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COUNTY OF SAN MATEO
Inter-Departmental Correspondence
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San Mateo Medical Center
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DATE:
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July 28, 2003
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BOARD MEETING DATE:
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August 12, 2003
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TO:
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Honorable Board of Supervisors
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FROM:
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Nancy J. Steiger, Chief Executive Officer
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SUBJECT:
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Contract with Cardinal Health
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Recommendation
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Approve a resolution authorizing the President of the Board to execute an agreement with Cardinal Health for Pharmacy Management Services for the San Mateo Medical Center.
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Background
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In April 2003 the Medical Center was cited for deficiencies by Centers for Medicare and Medicaid (CMS) Services, which if not corrected, could result in Medicare funding deficits as well as increased federal and state regulatory oversight. The focus of the CMS survey was in the area of pharmacy services indicating problems in clinical planning (i.e. drug utilization and review), pharmacy management and administration (i.e. drug discrepancy reporting), and delivery of services (i.e. clinical monitoring in conjunction with medical staff). The deficiencies were consistent to those found in the prior year’s Department of Health Service JCAHO survey.
A thorough plan of correction to address each of the deficiencies has been developed. However, the current Pharmacy Director of over 30 years is retiring effective September 2003. There is a strong probability that the Medical Center would not be able to recruit for a Director of Pharmacy at this critical time, due to the nation-wide pharmacist shortage. In order to guarantee consistent quality management and overall leadership within the pharmacy, a Pharmacy Management Contract with Cardinal Health is recommended.
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Discussion
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In review of the 2003 CMS report Cardinal Health agrees to manage drug costs, expand the 340B program, enhance pharmacy leadership through training and development, optimize pharmacy systems and processes and enhance drug utilization strategies. Most immediate, the company will ensure JCAHO and CMS survey preparation, establish competency assessments, consistently survey customer satisfaction and create policies and procedures, within the context of community standards.
As the needs of the department, Medical Center and County continue to grow and change the mission of opening doors to excellence in health care will remain the same. Contracting with Cardinal Health for Pharmacy Management will provide the Hospital with the pharmacy leadership, accountability, and quality outcomes.
A letter of interest was sent to three of the top providers of service in the industry. Of the three companies, Cardinal was the most reputable, had the best references and was the most cost effective.
County Counsel and Risk Management have reviewed and approved this agreement as to format and content.
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Vision Alignment
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This Contract is aligned with Partnership, Commitment Nine contributing to the County’s Goal Number 20: government decisions are based on careful consideration of future impact, rather than temporary relief or immediate gain. This contract will aid San Mateo Medical Center in addressing the immediate and long term issues of the national pharmacist shortage, the increased federal and state emphasis on medication management and slowing the rising cost of pharmaceutical drugs. Additionally, this contract supports People Commitment Three enhancing Goal Number Five: residents have access to healthcare and preventive care. As the Medical Center volume continues to grow, quality pharmacy care is a critical component of the effective treatment of San Mateo Residents. Cost effective management of pharmacy services allows for increased access and less interventional healthcare.
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Fiscal Impact
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The term of the agreement is from August 11, 2003 to August 31, 2006. The amount for FY 03-04 is $221,021 and will be included as a September Budget Revision. Annual amounts for years two and three will be adjusted based on the Medical Consumer Price Index (CPI) capped at 5.0%, but will not exceed $700,000 for the entire term of the agreement.
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Exhibit A
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1.
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General Description of RFP
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Pharmacy Management Services
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2.
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List key evaluation criteria
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Quality of services provided
Cost of services
References
Alignment of Management Company Goals with SMMC and County Goals
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3.
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Where advertised
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A letter requesting a proposal was sent to three well known pharmacy management companies, initially in response to the 2003 CMS Survey.
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4.
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In addition to any advertisement, list others to whom RFP was sent
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None
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5.
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Total number sent to prospective proposers
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Three
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6.
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Number of proposals received
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Three
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7.
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Who evaluated the proposals
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The former Chief Operating Officer initiated the search and relayed the information to the incoming Deputy Director Ancillary and Support Services upon his departure.
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8.
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In alphabetical order, names of proposers (or finalists, if applicable) and location
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BD Healthcare Consulting and Services, Boston MA
Cardinal Health, Houston TX
Comprehensive Pharmacy Services, Diamond Bar CA
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