Patrick Lastowski says some of his clinicians once complained to him that the blankets they used to get now have a different color scheme. Also, the Red-DotTM electrodes from 3M no longer carry the red dot, they’ve noticed.
That’s because the University of California Davis Health System, for which Lastowski is a buyer and supervisor, has switched to buying much of its supplies from Novaplus, a Novation private-label brand that offers a significant price cut in return for a provider’s willingness to forego the brand-name, especially with commodity-type items from bandages to blankets.
Think of Macy’s brand blue jeans instead of Levis, except that, unlike many private label items in department stores, most of Novaplus’ items are made by the same manufacturers—they just don’t carry the brand name and thus don’t cost as much. “A 3M Red-Dot electrode is the same thing whether you buy it with the 3M on the box or Novaplus,” Lastowski says. For that electrode, used in heart monitoring during surgery or other procedures, “we were buying the branded product and then moved to the Novaplus product. Just on that one product line, we wound up saving $8,300 for the year.”
Lastowski and his team have repeated that process on dozens of other small-dollar items. What’s in it for the manufacturers? Increased sales through entry to large health systems, like the 500-staffed-bed UC Davis, as well as money saved on marketing.
Lastowski says he’s met some resistance from staff members, but once they have an opportunity to use the products, despite the fact there might be small changes in branding or color, they realize the items perform just as well. That’s because the product doesn’t reach the patient without a thorough quality analysis from Lastowski and his staff.
Every time a new private-label product is introduced, he says, there are challenges from the clinical staff. But Novaplus has staff members visit the clinical areas and demonstrate the quality of the item versus a name-brand item. “They would be cheaper and just as good quality as the name-brand stuff,” he says.
“People get very close to the products they use, so they would automatically think, ‘Oh no, what did purchasing do to us now? It must be inferior.’ But after the presentation, when they see the Novaplus stuff really is your branded product with different packaging or colors,” the staff members are satisfied, says Lastowski—and savings can be funneled to other areas. —Philip Betbeze