By Scott R. McCreadie, PharmD, MBA, and Richard R. Rinke, BS, MBA, RPh

THE SELECTION OF A NEW PHARMACY SYSTEM CAN BE A RELATIVELY LARGE
project in and of itself. Inpatient and outpatient pharmacy management systems, automated dispensing technologies, and safety technologies are complex, expensive, and somewhat difficult to evaluate, in terms of how they will work in your organization. Some of these systems are not very mature and may have growing pains. Other systems are past their prime and not very flexible in meeting tomorrow’s business needs. It is unlikely that you will find a perfect system. As such, the process for selecting a new pharmacy system boils down to finding a system that balances various factors and best meets your business needs moving forward. Depending on the system you’re looking for, there are potentially many vendors to consider. During your initial evaluation process, attempt to limit the number of vendors under consideration, prior to formally evaluating any one vendor.

Understand Your Needs
The crucial first step in the evaluation is to gain a full understanding of your needs. This is accomplished by reviewing how you use your current system, how your current requirements are not being met, and what you will likely require from a system in the future. It is also key to understand how the system must integrate and interface with other systems and technology at your facility. More and more, systems need to communicate with each other as health care moves into an electronic environment, leaving paper-based systems behind.

It is important to involve the various stakeholders who will be purchasing, installing, using, and supporting this system during your evaluation process. Doing so will help you avoid surprises later, particularly if the system cannot perform a necessary function or if a technological barrier prevents a necessary interface.

Initial Research
Initial research is done primarily by viewing vendor advertising, talking with others who have used the vendor’s system, and looking at third-party reviews of the system. A consultant can also be utilized to help compile the initial list of vendors to consider.

During your initial research, you should talk with your peers who work in similar organizations to yours and who have purchased and are using the systems you are considering. Their experiences are a great way to measure if a vendor and its product live up to their marketing. This is also a great way to learn about the vendor’s support of the product after the sale, a vital area to focus on during your evaluation. Some products are supported to a high degree by the vendor; others require an extensive local infrastructure to handle the day-to-day support.

During the initial research phase, you should ask yourself if the technology fits into your organization’s standards. Does your organization’s staff have the skills and experience to appropriately install, maintain, and optimize the use of the technology in your business? If the application requires interfaces to other systems, does it support industry standards such as HL7 for connections? It is essential to include someone with IT knowledge and background to help assess the technology. While a system with a different technology base may not automatically exclude a vendor’s offering, it does call for increased research into the costs that it will take to install and support that heterogeneous system within your organization.

Finally, it is important to look at the financial strength of the vendor. Is the vendor financially stable with a growing customer base, or is the vendor at risk for not sustaining their business? Generally speaking, you should look for established and strong vendors for major system purchases.

Filter Your Vendor List
Once the initial research is complete, filter out any vendors that are not a good fit for your organization. Vendors with products that do not meet your needs and do not appear to be heading in the same direction as your organization’s needs should be excluded. Vendors with a technology base different than your corporate standards may be excluded if you have identified other vendors with similar products that work within your standards. If your peers have found a vendor difficult to work with or if a product’s performance does not match its marketing claims, those vendors are good candidates for exclusion. Once the vendor list is pared down, a formal request for proposal can be done.

Request for Proposal
For low-cost systems, a purchase decision can often be made after the initial research and filtering process. Most pharmacy systems are much more expensive and require a detailed examination. Many organizations require a request for proposal (RFP) as part of a bidding/purchase process.

You may also elect to pursue a request for information (RFI) process prior to the RFP process. An RFI is intended strictly to obtain further information about a vendor and its system, and is not part of an actual bidding or purchasing process. In this process, you will need to prepare a series of questions about a system’s capabilities and the vendor. The RFI process does add time to the overall system-selection process and is purely optional.

To proceed with the purchasing process, you will need to prepare an RFP document. This is your opportunity to present the vendor with your system requirements, and ask them if and how they will be met. Key sections in the RFP should address clinical functionality, operational capabilities, billing functionality, the technical platform, interface requirements, reporting abilities, vendor information, and references.

The RFP serves many purposes. First, it is used to support the formal purchasing/bidding process. In order to be eligible for contract consideration, vendors must submit a completed RFP in the time requested. Vendors may eliminate themselves from consideration by choosing not to respond. Once you receive the completed RFPs, you will need to review the vendor responses. Keep in mind that vendors have become quite skilled at responding positively to RFP questions, as they recognize that negative responses may eliminate them from the selection process. Therefore, it is quite likely you will find it difficult to apply a rigorous vendor differentiation process to the RFP reviews.

That said, it is possible to use RFP responses for coarse vendor screening. For instance, an RFP may reveal information about the nature of the vendor’s installed client base; a vendor whose primary experience is with smaller clients may find it difficult to meet the needs of a larger institution. RFPs may also highlight important technical information, such as the system architecture, hardware requirements, and vendor support capabilities. RFP responses may also reveal a vendor’s eagerness and flexibility in meeting your needs. Such screening may allow you to develop a short list of finalists to consider for closer review via system demonstrations, conference calls, and contacting references.

RFP responses will also reveal competitive vendor pricing. Some vendors may be ruled out simply by their very high pricing. Finally, an RFP response is useful to include as part of a final contract, to legally commit the vendor to comply with its RFP response.

Contract/Purchase
Contract negotiation can become difficult, as both parties attempt to further their interests. Some institutions take an uncompromising approach with vendor contracts, including aggressive contract timelines, low-end pricing, and severe contract penalties. Although this may leave the customer feeling quite satisfied with the negotiated terms, the vendor may be highly dissatisfied, ultimately resulting in the vendor’s failure to meet contract terms or the delivery of an inferior product, in order to meet contract dates. At the very least, this approach could create an adversarial relationship with the vendor.

A better approach to contract negotiation would be to adopt a win-win philosophy. In many cases, you will be working with these vendors for many years, so it is best to foster a mutually beneficial relationship to insure the proper support and operation of your system well in to the future. Under this philosophy, it is important to include in the contract a mutually agreed upon project timeline that identifies crucial milestones. To insure vendor adherence to the timeline, payments should be phased and paid at the completion of key milestones. For example, varying percentage payments may be made at contract signing, system delivery and installation, system go-live, and finally, upon system acceptance. This incentive-based contracting is often more successful in meeting both vendor and customer goals.

Summary
Choosing a new pharmacy system requires you to assess many factors. Understanding your business needs for today and tomorrow and correlating those needs to a vendor’s product are the key challenges of selection. Using a step-by-step approach, however, the selection process can be better managed and products can be fairly evaluated for purchase.

Scott R. McCreadie, PharmD, MBA, is a strategic project coordinator in the department of pharmacy services at the University of Michigan Hospitals in Ann Arbor, Michigan. In addition, he is president of the McCreadie Group, Inc., a consulting and software-development company that specializes in the health care industry.
Richard R. Rinke, BS, MBA, RPh, is the medical center IT manager for the department of pharmacy services at the University of Michigan Hospitals. He received a BS in pharmacy from Wayne State University and an MBA from the University of Michigan School of Business.