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Health system approves controversial purchasing plan

Friday, June 05, 2009
Chi-Town Daily News
by Alex Parker

The Cook County Health and Hospital System board this morning approved a contentious purchasing plan that was opposed by some county commissioners and local business owners.

The board voted to purchase medical supplies from a group purchasing organization, which is a pre-approved list of vendors. County commissioners had been critical of the move, calling a public hearing several weeks ago, and saying it would hurt the local economy.

But health system CEO William Foley said such arrangements are standard practice for hospitals. Officials believe it will save the system between $20 million and $60 million a year.

David Carvalho, the system’s finance committee chairman, said using a GPO has been discussed for nearly 20 years.

“It was quite the will of the finance committee to move forward with this,” he said.

The GPO, UHC/Novation, already provides the health system’s pharmaceuticals.

Last week, County Commissioners Roberto Maldonado and Joan Patricia Murphy asked the health system to hold up a vote until the Cook County state's attorney could determine whether the plan would violate the county's minority purchasing requirements. The committee declined, and approved the measure last Friday.

Board members were adamant that the group purchasing program meet the requirement, which mandates that businesses owned by women and minorities receive 35 percent of aggregate contracts.

Local business owners are concerned they will be cut out of county purchasing when the new plan takes effect. While health system officials have maintained they will give preference to local businesses, they are committed to the bottom line.

“We have no interest in continuing a relationship with a vendor if they are not the low vendor," Carvalho said. “We are not like a small business where you develop a lifelong relationship with your suppliers. If a GPO saves us money, helps us meet our goals, we have no interest who are our contractors.”

However, board members stressed they are under no obligation to purchase from UHC/Novation if there are better deals.

Health system officials say they will begin purchasing from UHC/Novation by Sept.  1.


Daily News Staff Writer Alex Parker covers public health. He can be reached at 773.362.5002, ext. 17, or alex [at] chitowndailynews [dot] org.



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