Physician preference: Aligned, in line or out of line?

When it comes to physician preference in the healthcare organization, the two sides generally and historically follow this trend: Physicians represent church; Supply Chain remains part of state.

A study conducted in 2014, “Physician Engagement in CCC [Community-Based Care Continuum],” by Stratus Health and KHA Research, found at least two significant cultural differences between physicians and (hospital) business managers, of which supply chain professionals would belong:

• Physicians are focused on expertise; business managers are focused on efficiency.
• Physicians’ primary loyalty is to patients; business managers’ primary loyalty is to the organization.

While this may not be news to supply chain professionals, it certainly fits the long-held stereotype of the oft-contentious relationship between the two professional groups that oft succumb to personality challenges.

To wit, Delta Health Care Consultant Randy Bauman identified 12 lessons that administrators learned from acquiring and divesting medical practices during the 1990s. One of the most intriguing: “From a business standpoint, the only similarity between a hospital and a physician practice is that they both have patients.”

For product selection and contracting, Supply Chain also knows that both have little-to-no patience for each other either.

But as the two sides grapple and quibble over specific brands, sales representative access and relationships, contract pricing and practice-related product usage patterns, some on either side recognize that the stereotypical “oil-and-water” interactions between the two are by no means homogenous or monolithic.

Indeed, at some healthcare organizations, physicians are closely involved with Supply Chain, whether melded on the org chart to dotted-line reporting to open-door policy consulting and facilitating.

Is the overarching disconnect at many facilities due simply to misunderstandings, misinterpretations, miscommunications or missed opportunities — or all four? That’s what Healthcare Purchasing News wanted to explore.

HPN listed five “stereotypical” observations about which we asked clinical and supply chain executives to agree or disagree (true or false) and explain their reasoning.

In short, debunk and enlighten. And did they ever. Read on.

1Physicians don’t care about the price or cost of products. They just want what they want to care for patients. Hospitals should pay for it because physicians bring them business/revenue.

False. Most physicians are simply not aware of the price or cost of products. In my experience, however, once physicians are informed they are extremely cost-conscious.

Nancy LeMaster, Vice President, Supply Chain Operations, BJC HealthCare, St. Louis

False. Physicians care about costs and the implications to their patients. Most are aware that many patients have high-deductible plans and the overall impact cost has on those patients. In some cases physicians also understand the impact on costs to the hospital and how that affects the hospital’s ability to provide the staff and equipment that create a good work environment for the physicians. In addition, if you move the conversation from cost to value and talk about the implication on outcomes then you can have a more productive dialogue.

False. Most physicians care much more about the cost of products today than ever before. And they’re beginning to use the traditional concept of value (i.e., worth/cost) to decide whether and how hard to fight for personal preference items. Medical staff members have a lot more knowledge about and understanding of hospital finance than was the case even five years ago, although there’s still a long way to go to achieve a true partnership based on both shared and complementary values.

I think most physicians until recently would have said that is true. But in 2016 physicians became increasingly aware of the need to contain costs, and the broader business needs and requirements of the hospitals where they work.

Robert M. Molloy, M.D., Director, Center for Adult Reconstruction, Department of Orthopaedic Surgery, Medical Director, Supply Chain Management, Cleveland Clinic, and Medical Director, Excelerate

False. While physicians primarily focus on providing high-quality patient care and achieving outcomes, our experiences has shown that physicians would like to be part of the decision-making process. The gap is the education and knowledge transfer required for physicians to understand costs of goods, clinical evidence on product equivalence and efficacy, and the steps involved in the supply chain buying process. Involvement and education of the physician is the first step. Hospitals must be willing to solicit input from clinical staff.

At Cleveland Clinic, we felt this was an important process to change physician mindset and include them in the purchasing decisions. They are our partners in the process and they can also be advocates when talking with manufacturers. Excelerate is a provider-led, patient-focused and physician-engaged sourcing model started by Cleveland Clinic and Vizient. Through this model, physicians and clinicians work together with supply chain leadership to identify the right products that will lead to the highest quality outcomes for patients. Only then does negotiation take place with a manufacturer. This involvement has ensured that physicians are integrated into the sourcing process and their voice is heard. At Excelerate, supply chain management is a critical link to life-changing treatment, research and innovation. From strategic sourcing and contract negotiations to purchasing and materials management, everything we do empowers caregivers to perform at their absolute best for patients, each and every day.

