Supply-chain and support-services staff told the Health Commission that San Francisco Department of Public Health's five-year participation in the Vizient group purchasing organization (GPO) has yielded net financial benefits and helped the department maintain supply continuity.

Nadir Hamoud, executive administrator for support services, said DPH receives rebates from Vizient and uses those monies across hospitals and services. He described three evaluation criteria: whether the GPO streamlined acquisitions, the level of rebates returned to DPH and cost savings relative to market alternatives.

Why it matters: Hospitals and health systems depend on reliable medical-supply access. Hamoud told the commission that during recent national shortages — including intravenous fluid supply constraints — DPH coordinated clinical use and used Vizient relationships to secure additional shipments so that no surgeries had to be canceled at DPH hospitals.

Key findings from the presentation

- Rebates and fees: Hamoud presented rebate data showing DPH earned tiered rebates; for example, in 2023 the department received approximately $2.0 million in rebates plus about $281,000 in impact-standardization payments. Annual membership fees paid to Vizient in 2023 totaled roughly $486,536; rebates were larger than fees.

- Streamlined procurement: Hamoud said the GPO lets DPH use pre-negotiated contracts without separate solicitations, which shortens procurement lead times and provides guaranteed supplies from contracted vendors.

- Cost savings: Hamoud said Vizient negotiations provide baseline discounts and that DPH continues local negotiations with suppliers to secure additional savings (he cited a $900,000 additional saving achieved through negotiation with Medline in 2024).

Operational notes and oversight

Hamoud said DPH will monitor rebate tiers and supplier agreements to try to maximize rebates and that GPO membership has an administrative fee structure tied to the specific service lines used by the department.

Commissioner questions and public comment

Commissioners asked how the department handles national shortages and whether GPO membership improves leverage with suppliers. Hamoud said DPH coordinated daily with clinical teams during the IV fluid shortage and had standing contracts and supplier guarantees that avoided surgery cancellations. A public commenter questioned a related contract extension with Chinese Hospital for skilled-nursing beds; commissioners and staff discussed that comment as part of consent agenda items later in the meeting.

Ending

DPH concluded that the Vizient GPO participation provides an overall positive benefit via rebates, procurement efficiencies and improved supplier access; staff recommended continuing membership and monitoring performance.