Physicians charting new course into managing supply decisions

Physicians and surgeons can leave the impression that they’re internecine, self-centered and unreasonable when it comes to making decisions about products, services and other supply chain decisions, all based on what they say they feel is best for their patients.

But that attitude and demeanor of privilege, status and superiority falls far short of the pervasive stereotype held by administration, finance and operations.

As Healthcare Purchasing News recognized the emerging and growing participation by genuinely engaged physicians and surgeons in the supply chain process it decided to identify and salute those key clinicians truly making a difference by presenting them with its annual P.U.R.E. award and profiling their points of view. P.U.R.E. signifies Physicians Understanding, Respecting and Engaging Supply Chain professionals. HPN bestows its P.U.R.E. award on those physicians and surgeons who have made solid contributions to supply chain operations — activities, practices and thinking. HPN designed it to further solidify and strengthen the clinical bonds between physicians and supply chain professionals.

Last year HPN selected three physicians to receive the inaugural P.U.R.E. award. This year three more join their ranks, selected from noteworthy nominations submitted to HPN.

HPN’s 2018 Supply Chain-Focused physicians are: William G. Cloud, MD, MACM, FACS, general surgeon at Providence Hospitals, Columbia, SC; Paul J. Orland, MD, FACS, general and vascular surgeon at Surgical Specialists of Charlotte, Charlotte, NC; and David E. Skarda, MD, pediatric general surgeon, medical director, Surgical Services Clinical Program, Intermountain Healthcare, Murray, UT.

Through his extensive medical education and experience Cloud recognizes that physician competencies must include and understanding of systems-based practices and thinking, value-based rather than volume-based reimbursements that point to controlling costs through evidence-based supply chain decison-making. He serves on the LifePoint National Physician Advisory Board and the HealthTrust Physician Advisors Program where he works with supply chain professionals and clinicians to evaluate and standardize products and drugs used in various hospital departments.

Orland believes in the power of personal communications and one-on-one professional relationships with colleagues and peers and even supplier executives to influence and make supply chain decisions. He actively serves on the Surgical Services Sourcing Committee with Premier and remains instrumental within Premier’s Breakthrough Technology program.

Skarda serves as translator and communicator of supply chain issues to his clinical colleagues and peers, bridging the gap that may exist between physician concerns and engagement and provider economics, helping to show why something must be accomplished together, correlating costs and outcomes, for the benefit of patient care.

HPN’s traditional wide-ranging interview explored how all three immersed themselves in supply chain events and issues, and served as ambassadors bridging any gulf between colleagues and Supply Chain operations.

ORLAND IN PERSON

Unlikely source of inspiration:

My wife… when I least expect it

Most creative thing he’s ever done:

Taking up kiteboarding at age 50

What makes him laugh:

My daughter’s Instagrams

Best and worst advice someone ever gave him:

Best advice came from a radiologist interviewing me when I came to Charlotte: Pull up a chair when you talk to a patient.

Worst advice: There’s no role for music in the operating room.

Must-have accessory:

There’s no accessory that I can’t live without except my family. (I do like my Bluetooth earpiece.)

Favorite thing to do on a day off:

Any physical activity — especially kiteboarding

Surprising fact about him:

In my youth, I delivered pizzas on a skateboard in downtown Manhattan — often to the World Trade Center.

How he describes himself in three words:

Husband, father, surgeon

Favorite object he keeps in his office:

A metal sculpture of a kiteboarder — because everyone should have something outside of their work and family.

What he would tell himself if he traveled back in time to when he just started in healthcare:

Always do the right thing for the patient. Try your best and you’ll always get a good night’s sleep!

PAUL J. ORLAND, MD, FACS

HPN: Why do you feel it is so difficult for doctors to become more directly involved in supply chain issues? What are some of the challenges that physicians may have with Supply Chain that makes them so resistant to Supply Chain recommendations?

ORLAND: In general, I think physicians are just busy in the practice of medicine, and it’s often difficult to get significantly involved in supply chain. I also think that there is a general lack of understanding how supply chain efficiencies can improve delivery of care, streamline products and help choose products that are most in line with the current practice of medicine.

How, when and why did you decide to get involved with supply chain issues?

I was asked (by a friend and colleague) to do some consulting work and thought it would be interesting. I have a BA in economics, and I’ve always had a particular interest in medical economics. This has been an interesting area for me to spend some time and get some perspective with respect to product development, product choice as well as general supply chain issues.

What’s a myth about your profession (and your colleagues) that you’d like to bust for supply chain readers?

