Inter-Departmental Correspondence

Health System



January 5, 2011


February 8, 2011







Honorable Board of Supervisors


Jean S. Fraser, Chief, Health System
Susan Ehrlich, MD, MPP, Chief Executive Officer
San Mateo Medical Center


Agreement with Caduceus Systems LLC



Adopt a Resolution authorizing the:


President of the Board to execute an Agreement with Caduceus Systems LLC for the provision of a Materials Management Information System for the term of December 1, 2010 through November 30, 2015, for a maximum obligation of $405,000; and



Chief of the Health System or designee to execute contract amendments which modify the County’s maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions.



San Mateo Medical Center (SMMC) uses a Materials Management Information System (MMIS) to track the purchase of materials used to support patient care. This includes everything from durable medical equipment (computerized IV stands, beds, testing equipment, etc.) to disposable items (bandages, surgery tools, etc.). The current MMIS, Shellsoft, has become unreliable as a long term solution to the electronic purchasing needs at SMMC. Presently only the purchasing and receiving functions demonstrate consistently accurate functionality.



Caduceus Systems LLC (Caduceus) provides the most comprehensive MMIS and was the only vendor offering the components needed plus ongoing research and development at SMMC. Caduceus is offering a preferred rate under SMMC’s Group Purchasing Organization (GPO), enabling Cadeceus to offer SMMC advantageous pricing and obviating the need to complete the RFP process because the RFP process has already been waived for contracts under the GPO.


A great deal of work is involved in setting up an MMIS from a database coding point of view as well as the connectivity and interface set up, and it is fiscally more responsible to run this contract for a five year period under the discounted GPO rates. Accordingly, the County Manager’s Office has approved a waiver of the three year contract term in favor of a five year agreement, which can be terminated at any time.


County Counsel has reviewed and approved the Agreement and Resolution as to form. The Contractor’s insurance has been approved by Risk Management. The Contractor has assured compliance with the County’s Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits.


The Agreement contributes to the Shared Vision 2025 outcome of a Healthy Community by providing a system to procure, pay for, and issue supplies required for patient treatment. It is anticipated that the MMIS will allow SMMC to effectively balance its inventory levels and maximize on hand quantity to meet patient’s needs. A balanced inventory reduces cost by, avoiding stock-outs, back-orders as well as overstocks and will enable SMMC to meet its OBM measure of reducing cost per adjusted patient day to $872.


Performance Measure:


FY 2009-10

FY 2010-11

SMMC cost per adjusted patient day





The term of this Agreement is December 1, 2010 through November 30, 2015. The maximum obligation is $405,000. Of that amount, $308,073 is included in the SMMC FY 2010-11 Adopted Budget. The annual maintenance fee of $24,000 will be included in the SMMC FY 2011-12 Recommended Budget and similar arrangements will be made for future budget years. Expenses at SMMC are covered by fees for service or third party payors whenever possible. The portion of expenses for services provided to the medically indigent or to those covered by programs that do not meet the full cost of care is covered by the County’s General Fund contributions to SMMC.