Kaiser Permanente uses advanced sourcing strategies to eliminate DEHP, cut costs

By Doug Smock
Posted November 27, 2013
Plastics Today

Kaiser Permanente is using advanced strategic sourcing practices to convert to DEHP-free and PVC-free products in line with a PVC-free policy made official in January, 2012. The strategy is also yielding signfiicant cost savings, even though the greener alternates are often more expensive.

In some cases the organization is converting small, disparate contracts to one national contract with a single vendor to achieve savings even though the specific alternative items may be more expensive. In some cases, that involves getting groups of physicians to agree to common national standards for basic products like catheters used in kidney dialysis.

Kaiser Permanente has also worked with large group purchasing organizations to conduct reverse electronic auctions in which prospective vendors compete online. It's a technique that's been in vogue for about 15 years by Fortune 500 sourcing departments, but has had little traction in the healthcare field until recently.

"Given the 4.9 million IV tubing sets and 9.2 million solution bags KP purchases each year, this conversion affects nearly 100 tons of medical products and is expected to save almost $5 million annually," the nonprofit said in a recent post at the Healthier Hospitals Initiative Web site.

In one case history reported by Kaiser Permanente, the health system converted 36% of respiratory therapy products in its neonatal and pediatric intensive care units (NICU/PICU) products to DEHP-free products.  DEHP refers to diethylhexyl phthalate (DEHP), which is used to make polyvinyl chloride (PVC) flexible.

"Kaiser Permanente is taking actions to reduce patient and employee exposure to harmful chemicals that are known to pose health risks," the organization said. "Chief among these is the reduction of DEHP exposure to our most vulnerable patients, those in neonatal and pediatric intensive care units."

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