The Veterans Affairs Department has awarded $4.6 billion in supply chain contracts for distribution of medical-surgical supplies to four major vendors. They carry a new caveat that many other health systems are demanding: supplies must be able to be distributed in the lowest unit of measure so that they can go straight to the point of care.
American Medical Depot, Kreisers, Cardinal Health and Medline Industries were chosen as the VA's prime medical-surgical vendors in 20-month contracts. They'll provide supplies to the agency's 152 medical centers and nearly 1,400 other facilities.
Health systems are increasingly looking for smaller packages of supplies to be delivered directly to hospital nurse stations and outpatient locations, to free up valuable storeroom space in hospitals for patient care, and to ensure that providers aren't spending too much time managing supplies. Some hospitals manage their own warehouses that break down bulk supply orders into smaller units, while others have depended on medical-surgical distributors, many of which have made significant investments in automation equipment and technology to streamline the process.
Ordering items in lower units of measure will raise prices in some cases because of added costs for distributors, but this should be offset by the efficiencies that come with using smaller packages, said Jodi Cokl, chief logistics officer for a network of VA facilities serving Indiana, Kentucky, Michigan and Ohio.
“We were (previously) having to buy in bulk, and in some cases we would have to redistribute to other medical centers in order to get rid of excess,” Cokl said.
The contracts are broken up geographically, with AMD covering much of the East Coast and Puerto Rico; Kreisers generally covering the Midwest and some of the South; Medline covering several Southern states; and Cardinal covering most of the Western U.S. as well as Hawaii, Alaska and Guam. AMD and Kreisers are designated as small business vendors, which the VA is required to include in contracts.
Medline, which is new to the program, will also serve VA mail-order pharmacies and a number of non-VA federal agencies as a part of the contract, including HHS, federal prisons, the Indian Health Service and the State Department.
“As a newly awarded vendor under the VA Medical Surgical Prime Vendor contract, Medline is honored for this opportunity to provide essential products and services that will directly help care for our veterans,” said John O'Daniel, the company's vice president of government sales, in a statement. “We look forward to helping healthcare providers perform at their best and driving greater efficiencies, savings and patient outcomes as part of this new VA relationship.”