2Physicians don’t respect, view or even want Supply Chain as business advisers/consultants to help improve their practices through product selection and use.

LEMASTER: True with the following caveat: I don’t think physicians disrespect supply chain; I think they don’t even think about us unless prompted. We haven’t done a good job demonstrating how we provide value to the physicians. Too often we lead with an “ask” — I need you to support me on this price initiative or consider changing product.  We should start by asking what we could do for them, what problems and issues could we help solve. Then we could connect the dots for the physicians in a way where they could better understand our role. The movement to bundled payments will foster this type of discussion.

HAYTHORN: False. I often think the physicians do not know supply chain professionals, and they certainly do not understand what they do. The future is about partnership and engagement. Supply chain professionals must do a better job of defining their value and role in organizations, and doctors need to use these professionals to make their lives better.

REITER: False. Many physicians — especially in procedural specialties — are quite used to taking advice on product selection and use from third parties. They’re called reps! What’s changed is that hospitals have more knowledgeable people in supply chain management and finance, etc., and medical staff members are learning to trust input from those people in their own organizations, and [group purchasing organizations] where many of whom used to be product reps. This eliminates the moral hazard inherent in having industry agents make and derive personal benefit from product recommendations.

CUNNINGHAM: False. As the supply chain executive role in the hospital/health system has been elevated to an executive level, the education, knowledge, skills and abilities of the new supply chain leader have advanced. The advancement, paired with the availability of more credible data and savvy analytical capabilities within supply chain, has opened the eyes of physicians. They are beginning to view supply chain leaders as trusted advisors — who aren’t just out to cut costs by any means necessary.

Again, this observation may not be generalizable to the entire country as there remain pockets of organizations that have yet to acknowledge the significant contribution that the supply chain can make to the organization with a higher level of supply chain leadership. However, there is a major shift happening. The importance of having a strong, influential physician champion either in or supporting supply chain is also very important. Physician to physician dialogue remains a very effective strategy for the supply chain leader.

DONATELLI: False. As it relates to their private practices physicians are typically very open to having supply chain assist in the reduction of costs. When it comes to their practice within the hospital it is not the role of supply chain to improve the way they practice. The role of supply chain is to understand the technical demands of physician practice and to provide the products and to assist physicians to provide the best care possible. To accomplish this supply chain needs to help physicians understand evidence, become knowledgeable about costs and provide data necessary to compare products used and their associated costs by physician by procedure.

SCHLOSSER: True, because most physicians don’t even know the supply chain people at their hospital, let alone their role.

MOLLOY: False. Physicians seek out knowledge to better understand how things work. There is no difference between seeking knowledge to practice medicine or understand supply chain processes. Physicians want to understand to improve their practices. Understanding product selection, clinical equivalency of products, and best practices in utilization while incorporating actionable data is something physicians and supply chain leaders must achieve together in order to be successful. As part of its core supply chain process, Excelerate has developed supply utilization guidelines to help physicians and supply chain leaders understand the differences between product alternatives, and then provides guidelines for utilization to achieve optimal patient outcomes.

3Supply Chain recruiting physicians for value analysis projects and the like is just corporate political pandering to obtain their influence and support for something, such as standardizing product(s) or vendor(s).

HAYTHORN: False. Decisions about supply chain cannot be made without strong clinical input. Engineers do not make decisions about products without including the consumer in the design process. This is no different from how the relationship must evolve between physicians and supply chain.

REITER: Nonsense! In today’s pay-for-performance and accountable-care environment, all hospital and health system employees benefit from better outcomes. Outcomes-derived pay-for-performance drives bonuses, resource allocation, etc., for everyone in the organization, not just physicians.

LEMASTER: False. Hospitals and supply chain care more than ever about outcomes. We are incented to look at the total episode of care and make sure we are doing what is best for the patient. We need physicians to lead these discussions because we have to move beyond products physicians are used to or comfortable with to really look at the data regarding how these products perform. Physicians are the only ones who can challenge each other and lead a productive discussion about how products impact outcomes.

