6 Tips for Succeeding in Physician Preference Management
Provista, LLC, a leading supply chain improvement company.
With the stroke of a pen, physicians impact a healthcare organization's cost structure in addition to directing patient care. Especially for orthopedic and spine practices, the cost differences between commodity and premium devices can be significant — by some estimates, less than 50 percent. With supply costs standing second only to labor costs for most non-acute businesses, convincing physicians to consider switching to a less costly products is key to building a stronger business. So, knowing the critical role physicians play in supply chain costs, the question becomes: Why do so many organizations ignore the 800-pound gorilla in the room? Even more importantly, how can you not only start the conversation but come to a mutually agreeable outcome on physician preference?
Many forces shape a physician's preference for specific equipment and supplies. Often preferences develop early in a physician's career in medical school, where he or she becomes familiar with certain items through repeated use. Success in physician preference hinges on meeting the physicians where they are and engaging them in critical conversations so that everyone walks away from the table satisfied.
Tips to jump-start successful conversations with physicians
In some cases, coming to an agreement about physician preference stalls because of a lack of communication or an inconsistently applied or poorly defined process. Here are six tips for having successful conversations with your physicians about aligning preference and costs.
1. Aim for no surprises — involve physicians early and often in supply chain discussions and cost savings initiatives. Identify a physician champion who is respected by his or her peers to lead specific cost savings efforts. Use your current committee or governance structure as the means to involve physicians in cost discussions at the earliest opportunity. Any attempt to standardize or change products must be preceded by thoughtful discussion, attention to physician concerns, and effective negotiation using objective criteria and data.
2. Gather data. Before approaching any physician about product costs or supply chain issues, analyze your internal data to determine that particular physician's product/supply utilization and cost per procedure — in other words, what he or she is actually costing the organization in terms of utilization. Experience demonstrates that physicians respond to data about their individual performance. Presenting the data in a blinded fashion preserves privacy while informing and educating physicians.
This process often spurs conversation between specialists regarding procedural differences, the reasons behind variation and the impact of these cost differences on the organization. Tying this conversation to the use of savings to acquire new equipment or improve the OR links physician behavior to the organization's overall ability to provide the necessary resources for patient care.
3. Know your options and come prepared. Before you engage physicians, research all products that may be used in a particular procedure and compare them on cost and outcomes. In many cases, your GPO can help in this process with insight and resources.
4. Determine the impact on reimbursement, charges and clinical outcomes. The discussion with physicians about supply items is often a balancing act between cost and quality. Comparing the use of various products on reimbursement, charges and clinical outcomes may provide a clear picture of which items to recommend to physicians.
Review standing orders and physician preference cards against actual supply utilization per procedure. How much waste is being created that ultimately costs the organization significant dollars? Analyze physician procedural data for case-specific utilization information. Present the data to the physician and discuss with him/her the requirements for the "appropriate" supplies for that procedure.
5. Be flexible about switching suppliers or reducing the number of suppliers. Narrowing the number of suppliers from whom specific supplies are purchased can also be an effective strategy. However, before journeying down this path, make sure you are fully aware of physician sensitivities and loyalties to specific products. Recognize that suppliers often have long-standing relationships with physicians that strongly influence the final decisions about product selection and utilization. If a single source contract just won't fly, work with them to reduce the number of suppliers for that product to as few as possible.
6. Understand the impact of the product on the physician and patient. Having crucial conversations with physicians around their needs and preference will involve patient outcomes and safety, perceptions of patient interests, their own experience, their comfort level with the product or service, the supplier's support and their medical training — not the cost of the product or service or how difficult it is to procure, which are the primary concerns for supply chain staff. Communication with physicians must be in language they understand. Supply chain or operations jargon simply won't achieve the desired accord.
Economic pressures create opportunities for cooperation
While physicians have not traditionally been concerned about lowering a healthcare organization's costs, these issues are real and important. As reimbursements continue to decline, physicians are becoming more willing to take an active role in possible solutions. The results are proving positive for all parties.
When physician preference management initiatives succeed, they can mean thousands of dollars in cost savings to non-acute health care organizations, dollars that flow directly to the organization's bottom line.
Learn more about Provista.
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