Supply Chain Management, What’s in It for Me?  What Physicians Gain from Supporting Supply Chain Teams

But effective supply chain performance directly links to patient outcomes and clinical safety influencing much more than PPE. Prior to COVID, many physician leaders recognized the value of supply chain excellence. More need to appreciate the value they gain from it.

Most physicians will relate to the comment, “Until COVID I never thought about the importance of Supply Chain Management (SCM)”. Why should they? SCM is the back-office business process ensuring that all the right products get to the point of use at the right time. But effective supply chain performance directly links to patient outcomes and clinical safety influencing much more than PPE. Prior to COVID, many physician leaders recognized the value of supply chain excellence. More need to appreciate the value they gain from it.


The devices and supplies used by physicians are the tools of the profession. Choosing which product to use can have a direct impact on patient care as well as a healthcare system’s financial viability. Consequently, this topic has gained importance in both hospital and outpatient care settings and across specialties.


Getting involved in product sourcing is often one of the last things that a physician would choose to do. Clearly most just want to conduct their clinical practice with the best medical devices and supplies. In today’s world it is no longer that simple. Value based practice and reimbursement enhances the incentives for physician participation. Difficult decisions with multiple clinical and administrative staff are needed. And that takes more focus and time.


In the past product sourcing and selection decisions were made by administrators with relatively minor input from physicians. This was possible because every physician had precisely specified which products they wanted to use. Administrators simply carried out the physicians’ requests. Consequently, in a hospital with 1,000 physicians, there could be more than 1,000 lists of specific products for physicians. These lists are called Physician Preference Lists comprised of Physician Preference Items (PPI). Historically product selection by each physician establishing their unique PPI was subject to few limitations.


PPI represents a sizeable share of the medical supply spend. Consequently, it is a lucrative area for reducing costs within a health system. But more than financial matters, standardizing on an array of products can increase clinical quality.


The decision to choose one equivalent product over another is complex. It involves weighing multiple factors involving clinical practice efficacy and financial. It also involves the participation of a diverse set of decision-makers who do not frequently work together (e.g., physicians, supply chain managers, budget managers, etc.). Such decisions are typically made by Value Analysis teams within the hospital or across a regional system. Decision makers from within clinical specialties and administrators carefully review the situation to select a standardized product. Due to the great importance of the decisions arising from this process, careful, objective, and unbiased consideration needs to be given.


Without active participation in the Value Analysis process by physicians, decisions directly affecting their ability to practice will be made without them. No physician wants this to happen. However, despite huge demands for their time, it is a challenge and a necessary evil for physicians to take the time to participate.


On the positive side, with active participation of a representative sample of physicians, these important clinical decisions can be made efficiently and effectively. Some physicians have found great value in their engagement with supply chain – as they have found that their practice-based opinions and science grounding has brought value to both patients and the organizations in which they practice. However, the benefit to all physicians can be powerful.

  • In the course of practice, physicians will benefit from:
    • Access to the best products chosen through consideration of clinical effectiveness research
    • Opportunities to advance their knowledge and advocate for innovation through improved value-analysis processes
    • Greater transparency into how decisions are made and the outcomes
    • Improved service by clinical and supply chain staff
    • Improved service by highly incentivized suppliers
    • Reduced pressure by internal and external forces to cut costs
  • In the course of practice, patients will benefit from:
    • Better outcomes
    • Reduced length of stay and associated hospital acquired infections
    • Reduced complications associated with best-of-breed supply utilization
  • Financially, physicians participating in risk and gainsharing programs will benefit from:
    • Reduced length of stay
    • Lower costs associated with readmissions and revision surgery
    • Reduced costs of supplies

If these benefits mean something to you, then you will understand that individual physicians and physicians as a group gain value from supporting supply chain teams. Are you ready to provide support? Are you ready to learn more about supply chain management?

Eugene Schneller is Co-Founder of Healthcare Supply Chain eXcellence and a Professor at Arizona State University.
gene.schneller@hscxi.com

Jim Eckler is Co-Founder of Healthcare Supply Chain eXcellence and a former health system supply chain leader.
jim.eckler@hscxi.com

 

 

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