SCHLOSSER: False, because value analysis done properly recruits physicians to be transparent with them and give them a voice in decision-making. That’s also the physician engagement approach that yields positive results, versus hoping for rubber stamps from them.

CUNNINGHAM: False. Supply chain recruiting physicians for value analysis projects is a strategy that has proven to be effective, and a strategy that is even more mission critical in the new world of value-based care. In most cases, physicians want to be engaged in the process and have real influence over decisions and outcomes. However, when physicians are engaged for the sake of “pandering,” the process and any physician engagement efforts cannot be effective. Organizations should not engage physicians at surface level. They must be committed to both putting patients first and incorporating physicians’ perspectives into the decisions.

DONATELLI: False. Physician collaboration with supply chain is essential to help reduce costs while providing the products and services to deliver the best outcomes possible.

MOLLOY: False. The changes in healthcare affect everyone: Physicians, health systems and patients. Physician participation in supply chain and value analysis projects is an essential process for sustainable changes to purchasing decisions and utilization practices. Physicians want a voice and part of that voice is becoming part of the decision-making process. Supply chain decisions are not based solely on price. Actionable data and business intelligence at the point of use creates a more predictive and prescriptive sourcing model. By combining service line analytics at the point of use with a quality-centric sourcing process allows Excelerate to foster an ecosystem built on a predictive and prescriptive modeling that engages physicians in a more transparent cost-reduction process. Clinical outcomes become a driving factor in supply chain selection and physician involvement is paramount to making the right choices.

4Physicians believe Supply Chain mainly follows the policy of “go cheap or go home.” They contend that for Supply Chain, it’s the budget that counts because without the budget the doors won’t stay open, and doctors won’t have a place to practice medicine and operate on patients.

HAYTHORN: True. I do think this is an accurate perception. The reality is that the role of the supply chain professional is still not well-defined. Although part of their role is to control costs, they also want the best products in place to support high quality care.

CUNNINGHAM: False. First, I removed the word “cheap” from my vocabulary in the early 1990s after engaging with McFaul & Lyons, a leading value analysis/non-labor expense reduction consultancy of the time, as I learned that “cheap” implies poor quality even when that isn’t the case. Further, if physicians perceive that the only factor for decision making is financial, they are less likely to engage and will be resistant to the change process.

Secondly, supply chain cannot do its work in a vacuum. As a bedside operating room clinician, I learned early on that I could influence the physicians’ opinions of change by virtue of access — simply having their ear — during the course of surgeries. Broad clinician engagement and strong alignment is paramount to the success of physician engagement. One person cannot do it alone.

That said, the need to operate in a financially responsible way is an important factor to “keeping the doors open.” Organizations that have not responded to the environmental factors driving reimbursement and expenses are no longer in operation or have been engulfed by the larger, more effective health systems. The days of cost-plus reimbursement are gone for the majority of hospitals and health systems, and for those that still are able to get these types of contracts, they are operating in a bubble that is sure to burst. There are few hospitals in the country that can break even and less that can remain profitable on Medicare reimbursement. Thus, the imperative to cut costs has never been greater. That said, you cannot cut your way to profitability, there must be a dual strategy to become more efficient and create capacity for growth.

LEMASTER: True. We are still in the phase of convincing physicians we are committed to the value discussion. One of the challenges is if we question the status quo or push for a change the initial physician reaction is that we just care about the cost. Some of that pushback is legitimate. Most supply chain departments are still evaluated only on money saved not total cost of ownership or quality implications. That is why it is so critical to have physician champions leading these discussions and aligned with supply chain. They can push harder on the cost/quality balance that delivers value.

SCHLOSSER: False. The formal rollout of the national Cost, Quality, and Outcomes (CQO) Movement [of the Association for Healthcare Resource & Materials Management] happened nearly four years ago now, and since that time I think all supply chain personnel have come to understand that enhancing quality and outcomes is part of their responsibility, not just overseeing and managing expenses for hospitals. Physicians — at least those working with supply chain at some level — are aware that the role of supply chain has been elevated by the CQO Movement.

DONATELLI: True, but only when physicians in an organization have not had the opportunity to work collaboratively with supply chain to achieve the highest quality at the lowest cost.

