Physician preference: Supply Chain matters for patient, industry health

July 1, 2016

Back in 2005, Healthcare Purchasing News launched an annual award that recognized and honored healthcare organization CEOs and presidents who Support, Understand, Recognize and Empower Supply Chain Management. They are S.U.R.E. about the importance of supply chain operations to the health and well-being of an organization and the quality of patient care it delivers. We annually seek CEOs who are actively involved with supply chain activities and initiatives in their own way. More than three dozen of them have earned HPN’s “S.U.R.E.” award and their profiles have been published in each January edition of the magazine.

Starting this year HPN decided to launch a brand extension to honor those professionals a bit closer to supply chain management activities – physicians. Why? We’re witnessing more doctors and surgeons participating in supply chain operations with more depth than ever before so we want to share their ongoing stories with the industry.

Our goal with this inaugural award is twofold: We want to recognize physicians who have made solid contributions to supply chain operations – activities, practices and thinking – and we want to further solidify and strengthen the clinical bonds between physicians and supply chain professionals.

We selected four to profile and receive the first annual Physicians Understanding, Respecting and Engaging Supply Chain professionals or “P.U.R.E.” award to enhance their clinical practices and the patient care they deliver.

HPN’s 2016 Supply Chain-Focused physicians are:

HPN’s wide-ranging interview explored how all four emerged as a supply chain champion and share like-minded, unselfish passion about the people, processes and products that impact patient outcomes and operational stability.

HPN: Are you surprised that it’s taken so long for doctors to become more directly involved in supply chain issues? Why?

Chen: Traditionally, physicians are not schooled in supply chain activities. As the end user, physicians have largely been able to use the products of their choice, and therefore have not personally felt the need to engage with the supply chain. However, in this era of cost containment, it is only natural that physicians are now increasingly involved in supply chain activities.

Chung: I’m not surprised at all. Physicians have historically been shielded from business decisions at hospitals where administrators have bent over backwards to give them what they want and “let them do what they do best.” Most medical schools don’t teach the business of healthcare, which has always been portrayed as being “beneath” doctors. Now that doctors are feeling the squeeze personally with bundled payments and value-based care, they are becoming more interested.

Lyden: No. Many physicians are unaware of how devices get into the hospital until it affects them directly. I have found that physicians just assume it all happens without much effort. Once physicians become aware of the process and that there involvement is critical, they become very engaged.

Reiter: No. Physicians have historically approached equipment and supplies as necessities and entitlements to be provided in accord with their personal preferences and beliefs. Timely availability at the point of care was the sole consideration. How, from where and at what cost they got there were not relevant.

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

CHEN: In 2014, when I joined the Surgical Services leadership at Baylor Scott & White Health, there were several ongoing efforts in product rationalization. It was natural for me to become involved, bringing a clinical perspective to decision making and facilitating communication between supply chain and the clinicians.

CHUNG: This was totally by accident. I was looking for a career change into healthcare management, especially in quality improvement, and I found this job that appeared to require a surgeon. I didn’t really understand supply chain when I applied, but I knew the job required skills to educate other physicians about cost reduction and resource management. In reality, it was only after I started my job that I really started to understand supply chain.

LYDEN: My original involvement with cost control came back in 2003 when the Chairman of Vascular Surgery, Kenneth Ouriel, MD, challenged me to work on reducing our cost base for devices in Vascular Surgery. I started working with Supply Chain to help reduce the cost bases for Vascular Surgery. Over the next five to six years, I eventually knew everyone in Supply Chain. It was because of that relationship and unique involvement with Supply Chain that our Chief Medical Officer, Mark Harrison, MD, asked me to become the Medical Director of Supply Chain and help engage physicians in our health system to do similar processes.

REITER: I always had likes and dislikes as a facial plastic surgeon. But I was never picky about most equipment and supplies until I learned microsurgical reconstruction in 1992, in which flap failure is almost always technical. Comfort and confidence facilitate successful microvascular surgery, so I wanted to use everything on which I learned this skill exactly as I was taught.

