How to collaborate with physicians on PPI Cost Savings Initiatives?

It's a priority for hospitals and health systems to remain profitable while providing improved patient care and experience.?

And one of the best ways to do this is to reduce unnecessary spending by driving down the number of supplies—especially physician preferred items (PPI), which account for 40-60% of your hospital's total supply costs.

Nevertheless, reaching a compromise with physicians and optimizing PPIs is not always a foregone conclusion.

In this article, we'll show you how to collaborate and work with physicians and your internal teams on PPIs to reclaim millions of dollars in wasteful spending.

The three biggest obstacles for hospitals when they are starting their physician preference item initiatives

Generally, Physician Preference Items (PPIs) tend to be some of the most expensive products ordered by hospitals. And of course, this has an impact on the profit margins.?

Here are 3 of the biggest challenges hospitals face when they launch their PPI initiatives in an effort to better control their expenses.

Data analysis?

Data analysis is the foundation of the entire initiative. As we like to say at VIE HEALTHCARE, "what can be measured, can be improved."

So, it is crucial to have a clear picture of how the items you purchase are being used.

The most profound reason why data analysis becomes a hurdle is the amount of data that is needed to perform an accurate landscape and analysis because it's not just about getting a utilization report from the vendor. Instead, it’s about going through your PO detailed report, pulling in the bill-only data, pulling in the reimbursement data, and then subcategorizing all the data.?

That said, data analysis is the first area where collaborating with a consultant who frequently works on these initiatives can really help speed up the process, make the analysis more accurate, and move your project forward faster.?

Physician engagement?

Physician engagement and data analysis are linked. You need to establish credibility through accurate analysis and insights; and provide precise, concise data that makes sense to the physician who will want to see it and provide feedback.

Then, using data analysis and physician feedback, you'll be able to develop a uniform strategy for engaging the vendors.?

Pro-tip: Put your data together in a way that your internal stakeholders will feel comfortable with. This can reduce significantly the objections you might have to deal with.?

Uniform strategy for engaging the vendors?

By allowing vendors to take part in the PPI process, expenses can be reduced and change can be implemented more efficiently.?

The basic fact is that physicians often choose supplies based on personal preference, but in reality, they might make different choices if they had more information at their fingertips.

So, gather all the data together and present a uniform strategy to vendors to gain support not only from physicians but also from C-suite and the supply chain because it’s a win-win situation for everybody.?

How to handle meetings with physicians?

Supply chain executives know that meeting with physicians—and reaching an agreement with them—can help achieve meaningly cost savings for their organization. But it takes time and effort to secure new contracts or renegotiate current ones.?

So, whenever you’re meeting with physicians, keep in mind that what they want to see is benchmarking. From the perspective of the constructs they're using, they want to see how they compare to the market.?

• How do my case costs or my construct costs compare to the other physicians who are using different vendors at the same organization??
• What’s my profitability like in these cases??

These are some of the questions they’re interested in. And you need to come fully prepared.?

Pro-tip: understand that the physicians and surgeons are extremely busy and that you need to make good use of your time with them. Have the data organized and well presented, and put it in the way that they understand it so you can take in their feedback, listen to their suggestions, and ultimately get their support behind the initiative.?

What’d be the most successful process in having physician conversations??

After getting a solid analysis together, presentation is definitely the most significant issue.?

Why? Because this is the moment of truth. You’re on stage, presenting everything to the physicians.

At this point, the most successful process would be to have all your data cross-labeled in sub-categories.?

Some pro-tips would be to:

1. Keep the presentation as short as possible;
2. Get so prepared for whatever question might come your way;
3. Learn to listen to the physicians and cooperate with them because you already know everything that the data is going to tell you. What you don't know is the information you will get from the physician. So, use that time to listen carefully and get as much insight as you possibly can.?

This can help you figure out what was happening previously, why things were contracted the way they were in the past, what's happening now, and most importantly, what's going to happen in the future.?

It's going to be no good to negotiate constructs if, in four months, that same position will be using a different theme or a different contract. Therefore, make sure you understand where they're headed.

The 3 Cs to use when you're ready to speak with your physicians

When you're about to have a conversation with a physician, you need a proven strategy that will help you make the most of the discussion. If you're unsure how to do this, our 3-C process will help you.?

Communication

At this level, good communication means that you have successfully organized the data so that you can answer all the questions that will be asked.

Collaboration

We can't stress enough the importance of collaborating with physicians to understand their current and future needs, their comfort level with their vendors, what products they like and don't like, how they feel about the current initiative, and whether they are open to potential change.?

It doesn't stop there. You can also find out if they believe the initiative is fair and whether or not they will support it. What’s more, do they think the supply chain is approaching vendors with a fair approach based on market data?

All of this put together will help you build trust with them and that brings us to the last C which is Confidence.

Confidence

Have you been able to establish a trusting relationship with the physicians? Do they trust the approach that will generate the result so much that they put their weight behind it?

The truth is, there is no one-size-fits-all strategy. So, it's hard to negotiate a contract for one category of PPI and expect it to work for a number of different organizations.? The reason is, that everybody's in a different position.?

Therefore, ensuring that there is at least an appropriate strategy that fits your organization is key for confidence.

A surgeon may perform 80% of the volume in a stand-alone hospital and use the same vendor for 15 years. This is a really different approach and strategy than coming into an ITN where you have hospitals that have been recently purchased by people new to the organization, where there are 20 or more different surgeons using seven different vendors.?

It's an entirely different ball game and you can't just go with one format or one approach and expect everyone to have confidence in it.

This is why communication and collaboration are crucial to building confidence, as you need to understand everyone's perspective and come up with a strategy that works well for all the parties involved.?

That might be standardizing the vendors, or charting utilization down from seven vendors to three or from three to one.?

Learn more about Physician Cost Awareness Strategies from VIE Healthcare's Research Report on this subject:

For proven strategies to increase your hospital’s financial and operational performance—and rapidly reduce unnecessary costs, schedule a call with me, Lisa Miller.