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For the supply chain to work efficiently, physicians need to be involved in decision-making. But physicians must also be onboard with the strategy to take variation out of the system.
There needs to be a clinical integration of hospital processes to develop a standardized, physician-led supply chain, said Dr. Jimmy Chung, of Providence in Seattle. As associate vice president for the perioperative portfolio for Providence, Chung's role is to foster collaboration and integration across the 51-hospital system. He is the current chair-elect of AHRMM, the professional membership group for the healthcare supply chain.
Chung integrates physician leadership into supply chain standardization, using their specific cost and quality data analytics. It helps that he is a general surgeon who understands the independent nature of physicians who may not want to be told to use a different medical device than the one they've been using for years, in order to take variation, and cost, out of the system.
His job, Chung said, is to partner and communicate with physicians to allow them to feel they have skin in the game, as opposed to being a pawn in the hospital corporate structure.
One example is the standardization of laparoscopic devices, a category of staplers. Two companies dominate the market, Medtronic and Johnson & Johnson.
"I would guess that across the country the use is 50-50," Chung said. Within a hospital system, there can be the same split. But if a hospital gets a contract with one company, it's less expensive.
"There are efficiencies created by having a sole-source contract," Chung said.
While research may yield no quality difference between one device and another, a physician may argue very strongly against giving up his or her particular choice to make way for the sole-source contract.
"I still have to talk to physicians about changing from one device to another on a sole source contract," Chung said. "The value that we get is greater than any potential quality risk. We do this constantly. We have to look for ways to standardize certain procedures. We engage (physicians) ahead of time, so they know what to expect."
Another example is synthetic mesh for hernia repairs. There are four or five companies. After the choice was narrowed to two suppliers, half of the surgeons wanted one, half wanted another, and a smattering of others didn't care. There was no clinical-outcomes data to show one company was better than the other, Chung said.
"We establish that as the bottom line," Chung said. "It's the small number of physicians who complain. I think it has to do with change management really. People like change when it's exciting, fun and they have control over it."
It's important that physicians have some control over the supply chain process when they are already under stress due to administrative responsibilities such as the time required on EHRs.
"That takes them out of their main job to care for people," Chung said. "It is a big reason for burnout."
Physicians are being told they have to use these devices they're not familiar with, and they're not going to get paid for doing this work.
"It is demoralizing," Chung said. "While the rest of society respects you ... actually doing the work feels like you're having no control. That's the reason for burnout."
WHY THIS MATTERS
The root cause of the lack of integration is that physicians are trained professionals in providing care, valuing their autonomous role and the sacredness of the doctor-patient relationship. They may not understand their role in the overall picture of healthcare delivery, Chung said.
Getting to an efficient supply chain means getting rid of the "us against them" mentality that sometimes exists between physicians and hospital administration, Chung said.
The bottom line is that making this shared vision work also creates the best and safest experience for the patient. Reducing variation helps to reduce errors.
THE LARGER TREND
The pandemic brought to light the reliance on certain countries, such as China, for personal protection equipment. National disasters – such as Hurricane Maria, which devastated Puerto Rico in 2017 – also affected the supply chain, as 90% of the companies have manufacturing plants there, Chung said.
When COVID-19 created revenue challenges for hospitals, CEOs and CFOs went looking for cost reductions. Supply chain spend comes in second only to labor for hospital expenses.
"Variation causes waste and excessive cost," Chung said. "Most (hospitals) can cut costs 15-20% without affecting quality. What we're all under pressure to do is look for opportunities where there's waste."
This has been the strategy for decades, he said.
"Now it's much more of a focus," he said. "Every hospital wants to save money by making the supply chain more efficient. It just hasn't been easy. We always knew this was one way a hospital could save money. It hasn't been something hospitals have been willing to implement. It doesn't make surgeons happy."
The clinical integration model has been adopted by a number of large healthcare organizations across the country. What's needed is an investment in evidence tools and the creation of a physician role in the supply chain. The position of medical director of supply chain is becoming more common.
"You have to have a partnership," Chung said, "with shared goals and vision."
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