As I was the first head & neck surgeon to do this at my center, my department’s reputation – and the future of free flap reconstruction in the head and neck at my institution – depended on my success. Our hand & general plastic surgeons were already using free flaps, so we had a lot of equipment that – as I learned – did exactly the same thing as the variants I wanted, but at less cost for reasons as disparate as list prices and contracting schema. So I quickly learned to evaluate performance and outcomes as criteria for both product selection and price negotiation. After I got my MBA a few years later, I was asked to take a formal leadership role and helped achieve better outcomes at lower cost through evidence-based supply chain management.

Li Ern Chen, MD MSCS, Vice President, Surgery, Baylor Scott & White Health, Dallas

 CHEN UNPLUGGED

Unlikely source of inspiration: Sunshine.

Most creative thing you’ve ever done: Holding exhibitions of my photography.

What makes you laugh:Children being silly.

Best and worst advice someone ever gave you:
Best — Every experience is valuable. Half of what you see, you will choose to
emulate. The other half? You will choose not to incorporate into your practice.
Worst — Just put your head down and do the work. That was code for “this place
has so many problems, don’t even think about fixing them.”

Must-have accessory: Smartphone…that’s an accessory, right?

Favorite thing to do on a day off: Not answer email.

Surprising fact about you: I can’t dance.

Describe yourself with three words: Do the right thing (okay, that’s four words…)

Favorite object you keep in your office: Ceramic mushroom — A reminder that sometimes people will keep you in the dark and feed you [insert expletive].

What you would tell yourself if you traveled back in time to when you just started in healthcare: It’s about to get a whole lot more fun!

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

CHEN: That surgeons are obstinate and irrational. The practice of medicine is data-driven, and surgeons are extraordinarily comfortable making decisions based on data every day in their clinical activities. Many surgeons respond well to good data.

CHUNG: Everyone in supply chain complains that physicians don’t want to change. If that were true, we’d all still be using Palm Pilots. Physicians definitely want to change for the better. We just have to figure out how to convince physicians what “better” is by finding a shared vision.

LYDEN: Physicians don’t care. Physicians always will pick what is best for them and not what is best for the hospital.

REITER: Docs are human, too – so we’re subject to the same emotions and concerns that affect everyone else, although we’re expected to remain aloof and dispassionate. Many changes in healthcare have affected docs adversely, from a growing body of licensed independent non-physician practitioners to sharply reduced reimbursement to significant loss of autonomy in many areas. A kind word and a bit of understanding will go a long way toward overcoming the most common reaction to loss of yet more that we valued in our workplace. In this context, it’s not hard to understand feelings of “Oh no! You’re taking something else away from me?!” We may still be more fortunate than most, but we’re human.

What convinces, inspires, 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 favor for whatever reason?

CHEN: More so than ever before, there are economic pressures to reduce cost of care delivery. Product selection in the hospital is no different than product selection at home. Just as one can be nimble and price-sensitive in purchasing laundry detergent, one can explore more cost effective options in the hospital. Of course, the non-negotiable is that patient outcomes cannot be compromised.

CHUNG: During medical school, I spent three months in Kenya and two months in Papua New Guinea working at village hospitals. You quickly learn to help patients with whatever supplies you might have on hand – or without what you don’t have. I still think of those days when physicians get indignant about their preferences.

In my opinion, a physician’s skills are intrinsic. I always told hospitals that I can use any product to get the same outcome – most of the time – because what if someday I moved to another hospital or another country where those products were unavailable? Being stuck on one brand makes you a less capable surgeon, again in my humble opinion.

LYDEN: The fact that we have always put patients first and outcomes first, and the fact that the  industry continues to be very profitable despite hospitals running on a much lower margin. At the end of the day, industry is still profitable, but hospitals have become the greatest risk of this over time.  As long as patients are first, I think there is plenty of fat in the system to be caught.

REITER: Evidence that others have been able to achieve equally good patient outcomes. Most of us can work with a variety of similar products and will do so as long as we know that quality of care will not change.

