cost specialist for its Redwood City, CA, facility. Fax your resume to 408/342-6690 or e-mail tessa.r.
[email protected]. Reference code RW.0500028.
Childrens Hospital Los Angeles, 330 beds, is seeking a supervisor of supply processing and distribution.
Contact Childrens Hospital Los Angeles, 4650 Sunset
Blvd., Mail Stop #87, Los Angeles, CA, 90027; call 323/
669-2159; or send a fax to 323/663-1645.
Triumph HealthCare in Houston is seeking a manager of materials management for one of its long-term acute
care hospitals. Contact Triumph Hospital Clear Lake, 350
Blossom St., Webster, TX 77598, or call 713/807-8686.
PeaceHealth in Bellevue, WA, is seeking a pharmacy contracts manager in the materials management
department. Contact Jessica Deal at PeaceHealth System Office, 14432 SE Eastgate Way, Suite 300, Bellevue,
WA 98007-6412; call 425/747-1711; or send a fax to 425/
649-3825.
Broadlane in Dallas, is seeking an expeditor for
an outsourced materials management department in
Cincinnati. Fax your resume to 972/813-8439.
Christiana Care Health Services in Newark, DE,
1,000 beds, is seeking a logistics manager. Fax your
cover letter and resume to S. Ellsworth at 302/623-0324,
or apply online at www.christianacare.org.
Marian Community Hospital in Carbondale, PA, 112
beds, is seeking a director of materials management. In
July, Marian became a member of Catholic Health East,
Newtown Square, PA, through its membership in Maxis
Health System. Contact Marian Community Hospital,
100 Lincoln Ave., Carbondale, PA 18407, or call 570/2811000. ❖
Hospital Materials Management, February 2006
© Copyright 2006 by HCPro, Inc. For permission to reproduce part or all of this newsletter for external distribution or use in educational packets,
please contact the Copyright Clearance Center at www.copyright.com or 978/750-8400.
15
WORTH READING
Overhaul of military healthcare system offers
lessons for civilian disaster response strategy
U.S. Air Force Lt. Col. Paul Friedrichs, MD, recalled riding in a medical evacuation helicopter out of
a battle zone in Iraq with two patients, both severely
wounded and on respirators.
Had this been the first Gulf War, the men would certainly have died of their injuries. Yet because of the military’s rapid advancement in saving lives under the worst
imaginable conditions, they survived because of a flying
intensive care unit.
The military’s medical progress while meeting tight
budget constraints earned Friedrichs an invitation to
meet with executives at Colorado hospitals in December
2005 to explain the transformation of military healthcare
and how its lessons apply to civilian hospitals.
Friedrichs is chief of aeromedical and clinical services at Peterson Air Force Base in Colorado Springs, CO.
He was stationed at the Pentagon on September 11, 2001,
and cared for terrorist-attack victims there. He later
served as commander of med-evac operations in Iraq.
He told attendees at the Colorado Healthcare
Strategy and Management meeting that the military has
come a long way from a one-size-fits-all approach to caring for troops to providing flexible, mobile resources that
can handle everything from natural disasters to preventive care for reserve forces awaiting deployment.
“When we deployed for Desert Storm [in 1991], we
were structured very much like we were structured in
World War II. We had large medical units,” he said.
Throughout the Cold War, he explained, the military
relied on large hospitals located at places of strategic importance and staffed by skeleton crews to accommodate
wounded troops.
But healthcare technology has evolved to allow rapid
evacuation from battlefields, with the aid of portable ventilators and other equipment. Large, on-site hospitals have
become obsolete. They have been replaced by modular
units that are transported to combat locations only when
needed.
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Even operating rooms (OR) have shrunk in size, he
said. “We used to transport an OR that was like the back
of a truck,” he recalled. “We’re now able to deploy a fiveman team that carries the [OR] on their backs. That
gives us huge flexibility.”
Friedrichs said medical officers have begun to reexamine their policies for keeping troops combat-ready. For
most of military history, he noted, ailing troops waited for
symptoms to appear, then went on “sick call” for treatment. Now the military is focused on preventive medicine, not waiting for symptoms to appear. ❖
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Hospital Materials Management, February 2006
© Copyright 2006 by HCPro, Inc. For permission to reproduce part or all of this newsletter for external distribution or use in educational packets,
please contact the Copyright Clearance Center at www.copyright.com or 978/750-8400.