Saving Big on Medical Supplies.

IPA cuts procurement costs by 20 percent.

Most healthcare organizations will agree--the responsibility for ordering medical supplies has grown more complex and time-intensive than ever before. For the staff at High Desert Medical Group (HDMG) in Lancaster, CA, ordering medical and office supplies was a time-consuming and often frustrating process. Monthly escalating costs made it difficult to plan ahead and to adhere to the annual budget. Placing orders with multiple vendors posed management challenges and tracking issues. Ordering via phone and fax was cumbersome and necessitated additional personnel and resources to appropriately administer.

PROBLEM

High Desert Medical Group is an Independent Practice Association (IPA) of 50 primary care and specialty physicians who serve 45,000 patients covered by Medicare, Medicaid and commercial plans. It purchases $85,000 monthly in medical and office supplies. Its busy doctors and support staff had little time for keeping track of records, knowing which vendors to call and negotiating prices.

One major problem was having 24 separate shipping locations including 22 IPA offices and two separate clinics, each with different supply and administrative requirements. The various department and administrative staff were required to fax orders for medical supplies to a centralized purchasing department. Medical supplies were ordered Wednesday and Thursday each week, and the ordering process took two full days. Staff had to review each item to determine the proper supplier and then fax the order to that supplier.

Ordering office supplies was just as time-consuming. Orders would be completed by the requesting department and subsequently forwarded to the operations department. The operations department would then determine the lowest price supplier for each item and place the order. Order placement took one full-time employee.

SOLUTION

In late 1999, HDMG decided to pursue alternate methods. We wanted a cost-effective solution that yielded time savings, too. The investigative search involved checking online resources, consulting colleagues and contacting trade and professional associations for counsel.

E-procurement surfaced as a progressive option with long-term benefits. The team evaluated several vendors, reviewed input from a number of colleagues and appraised competitive sites. We decided on Everything4MDs (E4MDs) for several reasons. Price was an important consideration; we compared several Website options and E4MDs was the lowest in price. Availability of the huge variety of medical and office supplies we use was also important.

Another significant factor was ordering convenience. We wanted to eliminate all the staff legwork in researching various suppliers and negotiating prices. Now no one has to research suppliers. We order both medical and office supplies online and have them shipped directly to the correct office.

Conserving time was the final and possibly most important factor. Both the operations and purchasing departments save considerable time. The purchasing department enters orders for a few hours Wednesdays and Thursdays; operations enters for a brief time Fridays. Now, HDMG receives one invoice a month for supplies. We no longer wait for invoices from several suppliers to calculate supply costs. Now they can be tracked online by E4MDs, and we know our costs immediately.

There were no training hurdles or implementation barriers. We found the site was extremely easy to navigate and understand. We simply logged on to the Website, registered and began ordering. We currently order brand name medical supplies, office supplies, durable medical equipment, vaccines and injectables, janitorial supplies and reference books from E4MDs.

Also, we can check shipping status online and track purchases by department or by company using the purchase history report. The Website enables us to print order confirmations and look up previous orders on the system. The order template is convenient and easy to use. We receive our products two to three days after placing the order.

RESULTS

HDMG has been able to save more than $210,000 annually on medical supplies and equipment. In addition, it has obtained management tools not available from the paper-based fax ordering system previously used, and these have definitely eased the workload for administrative staff. Inventory tracking and controls have helped us improve our approach to ordering. The system knows what products we have on hand and alerts us when we over-order. We no longer order and house an overabundance of products; the system alerts us when the order is inappropriate, helping us maintain the right quantity of products for all 24 locations at all times.

For more information from Everything4MDs, circle 204

SOURCE

Christine Jackson Director of Operations High Desert Medical Group Lancaster, CA 661-945-5984

SERVICE/COMPANY

Everything4MDs www.everything4M Ds.com