We’re not all that difficult to deal with. In general, we want what is best for the patient. Sometimes the message just isn’t conveyed in the right way or professionally. Like most issues, it’s all about the communication and that’s a two-way street. With a reasonable presentation, I think physicians can learn to wrap their heads around supply chain issues and product decision-making. It is often not delivered effectively at the hospital level.

What motivates you to be willing to cut costs, even if it means switching to a brand of product with which you may not be comfortable or you may not favor for whatever reason?

I think that’s one of the more difficult issues in supply chain discussions. We all understand there are a lot of products out on the market that are compatible or interchangeable with currently used products. Often, physicians are just not introduced to a different product in the correct fashion. Surgeons, in particular, are used to particular type of product or equipment for the procedures we do, and it becomes very difficult to change because of the perceived risk in change. I wouldn’t be willing to use a product that I think was inferior to an existing product.

Why do you believe physicians are so reluctant to change product brands?

Because we like and are comfortable with what we’re used to using. With that said, if you’re pitted in the ideology that you don’t want to change equipment and continue to do things the same way you can really stagnate in your career. This, of course, is an argument for continuing education, interactions with companies and frequent discussions with your colleagues.

When you hear the excuse used to justify physician preference items, “because that’s what I was trained on in med school,” or “if I don’t get this I’ll take my patients somewhere else,” what goes through your mind?

These aren’t appropriate responses. We all understand that cost containment is critically important in the delivery of medicine in this day and age. You have to be part of the solution for the questions that are being posed, and that includes supply chain issues/product choice.

Just how influential are supplier sales rep perks and GPO contracting with you?

I personally have a better understanding of GPO contracting after my consulting work. I don’t benefit from supplier perks or specifically benefit from GPO contracting but I recognize the role that each of these have in product choice. My hope is that product choice is based on appropriate variables that correlate with clinical outcomes that are best for the patient and the system as a whole particularly as it relates to cost containment. It’s something that I have tried to impart while I’ve had contact on the supply side chain side.

Where do you see the physician’s/surgeon’s relationship with Supply Chain heading long-term?

Hopefully, it will be a slow and steady interaction that will benefit patients and the system as a whole. Cost containment is going to be part of the future.

What benefits can physicians gain by working so closely with Supply Chain in the area of identifying and evaluating new products, services and technology, and what benefits can Supply Chain gain by working so closely with physicians?

From a physician standpoint, the goal is to provide quality and cost-effective care. We don’t want to lose quality care by choosing inferior products. Communication, as I mentioned previously, will be of critical importance.

How might having a physician or surgeon on the Supply Chain staff — or even leading the department — affect the dynamic between the two groups?

I think it’s critical to understand that people on the supply chain side can’t fully understand what’s being delivered by the physician and at the same time the physician often has a lack of understanding with respect to supply chain issues. The only way to improve the situation is by having an ongoing dialogue. We’re all in it to provide quality patient care and all understand that we can deliver quality care in efficient manner and potentially with cost savings when we’re all in it together.

SKARDA IN PERSON

Unlikely source of inspiration:

Starting my own sprinkler installation company as a teenager I learned two things when it comes to sprinkler parts: 1. You get the quality you pay for, and 2. The cost of quality can be negotiable… with volume.

Most creative thing he’s ever done:

In the past year I have created a system-wide policy that governs who can do what where when it comes to the sedation, anesthesia, and procedural care of high-risk children in a 23-hospital healthcare system. There were a lot of competing forces and perspectives. The result of the development process was much different than what I had expected the policy to look like. This required a great deal of creativity… and principled compromise.

What makes him laugh:

TV series “Arrested Development”

Best and worst advice someone ever gave him:

Worst: Being a surgeon is a calling; Best: Being a surgeon is a job

Must-have accessory:

Wireless ear buds

Favorite thing to do on a day off:

Surfing behind a boat with my family

Surprising fact about him:

I started undergraduate school as a music performance major. [He plays trombone/euphonium.]

How he describes himself in three words:

Focused, results-oriented, annoying

Favorite object he keeps in his office:

A door… sometimes I need to eliminate distractions so I can think.

What he would tell himself if he traveled back in time to when he just started in healthcare:

Get a degree in statistics

DAVID SKARDA, MD

HPN: Why do you feel it is so difficult for doctors to become more directly involved in supply chain issues? What are some of the challenges that physicians may have with Supply Chain that makes them so resistant to Supply Chain recommendations?

SKARDA: Before I answer this question let me state unequivocally that I believe that physicians — surgeons in particular — are becoming increasing involved in supply chain issues. I think most physicians understand that the current costs of health care are unacceptable and without significant change cost will only get worse. Surgeons understand that most of their patients have high deductible plans and, from a practical standpoint, many of their patients will be paying “out-of-pocket” for their care. Surgeons are much more willing to engage in the process of reducing the cost of care when they know their patients will see a direct benefit in the form of a smaller bill.

