Unleash the Supply Chain Champions in Your Physicians

Joe Patton, M.D., used to be naïve about the benefits of partnering with his supply chain counterparts on product decisions. A trauma and acute care surgeon at Henry Ford Health System in Detroit, Dr. Patton’s attitude toward supply chain changed when he assumed an administrative role within surgical services about seven years ago and peered into a space traditionally run by nurses.

As Henry Ford’s Medical Director of Surgical Services, he watched how supply chain decisions from sutures to stents affected the organization’s finances and quality of care. He realized physicians saw only the variables in the equation that related to personal use and patient outcomes – not necessarily the cost or contracts involved. And, likewise, supply chain knew only half the story.

Dr. Patton went from supply chain naysayer to champion and brought his fellow physicians along with him.

As the supply chain becomes a bigger player in the overall healthcare system’s decision-making infrastructure, supply chain leaders are linking up with clinical peers to jointly lower costs and improve patient care. Doing so requires an understanding of what motivates surgeons, learning how to speak their language and keeping the focus on the ultimate element that motivates the entire system of care: the patient.

Total supply chain spend represents 30 percent of all hospital spending, according to industry associations, and physician preference items (PPIs) eat 40 to 60 percent of that budget. Yet, research shows that surgeons correctly estimate the cost of a commonly used implant only about 20 percent of the time, meaning a strong supply chain-physician partnership can open up large savings opportunities.

“Supply chain is a great place to start engaging your physicians, and it offers an easy win to reduce variation in products,” Dr. Patton says. “Supply chain benefits from size, contracting power and the ability to work within the GPO to review non-contracted items. To standardize around an item like a suture is a big win for finance and makes the entire team more efficient.”

Dr. Patton has four tips for how to win physicians over.

Since taking his administrative role, Dr. Patton has helped convert numerous physicians into supply chain enthusiasts like himself. Physicians at Henry Ford are active in the value analysis committee where they evaluate products and services before they are on contract and discuss their potential effects on cost and patient outcomes. This physician input has helped supply chain specialists make smarter procurement choices and standardize around the most effective items.

Here are four tips from Dr. Patton on how administrators and supply chain leaders can help ensure physicians are at the table for these decisions.

1. Treat the physician like a stakeholder, not a customer. Surgeons want to be involved in supply chain matters, but administrators, nurses and clinicians are cognizant of the demands on their time and may try to insulate them, which leaves them out of the loop on important decisions such as the tools they use in the operating room.

“There’s a natural tendency for people to work in silos and not engage the right stakeholders. When I looked at the value analysis team, it was all supply chain and nurses making PPI decisions – they were trying to be protective of surgeons’ time,” Dr. Patton explained. In fact, Henry Ford’s surgeons wanted to be involved, which is how Dr. Patton started going to the meetings and asking questions, serving as a liaison to his peers.

2. Make it easy to participate. “Understand the challenges that surgeons have with time and commitment. A supply chain meeting at noon will likely not work, so maybe you meet at 6:30 in the morning,” Dr. Patton suggests. “Physicians want to engage, but the system must be realistic and flexible.”

Another consideration is to introduce gainsharing that gives physicians a financial incentive related to the supply chain standardization goals. A study published in JAMA Surgery in 2016 found that when surgeons were equipped with the proper information and incentives, they lowered their median supply costs by 6.5 percent in 12 months.

3. Ground the need to change in the data. “Surgeons are physicians and physicians are scientists. Most, if not all, of the decisions we make are data-driven,” Dr. Patton says. “Take PPI, for instance – physician items should be chosen for more reason than just a preference. But until you can get reliable data, it’s hard to drive change.”

Providers can engage physicians with validated data that is accurate, transparent and actionable because "it's hard to fight against hard numbers," Dr. Patton says. Once they feel the data accurately reflects their spend and outcomes, the natural competitive spirits come out.

As a member of a highly committed purchasing program, Henry Ford accesses a regular compliance report to show the percentage of ordering on contract and connects with others in the purchasing program to learn best practices. Doing so helps Henry Ford access the best price.

4. Solve for the value equation and patient care. Discussions should center on the viability of the healthcare system and how supply chain decisions contribute to quality outcomes and margin improvement.

“You might pay more for an item, but if it shortens length of stay and readmissions, it’s creating better value for the health system and a better experience for the patient,” Dr. Patton says, although he acknowledges it’s not always easy to get data that shows the value of a product across the continuum. “At the end of the day, it’s all about patient care, and the reality in today’s market is that we have to do it in a cost-effective manner.”

Surgeons know that their current value equation is immature because reimbursement in the fee-for-service world pays them for what they do, versus how they do it, Dr. Patton acknowledges.

“But that day is coming,” he says. “Surgeons need to lead the charge in the movement to value-based payment.”

Value-based supplier contracts are one way that the supply chain, physicians and administrators are beginning to solve for this problem. In the transition to risk and value-based care, physicians should be empowered to lead the way, and part of the success will rely on how well supply chain and physicians partner together.

Learn how we can help unleash the supply chain champion within your physicians.