What Am I Bid for this Trash?

BOSTON – What do solid waste disposal and orthopedic surgical implants have in common? To Beth Israel Deaconess Medical Center’s contracting department, they are just two areas where reverse auctions – where vendors bid for the right to provide services – can save money.

The web-based effort is designed to “speed the process and ensure best results,” says Joe Sheil, BIDMC’s director of contracting, who has also applied the technique to the purchasing of copiers and specialty beds.

The first foray into web-based bidding came with the creation of BIDMC’s Spine Center in 2006. Bringing together clinicians from neurosurgery and orthopedics united surgeons who perform a myriad of spinal procedures.

That required organizing seven different vendors who provide material for six varieties of surgery, resulting in a matrix of 76 different bidding options, says Pam Kennedy, who organized the auction.

Working with medpricer.com, an online service that hosts the auction, Kennedy says that “my adrenalin was pumping” as vendors changed their bids based on conversations with BIDMC staff that alerted them only to whether they were high or low but never revealed actual prices.

At the end of the daylong process, three vendors each won three-year contracts that saved the medical center an estimated $300,000 annually, says Sheil. The process also saves paper by allowing one set of online specifications as opposed to creating massive binders of paper for any interested vendor.

Kennedy is applying the lesson to purchase of cardiac stents, pacemakers and defibrillators at the CardioVascular Institute at Beth Israel Deaconess Medical Center.

At the other end of supply chain, Patrick Thomas negotiated an online deal that led to the selection of Allied Waste as BIDMC’s new solid waste removal company.

“The primary driver is best business terms,” says Sheil, who estimates potential savings of $1 million over five years by putting copiers out to auction. “This is the best way to assess if we’ve gotten there.”

Beth Israel Deaconess Medical Center is a patient care, teaching and research affiliate of Harvard Medical School, and consistently ranks among the top four in National Institutes of Health funding among independent hospitals nationwide. BIDMC is clinically affiliated with the Joslin Diabetes Center and is a research partner of Dana-Farber/Harvard Cancer Center. BIDMC is the official hospital of the Boston Red Sox. For more information, visit www.bidmc.org.