I believe there are several reasons that physicians have avoided being directly involved in supply chain issues:

• Although this is changing slowly, I believe there is imbedded within the physician culture a desire to be separate from the finances of medicine. Often, this takes a religious fervor or is worn like a badge of honor that extends the spectrum of “I treat all patients regardless of their ability to pay” to the extreme of “I don’t even want to know how much care costs. . . my job is to simply give my patients the best care possible regardless of cost.” I believe there is physician cultural momentum regarding the burgeoning costs and the unsustainable future of healthcare that is causing physicians to realize that their perspective on this must change or their ability to care for a majority of their patients will evaporate.
• Time spent dealing with supply chain issues is usually not compensated well enough to offset the loss from clinical revenue that could be collected using the same time to treat patients. The reality is that most surgeons are still compensated on a fee-for-service basis. Dealing with supply chain issues takes time.
• In addition to the financial compensation issues I described above there may also be an emotional reward/career satisfaction differential that may hinder surgeons from spending much time engaging in supply chain issues. The emotional reward/career satisfaction that a surgeon receives from a surgical procedure that cures is hard to beat, even when compared to a “really good meeting that saves a few hundred thousand dollars.”
• Dealing with supply chain issues usually leads to some sort of device standardization. This means there will be angry colleagues that will not get their “pet” instrument and will focus the anger and frustration on the surgeon that worked with the supply chain to decide and implement changes in device availability.

Regarding your point on compensation, does it matter if the physician/surgeon is a hospital employee as the employer can require participation as a condition of compensation? Short of employment, how might compensation for physicians/surgeons-with-privileges be derived appropriately? Is this where gainsharing concepts can play a role?

In our system surgeons are about 70 percent affiliated and 30 percent employed. You would expect that those physicians that are employed would be more engaged in supply chain/quality improvement projects but this does not turn out to be the case. This may be due, in part, to the fact that involvement in these supply chain/quality improvement projects has not been specifically included in employed surgeon contracts. Unexpectedly, many of our strongest surgical leaders in supply chain/quality improvement projects are affiliated and are involved because they believe in the projects themselves and feel it is the “right thing to do.” Historically, we have attempted some gainsharing concepts in the form of a percentage of savings (usually around 30 percent) being available to surgeons for capital purchasing. This has never taken the form of direct compensation gainsharing. We are not convinced this works very well. Most of the funds available to surgeons during or following a gainsharing project go unused. We do find that the idea that supply chain projects improve value for our patients is compelling to surgeons. When standardization and supplier contract negotiations work well patients actually get a smaller bill. We find this actually motivates surgeons better than gainsharing concepts.

In some ways, the physician/surgeon relationship to supply chain resembles the patient relationship with payers. In that regard, patients receive care for which they don’t pay completely or directly (payers do that) just as physicians/surgeons gain access to products for which they don’t pay completely or directly (hospitals do that). So how logical — and realistic — a solution would it be for physicians/surgeons to have a copay for preferred products where they contribute something to offset hospital budget constraints?

This surgeon copay concept is compelling and would likely have a dramatic effect on device utilization very quickly. For example, if the surgeon’s professional fees were affected by the cost of the devices used during the procedure… where a surgeon who uses a more expensive device is actually compensated less than a surgeon who uses less expensive devices for doing the same procedure.

How, when and why did you decide to get involved with supply chain issues?

In 2011 when I arrived as a new surgeon at our children’s hospital I found that many of the surgical devices that I preferred to use were not stocked at our hospital. I did some digging and found that the devices I wanted to use were available in our system. Additionally, I found they were our system’s preferred devices. The children’s hospital simply didn’t order the better lower cost options. In essence, the children’s hospital was choosing to use very expensive devices. When I asked managers and administrators at the children’s hospital why this was the case, I was told that they had been using the same devices for more than 10 years, and the surgeons were unwilling to change. At our next attending surgeon staff meeting I brought this issue before my new partners and they agreed to allow me to bring in the newer (lower cost) and better devices. Additionally, the group as a whole felt there was an opportunity to be aggressive with this process and identify the least expensive way to do some of our most common procedures (appendectomy, etc.) and standardize the way all surgeons at this hospital do these common procedures. I did some research and found that substituting devices such as pre-tied loops instead of staplers and hook cautery instead of an advance energy source could save more than $1,000 per appendectomy.

All surgeons at the facility agreed to change the way we did these common procedures leading to a dramatic reduction in cost to the system and reduction in the size of the bill to our patients. The surgeons tolerated the change impressively well and the OR staff appreciated that they could pull the same instruments and devices for every appendectomy regardless of surgeon. The only surgeon-specific item for these procedures was glove size.

