Vendor Compliance for Supply Chain Management

Healthcare worker holding tablet grabbing paper off shelf

Supply chain management in healthcare has evolved from straightforward purchasing into a profession where cost, quality, and safety intersect to form a complicated framework of responsibilities. As the healthcare industry has grown, so too has the area of responsibility for the supply chain manager, and vendor compliance management has become crucial to keep healthcare organizations secure.  

Safety management in the supply chain may be the area that has most evolved. Supply chain managers who have overlooked putting a process in place to effectively check vendors and their products for safety and security not only put their jobs on the line, they risk the reputation and financial security of the entire organization. It’s important for supply chain managers to do their due diligence and implement best practices for vendor compliance management to avoid exposing themselves and their healthcare organizations to unnecessary risk.  

Supply chain management encompasses cost-containment, quality, and patient safety; all can be achieved with comprehensive vendor credentialing.

Supply chain managers are responsible for all vendor and supplier relationships and contracts, including oversight of representatives that make in-person visits to see staff and work on systems. There was a time when a vendor would simply ‘drop-in’ to talk about a new drug or the latest supplies, but for most facilities, those times are gone for good reason. Access management for vendors and other visitors improves the safety of the community and reduces risk of noncompliance and reputational damage. 

Why are supply chain managers more involved than ever? 

More emphasis on privacy 

Technology has made communication within a hospital or health system much easier, but it also brings increased responsibility to protect all information within the organization. Access to a single computer could potentially provide admission to an entire healthcare organization and confidential data. This was not the case years ago with paper records and before HIPAA laws. 

Security of facilities 

Over time, hospitals have grown increasingly liable for the safety of their patients, staff, and visitors. In the past, it was not uncommon for vendors and suppliers to literally wander the halls of a facility. Now, it is essential to know who is in the hospital at any given time to mitigate the risk of theft, unauthorized physical access, violence, and more. Managing facility access for every individual at every point of entry is critical. Unfortunately, the worst can happen, and rigorous supply management standards are a critical line of defense against vendor risks.  

Infection risk mitigation 

Many facilities implement a comprehensive supply chain management or vendor compliance management software only after a person has been identified with a disease that puts other patients and staff at risk for infection. Establishing a secure protocol for vendor access is essential to mitigate vendor risk and provide evidence that an organization is making every effort to protect its population from disease. This has been become especially critical in recent years due to the COVID-19 pandemic.

Increased control over the supply chain 

When vendors need to be credentialed in order to have access, supply chain managers have more control over the products that are coming into their facilities. They can ensure supplies have been sourced from safe, reliable vendors. Additionally, control over the supply chain helps reduce costs, allowing financial resources to be allocated to other important aspects of patient care.  (And of course, the credit for those additional resources can be given to the smart supply manager that instituted the vendor compliance policy.) 

Liability cost containment 

An increasing number of supply chain managers are focused on improving quality of care while containing costs. On one level, the focus on cost containment comes from the shifting reimbursement environment. With every passing year, hospitals’ reimbursement becomes more dependent on patient outcomes, which has increased awareness of treatment cost as a way to mitigate risk. That can directly translate into the purchase price of a product, which of course falls under the supply chain manager’s responsibility. 

However, there is another level of cost containment that directly relates to the supply chain and has nothing to do with purchase price: it involves the vendor risks and liability associated with an unstructured and unsecured vendor process. For many healthcare organizations, the financial consequences for non-compliance are just too high (up to $10,000 per item purchased), and the possible repercussions to a hospital/health system’s reputation could impact the public’s perception for years to come. A tarnished reputation not only affects a hospital, it can affect the reputation of staff as well when they are later identified as having worked for an employer with lax standards.      

How are healthcare facilities adapting to ensure compliance? 

A stringent vendor compliance policy and robust vendor credentialing program is the best defense when it comes to protecting your organization from the financial and legal consequences that can arise from vendor visits.    

Because credentialing can be an arduous process for both the healthcare system and the vendor, an increasing number of hospitals are turning to third parties like symplr.  

What to look for in a vendor credentialing partner 

  • The ability to accommodate the unique needs of your organization: each hospital and healthcare system is distinct, and the partner you choose should be able to adapt to your unique situation, such as deeper background checks concerning child-endangerment for a children’s hospital or a wider array of immunizations for a critical illness facility. 
  • Ease of use: the credentialing process should be straight-forward for vendors, suppliers, and hospital staff alike. 
  • Technology: automated and secure check-in at kiosks make it possible for every access point of a facility to be covered while increasing convenience for vendors. Also, look for real-time dashboards that track who is in your facility and can produce documentation for governing entities like the Joint Commission, if necessary.  

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