Hospitals Explain Vendor Paths

June 1, 2007
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GRAND RAPIDS — Acute care hospitals in West Michigan spend millions on goods and services every year.

How much of that spending is captured by local businesses depends on the chutzpah of the businesses themselves.

"Give the purchasing department a phone call, just saying, 'Hi, here's our product line.' If you have anything (we need), we'll ask you follow up with literature," said Jim Jednak, director of supply chain management for MetroHealthHospital. "The more information they can supply, the better the chance they'll get business."

The biggest taboo? Directly contacting clinical staff, such as doctors and nurses, he said. They are busy taking care of patients and are outside the purchasing process anyway, he said.

"I've seen a lot of sales reps for different companies really limit themselves by going down the wrong path," Jednak said.

Metro Health and Spectrum Health are members of VHA, a multi-state association of hospitals that provides access to discounts on the tremendous amount and variety of items used in hospitals. The VHA members in West Michigan, which include smaller organizations such as HollandHospital and PennockHospital in Hastings, are affiliates of Spectrum Regional Hospital Network, allowing them to find even more purchasing power as a group.

Saint Mary's Health Care is owned by Trinity Health, a Novi-based Catholic operator of 46 hospitals in seven states. With its size, Trinity Health arranges for purchasing contracts common to all of its hospitals, said Saint Mary's CFO Steve Pirog.

All three of Grand Rapids' acute care hospitals are nonprofits.

But outside of those purchasing contracts, hospitals buy a variety of local goods and services and say they routinely review local companies for inclusion on vendor lists and requests for proposals, from printing and catering to window washing, vehicle repair and grounds keeping.

"A lot of folks think hospitals are all cotton balls and Band-Aids, needles and syringes," Jednak said. "But it's maintaining a building, like window washing and pest control."

Those in charge of buying goods and services for hospitals say that when the product meets their need and they are not trumped by existing contracts, they are eager to work with local businesses.

"The best way to do that is contact the purchasing department at Saint Mary's and make an appointment to meet with us," said Gregory Mott, director of supply chain at the 230-bed hospital. "We do meet occasionally with people who walk in, but we're not always available."

Sometimes the hospital has flexibility with certain services, he said. For example, Trinity Health has business forms printed on a chain-wide basis; however, if Saint Mary's has an individual need, such as a brochure, the hospital might work with one of several local printers, Mott said.

He said he also can help local businesses make the right contacts to bid on Trinity Health business.

Jednak said Metro Health, being independent and the smallest of Grand Rapids' three hospitals, has flexibility that Spectrum Health and Saint Mary's may not.

"We've got a medical supply distributor, handling several million dollars of our business, and the main reason we selected them is their distribution center is in Kentwood and they hire local people," Jednak said. "We're trying to follow the promise to help support our own community."

Spectrum Health does the bulk of its business, $180 million worth, through VHA, said Chris Baskel, director of supply chain.

"That does leave some things left over," he said. "Basically, we do a lot with local catering, cleaning services, floral — the things you would expect. We do try to seek out local when we can and do a fairly good job of it."

He cites Spectrum's work with a Tillman Industries subsidiary to make two plastic products, helping owner Roosevelt Tillman test prototypes, make connections with VHA and eventually market the two devices.

Baskel said he's managed to connect the maker of an orthopedics device and local physicians working on a medical device with the clinical staff to review prototypes.

"We're doing stuff like that, which I think is exciting and hopefully can stimulate our medical economy," Baskel said.

But often services are requested and purchased by the department using them, such as when the marketing department purchases advertising services, or the information technology department purchases a consultant's services, he said. Those are examples of areas that are outside his department's expertise. Sometimes purchases are made after a group from the department that uses them evaluates the vendors and their proposals, he said.

"We do have a purchasing office where vendors will walk in all the time," Baskel said. "I will try to direct them to the right spot."    

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