VA mulls national O2 contract

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Wednesday, December 31, 2003

WASHINGTON - The VA is studying the feasibility of consolidating its $100 million book of business for home oxygen into a national contract held by a primary supplier.

The trend is part of a growing nationalization of contracts at the VA. Already, the department has shunted contracts for such products as scooters and blood pressure monitors from regional and local providers in 12 “VISN” regions to vendors with an ability to service the contracts nationwide.

The VA purchases DME products out of an $850 million budget that procures everything from canes to pacemakers. The national contracts that have already been written are expected to save the VA $36 million over the next fiscal year, according to VA-commissioned calculations. The savings come from aggregated buying power.

“We found that with 176 hospitals and 300-some outpatient clinics we were buying a wide range of [products], and we weren’t able to use out market share,” said Fred Downs, who oversees purchasing in the VA’s prosthetics department.

Although VA hospitals and clinics can make individual purchasing decisions, those situations must be exceptional.

“I do compliance reports every quarter,” said Downs. “I require 95% compliance on most of the national contracts.” Downs has charged 32 work groups and 72 subgroups with the development of plans that vote yea or nay on the feasibility of moving purchasing onto a national contract. The O2 work group has spent two years exploring a contract for oxygen.

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