REITER: False. The concept of buying right or buying twice is spreading rapidly. The doors won’t stay open if outcomes don’t measure up to competitors’ on public report cards like Hospital Compare, U.S. News & World Report rankings, Healthgrades, etc.

MOLLOY: This is false. Physicians want what’s best for the patient. They also understand thoughtful and strategic budgeting plans are part of the healthcare equation of value equals cost over quality. Thanks to the Affordable Care Act, physician and hospital reimbursement is now directly tied to achieving quality patient outcomes. Both physicians and supply chain leaders understand patient outcomes are not directly correlated to the price of a product. It is the responsibility of physicians and supply chain leaders to work together to understand the changes and patterns inherent in patient care events which will transform the way health systems deliver support. Utilizing the core competencies of Excelerate enables physicians and supply chain leaders to respond to demand signals during procedures, changes in patient case mix and service line volumes to determine the right product mix that delivers the best patient outcomes.

5Showing physicians “the data” is enough to convince/pacify them to go along with Supply Chain’s plans.

CUNNINGHAM: False. In addition to the organization’s cost and utilization data, physicians need to understand the market landscape and the evidence that exist to differentiate or commoditize products, especially those products that are clinically sensitive, including physician preference items. Physicians must be given the full, unbiased landscape in order to make meaningful decisions around selection and utilization or products.

Countless studies have shown that most physicians don’t know the cost of the items that they use on a daily basis or the cost of procedures. Additionally, they are not fully educated on the unbiased, scientifically rigorous evidence that exists to differentiate, or commoditize, the products that they are selecting.

Sadly, following their academic training, physicians rely heavily on the manufacturer representatives to provide them with the information on clinical equivalence of products mostly because their patient treatment workload prevents them from having the time to do the research on their own. When supply chain leaders are able provide the latest clinical research, physicians become almost instantly engaged and willing to have conversation, even if they don’t agree based on literature alone. This clinical literature is key to aligning physicians with supply chain and releasing them from the grasp of medical device reps who have had a strong hold for decades.

However, we also must put ourselves in the physicians’ shoes. Supply chain should not assume that physicians choose devices in order to be obstinate or that they’re unappreciative of the overall challenges hospitals are facing. The reality is that their choices are based on the information provided to them — even if it’s from device reps alone. Hospitals must take this realization to heart, commit to investing in supply chain, and provide this much-needed clinical evidence, or physicians will only strengthen their relationships with reps.

SCHLOSSER: False, because the first thing physicians are going to do when shown data is question it. Supply chain has to be transparent with physicians about their common goals and data sources, as well as include them in conversations around how data gets analyzed and the decisions they’re trying to drive.

LEMASTER: False. First of all, it shouldn’t be “supply chain’s”plan. Physicians and other stakeholders — don’t forget the clinical staff that supports the physicians — need to be part of creating the plan. Data is the first step in determining a course of action. I agree physicians are competitive, and data is a great way to get them engaged. You still need to connect the dots in terms of what action needs to be taken to achieve the desired outcome. It is critical you develop a feedback loop to see if the agreed upon changes happened and were sustained.

REITER: It depends. If “the data” are relevant, clean, validated and compelling, physicians are much more likely to be convinced. But if those who present “the data” can’t make a coherent and compelling case, or if they have no support beyond raw data, they cannot expect to convince anyone of anything.

DONATELLI: Sometimes this is a true statement. As we all know physicians are highly competitive. Oftentimes by simply posting good data that compares costs for like procedures by doctor will stimulate physicians to “take action” to reduce their own costs.

HAYTHORN: False. Data is only part of the equation. Physicians will come to the table asking, “What is in it for me?” I think you have to be prepared to answer that question. Furthermore, you have to be able to really tell a compelling story…and data is only part of the story.

MOLLOY: False. Data alone will not always convince physicians to follow supply chain’s plans. It has to be the right kind of data that explains the market alternatives and then provides clinical evidence of patient outcomes. That alone may not be enough to convince physicians to explore product alternatives. Peer-to-peer collaboration can also augment discussions and assist physicians in exploring different alternatives. Excelerate utilizes peer-to-peer physician collaboration to facilitate conversations to discuss difficult cases and share best practices to achieve positive patient outcomes.