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Free Contract Templates
Maybe you've faced this scenario or you're facing it right now. Maybe it's you. Someone either fresh from college or graduate school or someone from the procurement world outside of healthcare decides to join the hospital materials management ranks. Armed with either textbook knowledge or non-healthcare industry experience, this person must hit the ground running in the hospital because the facility seems to be in perpetual crisis mode (along with that perpetual inventory program).
Healthcare Purchasing News Senior Editor Rick Dana Barlow questioned some of the thought-leaders and key executives in the field for what sage advice they as seasoned professionals would give this person to help him or her make a good impression and achieve some winning results right out of the gate.
We asked that each go beyond the obvious and focus on individual professional practice, We sought the kind of wisdom (that only comes with experience) that each wishes he or she had when they launched their careers, along with the key fiscal and operational qualms and quirks of the job that hospital materials managers tend to overlook (e.g., relationships with colleagues, customers, GPOs, vendors).
Some of what they had to say might be new revelations; others might be useful reminders. Either way, we've collected more than 100 helpful hints and useful tips from experienced and knowledgeable industry sources you won't find anywhere else.
* Listen to and involve the caregiver/end user before, during and after the contract negotiation process.
You must recognize that you are not in [clinical] operations and therefore must understand their challenges, needs and objectives if you are to be successful in your contracting role. A lot of people think contract "compliance" comes from a top down, forced approach. True compliance is only achieved when the caregiver believes you are contracting for products and services that are right for the patient and meet the needs of [clinical] operations.
* Surround yourself with great people who have common, cultural values. From my experience, the best people are service-oriented, team players who love to work with other people in achieving organizational goals and objectives. Also, organizational improvement is more easily attained when you have people who have an innovative spirit; people who are always striving to do things better versus trying to maintain the status quo. Finally, most managers look to hire the most technically competent people. While technical competence is vitally important, it is only a starting point. Surround yourself with technically competent people who practice the Golden Rule, treat others the way you would want to be treated.
* Realize that vendor and provider objectives are not aligned. Vendors will throw the word "partner" at you a lot in your new role. Understand early on that real partnerships, where objectives and interests are totally aligned and mutually beneficial, are not possible in a vendor/customer relationship. For example, the provider wants to lower their costs (purchase less) and the vendor wants to increase their revenue (sell more). Having said that, positive vendor relationships are critical to your success. Therefore, it is very important to understand where objectives are not aligned, accept it and find ways to negotiate/mitigate the negative impact. The only' successful contracts and relationships for the long run create wins for both the vendor and the customer.
* Establish a standard process to follow for all contracting projects. At HealthTrust Purchasing Group, we follow a standard process that includes:
--Involving the care giver/end user in all phases of the project. The rational is discussed above.
--Ensuring all contracts receive appropriate legal due diligence. This includes not only the traditional legal role of defining and protecting you and your customers rights but also ensures compliance with all governmental rules and regulations.
--Ensuring all contacts receive appropriate financial due diligence. Financial processes include validation of financial projections, savings calculations and assumptions as well as contractual financial terms such as payment terms, freight, inventory, etc.
* Based on my experience, contracting personnel like to handle all phases of a contracting process. You should recognize and value the diversity of technical experience (eg., clinical, legal, financial, etc.) needed to complete a project that is financially and operationally successful in the eyes of your customer. You don't have to be an expert in all technical areas. You must follow a standard process and involve appropriate technical expertise when needed.
* Having and controlling the information is critical. If you are primarily relying on the information that others provide you to make decisions, then you are probably making decisions in the best interest of those who gave you the information. At HealthTrust, we have made significant investments in standardizing our systems, product and vendor numbering methodology and our underlying databases. This investment has provided the highest ROI possible for our members. For example, this information provides critical intelligence to ensure new contracts provide the best pricing for all our membership, to understand current and projected volumes, which is the basis of price negotiation and to understand HPG vendor market share data versus national or vendor provided data.
--Jim Fitzgerald, president, HealthTrust Purchasing Group, Nashville, TN
* Within your first month on the job, spend one full day performing each of your department's functions. That means one day transporting patients, one day picking and distributing floor stock, one day receiving and delivering nonstock orders, one day filling the storeroom shelves, one day EDI'ing orders and creating requisition templates, one day wrapping and delivering packs, etc. You'll get to know your staff, they'll respect you more, you'll gain insight into their day-to-day concerns and maybe come up with helpful solutions to be implemented right away.
* Make it a habit to meet weekly with your boss for a minimum of 90 minutes--no excuses. Have a formal agenda, with documented cost savings and other facts at hand. This face-to face prevents a lot of surprises at your annual review time.
* If you've got a Value Analysis Team that seems "stuck in neutral" (Same agenda items month after month, no documented cost savings, non-productive lunch meetings, lackluster attendance, no cath lab or O.R. products reviewed, minimal administrative support, etc.), it's time to kill the committee and take some time to restructure/reorganize the process for success.
* Get in early and meet the director of surgery daily for coffee. It's always good to know what's on the mind of your largest customer. You'll also want to keep them in your back pocket if you need an ally. It's good to know what small fires you can extinguish before they turn into out-of-control blazes.
* EDI to every vendor who has the capability and take every "early pay" discount when of feted.
* Don't do stupid things--you know what they are, and you know better.
* Push your GPO to do some free analysis work for you.
* Communicate your department's successes, communicate your five-year M/M Project Plan to everybody whom it impacts, communicate via monthly staff meetings, communicate via a M/M Newsletter, communicate.
* Benchmark your operations against itself; place charts for all staff to see how they're doing.
* Meet with peers at local hospitals to see how you can help each other (benchmarking, "emergency" supplies, backup stock, common supplier problems, "economies of scale" purchasing, similar capital purchases, shared educational initiatives, etc.).
--John E. Siedlinski, president and CEO, Materials Management Consultants Inc., Naperville, IL.
* Start with small wins to build credibility and momentum, prior to taking on bigger, more risky endeavors. Do what you say you are going to do and don't make promise you can't keep.
* Trusting one source of information can be suicidal. Reliable data and information is hard to come by, but essential if you are going to be successful. Let sales representatives do the analytical work to prove their point, but never trust the results until you have validated all of their assumptions and calculations. Be aware of all of the supplies and/or services that will be impacted by any change you are considering. Always consider the impacted contracts, their contract terms, and your options of how and when you can get out and what the penalty for doing so is. Finally, always involve the stakeholders in your decision process.
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