3 Healthcare Strategies for Mastering Vendor Compliance

It is getting to be clearer every day to us that your vendors are a crucial component in your healthcare organization’s supply chain expense management success…now and in the future. However, remember the old axiom, “Trust, but verify.” Your vendors need to be compliant in their promises, guarantees, and stratagems for you both to be truly successful. Here are three strategies for mastering vendor compliance that will enable you to measure and manage you and your vendors’ success:

  1. Automatic Savings Audits: No savings projection is accurate once the agreement is in place, since things change (volumes, protocols, and assumptions) and people change over the lifecycle of the contract or project. Therefore, you need to audit each GPO, regional, and local agreement you sign to ensure that you are obtaining the financial results you expected or else you will be hoping for the savings to happen, which isn’t a strategy.
  2. Automatic Standardization Audits: Trusting that standardization is a secondary function of your GPO, regional, or local contracts is a contradiction in terms. SVAH’s research has demonstrated that the highest standardization percentage that we have seen at systems or IDNs is 36%. This leaves 64% of these organizations’ products, services, and technologies unstandardized. To avoid this same eventuality, you, too, need to audit your standardization compliance annually. Then, monitor your compliance on a quarterly basis.
  3. Automatic Agreement Audits: Realizing that things change and people change over time, not auditing your GPO, regional, and local agreements annually or at the end of their lifecycle could be very costly to your healthcare organization. For instance, we audited a five-year I.V. pump contract of which the cost had increased every year, which wasn’t allowable under the contract. More importantly, no one knew about these price increases, until we looked under the hood of this contract. Don’t let this happen to you!

Vendor compliance doesn’t happen by itself. It must be prearranged, managed, and monitored as an integral part of your supply chain expense agreement compliance. However, the benefits of doing this will greatly affect your healthcare organization’s bottom line.