The Cook County Health and Hospital System’s board expects a proposed change to purchasing policies will save nearly $20 million a year.
But some aspects of the plan have minority and female business owners fuming. They say the proposal would take business away from locally-owned vendors and cost jobs.
The hospital system's plan involves a group purchasing organization, which would pre-certify reliable vendors. Hospital officials could then choose among those vendors when ordering everything from surgical gloves to janitorial supplies. Vendors would have to pay a membership fee and meet membership standards.
Health system spokesman Marcel Bright says the change would make purchasing more efficient, since businesses that belong to a group are vetted to ensure they can deliver the amount of product customers need.
“Some organizations say, ‘Yeah, we can do it,’ but then they’re scrambling to make sure they have the number of surgical gloves you need, or whatever it may be,” Bright says. With a group, “You’re automatically getting the price you’re looking for. You’re a step ahead.”
System officials say the group plan, along with a recent move to centralize purchasing across the county's hospitals, could save up to $20 million.
By policy, the system must award at least 35 percent of aggregate contracts to minority- and woman-owned businesses. Some worry those vendors won't want to pay to join a group, or may not meet membership requirements.
“The selection process adds an element of subjectivity that doesn’t make me feel comfortable,” says County Commissioner Roberto Maldonado, who stood by business owners at a rally opposing the policy last month.
Donald High, president of Palatine-based Advanced Management Services Midwest, which has done business with Cook County for about 10 years, says he doesn't know how expensive it will be for vendors to join a group. But he worries membership fees could exclude some local businesses.
“Local vendors could possibly be shut out of this and that means that the revenue could conceivably be put out of Cook County,” High says.
That loss of local revenue, High worries, would lead to higher unemployment, loss of insurance and more patients in the already overburdened waiting rooms of Cook County hospitals.
Bright says if the system decides to work with a GPO, it would spend approximately $90 million annually with providers within the GPO.
Maldonado and others have complained that GPO contracts would amount to half a billion dollars. Bright says that figure is not accurate. The hospital system’s annual budget is $847 million.
Business owners also worry that the hospital system board – which became independent from county board President Todd Stroger last year – is accountable to nobody.
“I’m sure that if the voting populace of Cook County knew what was going on, they would have a very negative view of this,” High says.
Hospital officials dispute that claim. Bright says the board’s CEO, David Small, reports to the county commission on a regular basis.
It is unclear when the board will make a decision regarding a GPO.
High says the GPO concept would be burdensome to local businesses in a down economy.
“We are trying to support our family, educate our children and eke out a living,” he says.
Business owner Elliot El-Amin promised to keep up the fight.
“We’re not going to go away. This is not going to go away,” he said at the April 9 board meeting at Stroger Hospital. “You’re talking about eliminating many, many small businesses, even majority businesses because they won’t be able to participate.”
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.