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

CHEN: It boils down to physician comfort and patient risk. Physician comfort includes an understanding and predictability of the indications for using the product, how the product will behave, how it will act in the patient, and how to rescue the situation if something goes awry. For these reasons, switching to a new product can take a physician out of their comfort zone and may have the capacity to put a patient at risk. Neither of these is desirable to the physician.

CHUNG: Mostly it’s the “N=1” factor. You have one bad experience with a brand, and you never go back. Perception beats any statistical evidence. You see that with nearly every product out there. Some people believe physicians stick to one brand because of their relationship with the rep, and that may be the case for some specialties, but in general, that is a very rare situation.

LYDEN: Because we have become very comfortable, and unfortunately live by anecdote, and we are uncomfortable with new technology and are unhappy to give up what we are comfortable in using. We are likely to try new products and new innovations because we do not want to be left behind.

REITER: Many are truly concerned that they won’t be able to maintain quality outcomes. Some have physical characteristics like larger stronger hands that make one device more comfortable for them to use than another. Some are brand-loyal for the same reasons that car buyers and cheesesteak lovers are brand-loyal – something about the chosen maker or supplier simply pleases them more than the others do. And a few receive nonclinical benefits from association with their brands of choice, e.g., free marketing through “preferred doc” lists, consulting fees, etc.

Jimmy Chung, MD, FACS, CHCQM, Director, Medical Products Analysis, Providence Health & Services, Seattle

CHUNG UNPLUGGED

Unlikely source of inspiration: Quote from [television show] “Futurama” about humility: “When you’ve done things right, people won’t be able to tell if you’ve done anything at all.”

Most creative thing you’ve ever done: Not sure if this is “creative” per se, but while I was in medical school, I auditioned to be on a beer commercial — didn’t make it, though.

What makes you laugh: My kids when they tell goofy jokes. They are 8 and 9, so their jokes are mostly about bodily functions.

Best and worst advice someone ever gave you: A professor once told me that to be a surgeon you have to have thick skin. This was both the best and worst advice. You do have to have thick skin to survive the abusive environment of surgery residency, but then again, being emotionally closed can prevent you from getting close to your coworkers, your family and your patients.

Must-have accessory: My watch… it has a life of its own and keeps me company when I’m alone.

Favorite thing to do on a day off: Get on my bicycle and ride 50 miles…or bake chocolate chip cookies.

Surprising fact about you: I have a tattoo and used to ride a motorcycle during my surgery residency.

Describe yourself with three words: Self-reliant, thoughtful, respectful.

Favorite object you keep in your office: Basket of candy — it attracts coworkers to come visit me.

What you would tell yourself if you traveled back in time to when you just started in healthcare: Slow down, don’t be in such a hurry to finish school. Take time to make more friends outside of medicine.

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

CHEN: We really need a culture shift toward nimbleness. The current economic and market forces have mandated a critical look at cost and constant reassessment of value.

CHUNG: First, most surgeons trained in multiple facilities during med school or residency, so in reality they have had exposure to multiple items. Usually they follow a favorite professor’s choice. In most other professions, people have to be prepared to use various different brands of products, so medicine shouldn’t be any different, as long as there is no difference in quality.

If a physician threatens to go to another hospital because of a particular device, there is something else going on that they are unhappy about. Surveys show that physicians leave hospitals mostly because they are dissatisfied with OR efficiency and operations, quality of the nursing care, how they are treated, etc. The device is just the last straw, if they leave. Most surgeons don’t want to leave a hospital that they are used to, since that is inconvenient for their patients and logistically hard to do.

LYDEN: When physicians have this reaction it really is that they have not had to make this hard choice before. It is almost 95 percent of the time after the time after they have actually made a switch that they say it was not so hard and my outcomes did not change and that it was actually pretty simple.

REITER: For the former: “So you can never adopt advances in care because you weren’t taught to use them in med school or residency?” “Will you abandon that procedure when the product in question is no longer available?” And for the latter, “If that’s the strength of your association with our organization, perhaps you should do so anyway. A relationship so fragile that one product substitution would break it is not much of a relationship.”

Just how influential are/were those sales rep perks anyway and how does this emerging “repless” model stack up?

