In the past couple of years there has been a proliferation of vendor credentialing activities including, but not limited to, new hospital access policies, the appearance of new vendor credentialing contractors, an array of investigative research projects conducted by healthcare product suppliers, manufacturers, GPO’s, IDN’s and healthcare related organizations. The catalyst can be traced back to the Joint Commission’s (JCAHO’s) Proposed Standards for Comment, which has been erroneously misconstrued as a “Recommendation”.
Anyone approaching the vendor credentialing issue immediately asks “How does this affect my business?” “What are my alternatives.” “How can I make my voice heard?” These are the questions that will be addressed here from a distributor perspective.
To better understand the distributor’s perspective, a brief description of Tri-anim Health Services, Inc. is required. Tri-anim is the nation’s largest independent distributor of specialty healthcare products to hospitals, long-term care facilities, surgery centers and nursing homes. We have over 130 captive acute care and surgical representatives that routinely visit departments such as Purchasing/Materials Management, ICU, CCU, NICU, ED and the OR. This does not include regional sales managers and various management personnel that co-travel with the reps.
With so many reps and managers visiting hospitals, Tri-anim’s financial exposure to vendor credentialing fees is over $1.1M and this figure only represents the “hard” costs (fees, testing, courses, etc.). There are also “soft” costs, which are more difficult to determine but have impact such as administrative costs, lost sales time and the additional load on management and HR functions. Lastly, there are annual reoccurring costs as vendor credentialing registrations usually require yearly renewal. Needless to say, an expense of this magnitude has our attention.
So how did this get so out of hand and can these costs be minimized? First, Tri-anim does believe, as does so many of the other organizations we have consulted with, that there should be some form of credentialing as a function of required or necessary hospital access (i.e. inservicing). However, in this non-regulated environment a cottage industry, vendor credentialing contracting, has emerged. Their modus operandi fall into two main categories, which greatly impacts costs and scope but not effectiveness, and questions the motivations of some vendor credentialing companies. Are they driven by dollars or patient safety? This is the most overlooked and misunderstood issue regarding program implementation.
A simple analogy can illustrate the difference in the two categories. Say that you are going on a road trip and your route takes you through many states. As long as you have a valid driver’s license, and follow local laws, you are permitted to travel with this one license or driver’s credential. Let’s refer to this as the “One Credential per Rep” method of vendor credentialing. However, many vendor credentialing companies advocate and sell programs to hospitals that require “One Credential per Hospital” (Tri-anim’s $1.1M+ exposure). In effect, per our road trip analogy, you would be forced to get a license for each and every town, city, municipality and state regardless of the redundancy and cost to you. It is estimated that this approach would add anywhere from $1.7B to over $2.7B of additional costs to healthcare.
We all need to become more knowledgeable and proactive in order to direct hospital’s choices towards the “One Credential per Rep” method. Several health industry associations have created IHAC (Innovative Healthcare Access Coalition) to educate customers and advance a more reasonable solution. Current members include IMDA, HMMC, HIRA, HIDA and MDMA.
Obviously, if distributors have unreasonable costs forced upon us, the only in-hand response is to increase product prices which will only add to healthcare costs.
Bill Vitez, Director of Marketing , Tri-anim Health Services, Inc.