I was hooked.

What an intriguing and noteworthy way to handle such a situation. Do you feel that in general the majority or a minority of physicians/surgeons operate this way? Do you feel the way you responded should be the norm among your colleagues and peers? Why?

I hope that this is a majority. I do not believe it is a majority. I think the way I responded should be the norm. I think it is important to note that I happen to work in a group of very skilled pediatric surgeons who are aware of the greater financial issues involved with medicine and are motivated to “do the right thing.” They “played along” with this project in a way that many surgeons would not.

What’s a myth about your profession (and your colleagues) that you’d like to bust for supply chain readers?

Surgeons can change the way they do procedures. It can take a few months and there is a learning curve. However, surgeons can change. Importantly, many of the “time-saving” devices that have been effectively marketed to surgeons for the past 40 years do not really save that much time. When I moved an entire group of surgeons who had been doing appendectomies with staplers and advanced energy to doing appendectomies with pre-tied loops and a reusable hook cautery there was only a two-minute increase in skin-to-skin OR time.

What motivates you to be willing to cut costs, even if it means switching to a brand of product with which you may not be comfortable or you may not favor for whatever reason?

There are three main reasons:

1. I know this improved value for our patients. Their bill is smaller. In the current “high-deductible plan environment” this leads to less money out of the pockets of my patients and their families.
2. I believe we as surgeons need to be adaptable in our technique so that we can deal with sudden changes in device availability. We need to be facile with several different approaches and device models for surgical problems. You never know when a natural disaster or world event will alter the supply of a particular favorite device.
3. Device producers believe surgeons are not willing to change and use this knowledge to their advantage as they negotiate contracts with healthcare systems. These device producers operate with a very high margin… and want to keep it that way. Working with surgeons to change devices disrupts the device producer advantage at the negotiation table and allows healthcare system to negotiate in a more open market environment.

Why do you believe physicians are so reluctant to change product brands?

Physicians (surgeons in particular) develop skills and techniques that take advantage of specific strongpoints and compensate for specific shortcomings that each version of surgical devices have. When you give them a different design of a similar device they immediately identify these design differences as device shortcomings because they do not have the skills and techniques to deal with these differences. All this occurs during the stress of an operation on actual patients and feels very unsafe to the surgeon. I believe this is what leads to a physician’s reluctance to change product brands.

How successful a solution would it be for device manufacturers, by and large, to “sponsor” selected medical programs and schools where physicians and surgeons would train and practice using their products. When those physicians and surgeons graduate they are identified as users of specific products that can facilitate the “hiring” or “access privileges” process more convenient and efficient for hospitals, which could avoid fissures with doctors over physician preference items?

My concern is that this type of device-specific training would create device specific surgeons and make it more difficult for a system to be nimble and change preferred devices as part of an ongoing negotiation process.

When you hear the excuse used to justify physician preference items, “because that’s what I was trained on in med school,” or “if I don’t get this I’ll take my patients somewhere else,” what goes through your mind?

I understand where this statement comes from. The feelings of discomfort and frustration are real. I take time to talk with the surgeon about this issues and make sure they understand the “why” and we move forward.

If the two of you are not able to reach some sort of agreement, then what?

If this conversation breaks down it will eventually lead to an endpoint of me asking something like, “Are your surgical skills such that you are unable to adapt to a different device and you need to continue using X (more expensive) device due to safety concerns?” If the answer is yes, then I give them the device that makes them safe.

Just how influential are supplier sales rep perks and GPO contracting with you?

We attempt to manage supplier sales rep perks as much as possible. We use Intalere as our wholly owned GPO. It focuses mostly on commodities and less acute products. We self-contract for true physician preference items. So the answer from me here is: Very helpful in the commoditized space, but not as much in the highly preferenced categories.

Where do you see the physician’s/surgeon’s relationship with Supply Chain heading long-term?

Physicians/surgeons have to play a central role in the decisions and direction of the Supply Chain. The physician/surgeon discomfort these changes cause require that the changes come following open discussion from someone with clinical/operational credibility. The leaders making these decisions and communicating them with physicians/surgeons must be clinically active and respected peers.

What benefits can physicians gain by working so closely with Supply Chain in the area of identifying and evaluating new products, services and technology, and what benefits can Supply Chain gain by working so closely with physicians?

There are a host of benefits:

• By improving value we can keep the doors open and the lights on. Our current trajectory is unsustainable and we need to change in order to stay in business
• Working with the supply chain can reduce the size of the out-of-pocket bill for my patients
• Working with the supply chain can ensure that I am using most up-to-date devices and techniques… new and better technology does not need to be more expensive.