CHEN: The strength of the relationship between reps and physicians is largely built on the fact that the physician is not paying for what the rep is selling. Once the rep convinces the physician to use the product, the physician then tells the hospital to purchase it. It’s not surprising that reps go all out to convince physicians to spend someone else’s money. That being said, a good rep’s product knowledge can be valuable, and a repless model would imply internalizing the expertise.

CHUNG: Generally speaking, there appears to be close relationships between surgeons and reps in orthopedics or spine specialties. Sometimes they become personal friends. However, physicians will always stand up for what is best for their patients when it comes down to it. The repless model has its pros and cons, and hasn’t taken off very much. Right now, it just saves the company money without really helping the hospital.

LYDEN: On a day-to-day basis, I do not think that reps influence physician choices. However, if you look overall, clearly, when you have a good rep, sales do go up so they have an effect, just not on a case-by-case basis. They are critical at disseminating new technology and creating a knowledge base. Many items really need clinical specialists who are not motivated by reimbursement as opposed to the sales rep who is motivated by reimbursement.

REITER: The role of reps varies from specialty to specialty and place to place, but no rep should be providing a service that’s indispensable to the medical staff. Sales commissions and associated costs for hospitality, entertainment, etc., are sufficiently high to support expertise in our own employees. So a repless model should reduce direct supply costs enough to let us hire or train product experts ourselves and still save money. And shifting that role to good in-house people will improve the physicians’ relationship with Supply Chain Management through collaboration, education and service.

Will you describe some of the challenges that physicians have in working with Supply Chain?

CHEN: Since physicians have not been to “Supply Chain School,” they will need to gain a fundamental understanding of the structure and functions of supply chain. A recognition of the value of the clinical perspective will allow physicians to be embraced much more quickly by Supply Chain. Clinicians and the supply chain have different data needs, and development of a strong partnership is necessary so that data collected is meaningful clinically and financially.

CHUNG: There is no formal education that physicians can receive in supply chain, so it takes a long time to really get a good understanding of what is happening. Many physicians are too proud to admit that they might not understand something that is healthcare-related when they have already reached the top of their own profession. The other problem is that there is no defined career path in supply chain for physicians. Suppose a physician gets a job as an advisor or medical director for supply chain. Where would they go from there? No one knows, because no one has done this yet.

LYDEN: Getting physicians to the table, getting them involved, helping them to understand that tough choices need to be made to keep hospitals viable. 

REITER: Supply Chain staff and management are often perceived as being totally disinterested in outcomes and unconcerned with physician needs. A growing number of Supply Chain Management people are empowered by senior management to take a more active role in product selection. The attitude that “we have to do it – to cut costs – because you won’t” is an immediate turnoff. Supply Chain personnel who are truly and demonstrably interested in how they can improve care are engaging. If they present themselves to the medical staff as colleagues respectful of the docs’ time and knowledge while offering complementary knowledge, skill and experience, they become an integral part of the team.

Sean Lyden, MD, FACS, Professor and Chairman, Department of Vascular Surgery, and Medical Director of Supply Chain, Cleveland Clinic, and Chief Medical Officer, Excelerate Strategic Health Sourcing, Lyndhurst, OH

LYDEN UNPLUGGED

Unlikely source of inspiration: My wife. She actually has a PhD in Business, and I used to laugh at all the organizational behavior and human resources things she did. Little did I know that I would actually need all of these things, and she has really been great at helping me understand all of the business model issues that I did not understand before.

Most creative thing you’ve ever done: I built a zip-line in my backyard that was 25 feet high just last year.

What makes you laugh: Some of the silly mistakes I make and get away with on a daily basis.

Best and worst advice someone ever gave you: My father’s best advice was your word is your honor — don’t give it away because no one can give it back to you. The worst advice is that life should be fair — it is not.

Must-have accessory: My dictaphone because I type so slow.

Favorite thing to do on a day off: It is a tie between golf and watching my daughters do competitive cheerleading.

Surprising fact about you: That I spend a lot of my days going to competitive cheerleading competitions.

Describe yourself with three words: Accountability, fairness and respect.

