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Cook hospital panel ignores Stroger, passes purchasing plan

Saturday, May 30, 2009
Daily Herald
by Rob Olmstead

The finance committee of the independent Cook County Health and Hospitals System board ignored a plea Friday from Cook County President Todd Stroger to slow down on a plan to engage in consolidated purchasing for the hospitals.

Stroger had sent the panel a letter Thursday night, asking members to hold off on the vote because he feared it would cut minority and female vendors out of the loop.

But the finance committee, led by Chairman David Carvalho, pressed ahead, saying the new arrangement with a group-purchasing organization has been contemplated for decades and was long overdue.

"To those that say this is being rushed, I'd say it's been 18 years," said Carvalho, after recounting the history of numerous attempts to enter into a group-purchasing arrangement.

Hospitals CEO Bill Foley urged the board not to delay the vote, later noting it will save $20 million to $30 million annually and is a given in the industry.

"I don't even call it a best practice. It's just a standard practice," said Foley.

In the end, by a unanimous voice vote, the panel approved contracting with UHC/Novation, an Oak Brook-based nonprofit buying organization that purchases supplies for hospitals across the nation. By buying in volume, they often can provide hospitals with cheaper supplies. The group charges companies with which it contracts 3 percent or less for its operating costs. Any money left over after that is then kicked back to member hospitals, officials said.

Immediately after its vote, the panel also approved a $50 million, two-year contract with Owens & Minor, a Virginia medical supply distributor that the GPO will utilize.

That is where many of the complaints from individual vendors stemmed. Businessmen and businesswomen said that GPO groups and distributors, despite Novation's protestations, do not work with small or minority-owned businesses, even when they are the lowest bidder.

Novation representatives noted they have several minority companies they regularly work with, but critics say those are national companies, which will leave small, local companies out of the deal.

But Foley noted that the hospital system is not obligated to go with Novation for any purchase, and can even solicit bids directly in addition to what Novation brings to the table. Further, Novation will be responsible for meeting the county's requirement of 35 percent minority participation in contracts, Carvalho and Foley said.

Betty Hancock-Perry, the county's contract enforcement chief, opposed the vote and said that Novation had not responded to multiple requests for information from her office.

Lamont Robinson, Novation's diversity chief, acknowledged Novation had been nonresponsive to the inquiries, but said the former employee responsible for that had been replaced, and he would now be in charge of things.

"We heard a lot of that (complaints). That's the reason they decided to bring that all in under me," said Robinson to Hancock-Perry

While the panel pressed ahead Friday, the contracts with Novation and Owens & Minor still need to be drawn up and presented for another vote before the board before taking effect.



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