Archive for April, 2009
Documentation and Relationship / Process Optimization — That’s What We Do
Jason Busch, over at SpendMatters, just took a stab at Segmenting the Supplier Information and Relatonship Management Market. He defined three approaches: analytics and predictive forecasting; data centric and data management; and documentation and relationship/process management optimization.
The first group of providers fall into what I’ll term the documentation and relationship / process optimization bucket. These are providers that fundamentally approach the supplier information and relationship management challenge from the vantage point of documenting supplier credentials, certifications, relationships and other requirements. They also aim to optimize the overall supplier relationship and streamline internal processes for managing suppliers. In some cases, organizations might use these providers to manage only a subset of their supply base for certain programs (e.g., performance, environmental compliance, supplier enablement, etc.) But in others, these programs will focus on getting 100% — or close to 100% — of a supply base on-boarded or into a centralized system. In the later scenario, companies might opt to manage basic information for the broader group (e.g., certifications, risk) while taking a highly focused, deeper relationship and information management approach with a select sub-set of suppliers for specific programs (e.g., performance) or based on the value of that sub-group to the business. What providers fall into this bucket? Hiperos, Aravo, Browz, Vendormate are four that come to mind immediately, but I’m sure there are more.
It’s an interesting taxonomy. And from our perspective a strong description of what we aim to deliver. In healthcare in particular, the relationship between the purchasing hospital and the vendor company, as well as the between the medical staff and the vendor representative, is complex, overlapping, disjointed, and misunderstood. And yes, Vendormate tries to provide the central view of the relationship that allows for strategic supplier management.
If you’re interested in keeping up with the wide world of spend management, Jason’s blog is one you should keep an eye on.
Add comment April 17, 2009
Credential the Company, Not Just the Rep
Ruth Damron, Clinical Resource Manager, recently spoke with us about the vendor management process at Sisters of Mercy Health System (Mercy). Beyond the typical healthcare provider concerns about Joint Commission audits and reps in the halls, she’s looking at the vendor company. Her on-boarding process includes:
“Background checks for the financial health, conflicts of interest, leins, liability, bankruptcies, etc., and any FDA recall. That’s what you want to know. You want to know if there’s anyone out there who you shouldn’t really partner with in the vendor community. So, that’s what our GPO is looking at as part of their pre screening.”
Business due diligence like this is common in manufacturing supply chains, but not so much in healthcare. But for Mercy, this is a logical extension of its unique centralized supply chain model.
Mercy’s goal is to build vendor partnerships where both the buyer and the seller have clear expectations of service, price and volume.
Partnerships are built on trust and experience, and due diligence can jumpstart trust.
Add comment April 7, 2009
I Can’t Sign That
As healthcare systems roll out vendor credentialing programs, it’s important to understand what is and is not within the individual rep’s authority to agree to.
Vendor credentialing in healthcare mixes the credentials of individuals with their employers, but the average employee cannot enter into agreements on behalf of the employer.
All in all, suppliers want to provide the information their buyers need, but there are a few items occasionally requested in vendor credentialing programs that give supplier management pause:
Anything that Affects Contract Terms –The account representative doesn’t have the authority to sign off on anything that modifies contract terms. Healthcare buyers sometimes take the launch of a vendor credentialing program as the chance to slip in termination clauses, but that’s not appropriate. If it’s important enough to modify a contract, it should be included in the contract proper.
Penalties – Penalty clauses for violating a hospital policy that state the contract could be terminated or require termination of the employee. Again, if it’s that important, it should be negotiated as part of the contract.
Business Associate Agreements – Account representatives are not in the position to accept a Business Associate Agreement. This is even more significant now with the expansion of HIPAA requirements in relation to business associates in relation to the Stimulus Plan. (In brief by February 2010, business associates must meet the same security and privacy standards as the healthcare provider.)
Indemnity – Account representatives typically are not directors of their employers so they have no authority to approve indemnification or liability agreements.
An inherent value of vendor credentialing programs is a central view of the status of all the desired characteristics of the supplier company as well as account rep. So if you can’t ask for these essential agreements, what can you do?
Store the Document – Your vendor credentialing program is a great tool for information management. Leverage the tool to store the document and automate expiration alerts. Healthcare systems can certainly ask the representative to add the current attestation of the already-negotiated-indemnity coverage to the system. Just don’t ask them to personally sign off on the agreement.
Add Vendor Credentialing to Your On-boarding Process – The line between what the rep can agree to and what the company can agree to is crisper during the contract negotiation phase. Articulate your vendor credentialing program participation requirements as you are negotiating the contract. That way each side walks into the relationship with a clear understanding of expectations. Appropriate supplier management can sign off on entity-to-entity level requirements, and the account representative can focus on what they do best – serving the customer.
1 comment April 1, 2009
