DPH supply-chain presentation: GPO membership yielded rebates and helped manage shortages, officials say
Loading...
Summary
San Francisco Health Network staff presented a five-year review of membership in the Vizient group purchasing organization (GPO). DPH reported roughly $2.3 million in cash-back rebates in 2023 and described how GPO contracts and inventory coordination helped the city avoid surgery cancellations during a recent IV fluid shortage.
The San Francisco Health Network presented a five-year evaluation of its group purchasing organization (GPO) membership and told commissioners that membership in Vizient (the GPO used by DPH) has produced rebates, streamlined procurement and helped manage supply shortages.
Nader Hamoud, Administrative Executive for Support Services, said DPH chose Vizient after an informal 2019 market assessment and that the GPO offers broad supplier access, pharmacy programs, inventory commitments and rebates tied to spending tiers. "Participation in the Vizient GPO has an overall positive benefit and we would like to continue with that," Hamoud said.
Key points presented:
- Rebates and fees: DPH reported receiving about $2.0 million to $2.3 million in rebate payments in 2023 and an additional $281,000 from an impact-standardization incentive; annual membership fees are deducted from rebates and DPH reported no net out-of-pocket membership payments for the years shown.
- Role in shortages: Hamoud said GPO-negotiated guaranteed supplies and daily coordination with clinical leadership helped the department manage the recent IV fluid shortage without canceling surgeries. The department said it worked with suppliers to secure additional allocations tied to DPH’s purchase commitments.
- Ongoing work: DPH staff said they will continue to monitor rebate tier status, pursue standardization to increase savings, and use the GPO for capital equipment, pharmacy and other supply lines.
Commissioners asked about anticipating and mitigating national shortages, controlled-syringe backorders, and how GPO agreements interact with hospital inventory decisions. Hamoud described daily monitoring with clinical teams and extra negotiation with vendors (for example, expanded Medline commitments that yielded additional savings).
Ending: Commissioners praised the supply-chain coordination; no formal vote was required on the five‑year report itself.