Favorite object you keep in your office: A picture of my four daughters walking in front of the golden dome at Notre Dame.

What you would tell yourself if you traveled back in time to when you just started in healthcare: That I arrived 10 years too late — the good days are gone. Now it is a lot of hard work and hard effort.

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

CHEN: As long as we are evaluating the value of products that impact clinical care, this relationship should only get stronger.

CHUNG: Eventually, the role of physicians in supply chain will become clearer because Supply Chain will have to begin to figure out how to integrate patient outcomes into deciding which products bring the best value to their patients and their population that they manage. Physicians currently act as “surrogate buyers” for hospitals because they have no financial risk. As future payment models spread the risk to physicians and hospitals both, physicians will no longer be “surrogate” but “true” buyers of products, and they will begin to actively lead cost reduction programs. Physicians will also have to continue to serve as subject matter experts for new technologies.

LYDEN: I see that this is a new way that there will more clinical leaders, both within hospitals and health systems. The understanding of supply chain challenges will create tomorrow’s leaders for CEOs.

REITER: More and more Supply Chain Management departments and groups will be led by physicians. The shift toward accountable care organizations in which physicians’ income is directly tied to both quality of outcomes and net operating margins will make the wisdom and benefit of being involved intuitively obvious to all.

How do you see Supply Chain’s professional relationship changing with physicians and surgeons when it comes to evaluating “new” technology and technology horizon scanning?

CHEN: Vetting of new technology really should include physicians who know what is truly novel vs. a new version of an existing product. Decisions about new products can be particularly challenging in health systems where equipment and supplies vary by hospital. A physician group that evaluates new technology can be very valuable, particularly if multiple specialties are represented and the decisions are made considering the entire system’s care delivery. Supply Chain’s participation in these conversations will give them insight into the clinical reasons behind the decisions, allowing the development of strong contracts with meaningful key performance indicators.

CHUNG: All supply chain programs should have a physician-led value analysis and tech assessment team. All technologies must be evaluated by reliable and reproducible clinical evidence. Physicians are likely to see intangible value in new technologies and could bring to the table patient-centered value that supply chain and finance may not be able to account for. Robotic surgery is a perfect example. Most hospitals have not seen any real savings or added revenue from their robotic programs. The “value” that robots bring to hospitals is possibly from increased marketing and patient volume for related surgeries, but in reality it’s mostly from physician satisfaction, or the recently defined “fourth” aim of healthcare.

LYDEN: The decisions for new technology will be made without us if we do not start making them and really having tough discussions that instead of proving a device is safe or effective, really getting to the point of does it have comparative effectiveness and is there actually a benefit over what we use today.

REITER: It’s becoming much more collaborative. Non-physician Supply Chain Management people are becoming more comfortable with the basics of outcomes reporting and learning to understand how to use the literature in this regard. As a result, they can intelligently discuss and assess new technology, asking appropriate questions and putting the answers into useful perspective – as opposed to being told “You won’t understand this, but I’m telling you we have to have it”. Physician knowledge of newly reported advances and developing technologies often predates industry exposure by years, so the medical staff can educate Supply Chain Management on what may be coming, how it may be useful, and with what currently used items or technology it can be appropriately compared.

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

CHUNG: Physicians can partner with Supply Chain to develop strategic partnerships with vendors to make patient-centered, outcome-based decisions. If this can be done well, that physician can be a pioneer and early adopter of new technologies that have been proven to be beneficial for their patients.

Most surgeons are still in independent practices and don’t have the time or resources to conduct product trials. Working with vendors can often result in results that might be incompatible with hospital goals. Therefore, supply chain value analysis teams can help physicians with conducting trials with administrative and data analysis support.

LYDEN: Once physicians become involved, they realize that their opinion matters, they need to be good stewards of the success of their own hospital and their own patient care.

REITER: We’ll be better informed sooner about products, services and technology that will help us get better outcomes. 

