Physician Collaboration: A Key to Effective Supply Chain Management

Years ago, out of curiosity, I reviewed the balance sheet for a complex procedure. I examined the direct cost of implants and disposables used, the list of open-and-yet-unused items, and the facility charges and collections. I quickly saw that my preference items were not reflective of the best negotiated price and the pile of open-but-unused items were simply wasted resources. Of course, unit cost is not the only factor to be reconciled, so I began to overlay the per-minute labor and facility costs—including anesthesia, pharmacy, storage and sterilization, and overall hospital revenue—into the equation. Based on what I learned, I reshaped my preference cards and became involved in implant negotiations.

The dynamics of supply chain, inventory management, and cost strategies in healthcare have always been fascinating to me. In particular, I’ve long been interested in finding value to balance unit costs. For example, while a specific implant might be more costly upfront, there may be a significant offset to this cost through greater efficiency, economy of scale, or the possibility of innovation in clinical care. Quantifying and tracking these non-traditional financial perspectives tends to be more labor-intensive, but the exercise itself can achieve a much more sustainable and rewarding result. 

As a physician leader over shared services at Geisinger Health System—including Supply Chain—I act as an important bridge between the critical clinical and operations gap. One of the things I frequently consider is how to collaborate with physicians most effectively. As a starting point, I have worked to make cost transparency available to each surgeon at Geisinger. This has led to important initiatives in OR efficiency, physician satisfaction, and process optimization. In this article, I'll discuss some of the intricacies of getting physician buy-in and collaboration.

Barriers to Cooperation

From my experience as an orthopaedic surgeon, I’m aware that there is a perception that some surgeons simply don’t care about the supply chain. But it has been my experience that with transparency, open conversation, and opportunity for partnership, surgeons’ objections can be readily overcome. Supply Chain leaders need to start from the belief that the vast majority of surgeons care deeply about the patients they serve. 

Surgeons and physicians take a long view of the clinical journey. They understand that what happens in the operating room or interventional suite has a downstream effect on patient satisfaction and outcome. These important factors are not necessarily visible to Supply Chain leadership. This is the main reason why doctors can be particular and even obstinate in ensuring they have their preference tools and items—they want to perform their very best. In my opinion, it is never their goal to waste resources or ratchet up hospital or health system costs.

Supply Chain leaders need to start from the belief that the vast majority of surgeons care deeply about the patients they serve.

Supply Chain analysts may not have the same context and direct perspective and may even appear insulated from accountability. This can create resentment from physicians. This is why it is critical to involve clinical perspectives in the dialogue. 

At the same time, physicians are generally not as closely attuned to the institutional expense of delivering healthcare. While doctors have a (reasonable) expectation that the tools necessary to deliver the best possible care will be available when needed, they may not know the actual costs attached. To complicate matters, the combination of limited cost transparency and high availability in many environments leads to a misperception of the true expense. It is, therefore, Supply Chain’s responsibility to make cost transparency easily available.

The Controversy of Changing Brands

For the great majority of physicians, there is a comfort level associated with familiarity. It’s usually related to job performance and clinical outcomes. Recognizing this, changing brands should not be done lightly. 

Focusing solely on cost will lead to the perception that an institution is focused on a “cheapest is best” philosophy—which will quickly create resistance and resentment from surgeons. Instead, industry and institutions must make a commitment to educating, training, and trialling to accommodate nuances beyond what is on paper. This requires partnership with physicians and a commitment to optimal patient care. 

On the other hand, the supply chain can find themselves dealing with irrational refusal from surgeons to even consider other possibilities. I’ve heard surgeons reference their medical school and residency training as reasons to never consider a brand change. “This is how I’ve always done it,” is an oft-heard refrain. But we must keep in mind that training only represents early steps in lifelong learning. Medicine evolves and we must evolve with it. 

No single vendor or group of vendors should have a monopoly on a surgeon’s entire career. As a supply chain executive, I’m sometimes confronted with the statement along the lines of: “If I don’t get this particular item, I’ll take my patients somewhere else.” My response is simple: “Then go somewhere else.” For supply chain management to work, both sides need to be willing to engage in meaningful and productive conversations about brands. The goal isn’t compromise—it’s collaboration.

From my experience, a shared governance approach that spans clinical requests to clinical evidence reviews all the way through enforcement of decisions can be beneficial to all and avoid unnecessary conflicts.

Collaborative Responsibility

When executed correctly, the relationship between physicians and Supply Chain will tighten as technology and innovation accelerate. There will be an increased need for a balanced approach to clinical and non-clinical imperatives as emerging technologies can pave the way to higher value. As we focus on bringing in new innovations, we must be mindful of sunsetting similar, outdated materials. Supply Chain, through its inventory accounting, can be an important checkrein in this regard.

In the long-term, both sides of the enterprise ledger will be a shared responsibility. This is evident in today’s alternate payment and shared risk models of care delivery that have begun to take hold. With increasing integration and commitment to value-based models, enhancing patient outcomes while saving costs will undoubtedly drive physicians and Supply Chain closer together.

***Are you a physician? Or do you work in Supply Chain? Tell me your insights below—let’s start a conversation!

Up next: “Walking the Tightrope of Supply Chain Management—How to Add a Clinical Voice.”