David Reiter, MD, MBA, FACS, Vice President and Executive Director, Center for Healthcare Entrepreneurship & Scientific Solutions, and Professor (Otolaryngology – Facial Plastic Surgery), Sidney Kimmel Medical College, Thomas Jefferson University, Philadelphia

REITER UNPLUGGED

Unlikely source of inspiration: Miles Davis: “If you don’t have anything to say, don’t say anything.” “Don’t play what’s there, play what’s not there.” “If you understood everything I say, you’d be me!”

Most creative thing you’ve ever done: Facial plastic surgery can be cosmetic, reconstructive or both. I hope I was sufficiently creative to help each patient achieve what he or she wanted and needed rather than what I would have wanted if I were the patient.

What makes you laugh: Irony.

Best and worst advice someone ever gave you:
Best — Don’t waste energy on things you can’t change.
Worst — Don’t bother learning a modern language. You need to study Latin to be a doctor.

Must-have accessory: A guitar.

Favorite thing to do on a day off: Plan, prepare and enjoy a long, leisurely meal with my wife with good wine and good music.

Surprising fact about you: I’ve been a working musician for almost six decades and still play jazz and blues in dive bars.

Describe yourself with three words: In the pocket. Thank you, Wilson Pickett!

Favorite object you keep in your office: The photo gallery on my walls — each picture brings a great moment from my life back to me.

What you would tell yourself if you traveled back in time to when you just started in healthcare: You made the right decision. Just stay flexible and roll with the punches — we never promised you a rose garden.

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

CHUNG: Supply chain needs physicians who are passionate about new technologies but also are experts in their field. A new, sexy technology – like robots – may be attractive to physicians, but can also be extremely costly without added benefit. Working closely with physicians allows collaboration toward what is best for the patient as well as some compromises to try out new products in a formal process. It’s hard for physicians to trial new products on their own, and it’s hard for Supply Chain to trial a new product without the experts. Supply Chain can also leverage their relationship with physicians to negotiate better deals with vendors.

As previously mentioned, Supply Chain will need to start looking at patient outcomes as their success metrics. Physicians can help Supply Chain with interpreting the clinical value of new products outside the hospital setting from a holistic point of view.

LYDEN: Supply Chain teaches immense knowledge about what actually makes the difference in understanding the marketing strategies that industry puts forth to try and get things on the shelves.

REITER: Supply Chain Management will understand more fully and effectively how to balance the mechanics of supply chain management, e.g., cost, vendor quality, ease of logistics, storage and maintenance needs, etc., with clinical considerations. Together, the medical staff and Supply Chain Management can determine and consider the total cost of conversion or adoption of new products, services and technology to define a more accurate and meaningful value proposition for each.

How might having a physician or surgeon on the Supply Chain staff – or even leading the department – change the dynamic?

CHEN: Physicians tend to put the patient and the physician-patient encounter at the top of the decision making hierarchy. Nobody understands these priorities better than the physician, so this fundamentally changes the construct for decisions making. While one may still arrive at the same conclusion, physicians tend to use a different process, engaging a different group of stakeholders. The inclusion of stakeholders in the decision making improves buy-in and makes for less friction at the time of implementation.

CHUNG: Having a physician leader in Supply Chain tells everyone that Supply Chain is serious about focusing on the patient, and that it is ready to move into the patient-centered, value-based healthcare universe. Just consulting physicians as ad hoc subject matter experts is not the same – plus everyone already does that. It also legitimizes the area of supply chain as truly a part of practicing medicine for a population. It sends a message to your patients, your physician staff, your nurses, your vendors, and even your competitors that you are truly innovative and committed to the best care for your community. An executive level dyad of physician and Supply Chain Vice President can be an extremely effective team for setting the vision and strategic goals for the organization.

LYDEN: Generally industry has tried to get the physician on their side to get into the health system as opposed to the physician working with the health system to make sure [something] is brought in appropriately.

REITER: It will elevate the importance and value of Supply Chain Management to the medical staff and enhance the quality of collaboration between the two.

About the Author

Rick Dana Barlow | Senior Editor

Rick Dana Barlow is Senior Editor for Healthcare Purchasing News, an Endeavor Business Media publication. He can be reached at [email protected].