The truth about physicians and the supply chain

Jimmy Chung, MD

Health care’s supply chain is at the nexus of cost, quality, and outcomes — the key drivers of value-based care. As providers increasingly adopt value-based principles, highly resilient, high-performing clinically integrated supply chains will be markers of sustainable success.

For many health systems, leveling up supply chain strategy will require transformation to eliminate variation and standardize processes around best practices. However, health care leaders who have historically walked a fine line between implementing operational improvements and keeping the peace with burned-out providers may be hesitant to rock the boat when it comes to physician preferences.

In today’s health care climate, however, this kind of balancing act is short-sighted. Approaching supply chain decisions in a way that solicits provider input while also considering the needs of patients and health systems creates efficiencies as well as a basis for quality and safety improvements. As both a physician and supply chain executive, I can say with confidence that there is a piece of conventional wisdom in health care that needs to be turned on its head: It’s the notion that physicians are stuck in their ways and unwilling to change.

When incentivized correctly, physicians are open to change, but it takes the right approach. That’s why health systems are smart to consider supply chain disruption and even smarter to bring physicians into this process early to champion change. There are three tactics operational leaders should consider when bringing physicians to the supply chain table to lay a foundation that will ultimately benefit all parties — the provider, the patient and the bottom line.

1. Lead with clinical quality to identify opportunities for standardization

Physicians are much more likely to get on board with supply chain transformation when they are confident that a health system is putting patients first. The reality is that economics are naturally optimized and “value” is achieved when the best clinical care produces the best patient outcomes. By collaborating with physicians, supply chain leaders can analyze all the leading measures for a particular product to determine where variation should be eliminated and which vendor relationships to strengthen.

For example, certain conditions within the global period of an episode of care such as preventable complications and readmissions may not be reimbursed by payers. In addition, they lengthen the patient’s stay and increase the overall cost burden to the hospital. Supply chain decisions that prevent hospital acquired conditions (HACs)—such as infections, falls, pressure ulcers and venous thromboses—and reduce the risk of readmissions can create additional value to both patients and hospitals. In another example, allowing the use of multiple suppliers for some products such as surgical mesh, coronary stents, cardiac rhythm devices and certain orthopedic implants can create unnecessary variations in procedural processes and increase the risk of errors without adding any additional benefit to patients. Standardizing to local and/or benchmarked best practices can reduce the risk of errors and lower costs. These quality improvement initiatives can often be good opportunities to create strategic partnerships with suppliers.

2. Connect the dots between high-reliability health care and patient loyalty

Supply chain is not a topic that typically comes up in patient experience discussions, but it should. Patients are the ultimate “customers” of any health system, and it’s important to get physicians on board with this framing and the concept of high reliability in health care. Yet putting patients first means traditional individual physician autonomy and preferences need to go away — not an easy sell with physicians.

Many industries — airlines, military, public utilities and even food safety for example — have fine-tuned Six Sigma models as a foundation for high reliability to ensure highest quality and safety for its teams and customers. Applying this concept to supply chain in health care means reducing waste and variability so that the patient experiences fewer errors and better quality of care while health care organizations realize financial benefits.

For example, principles of high reliability are applied in numerous industries to ensure a consistent experience and quality for their customers. Patients deserve the same level of assurance of safety and quality in health care. If a patient needs to schedule a surgery, the quality of care and outcomes can vary significantly depending on the surgeon. In contrast, for someone scheduling a flight, their safety doesn’t usually depend on the pilot. When was the last time anyone Googled the pilot to see what pilot school they went to before stepping on a plane? Health care today in the US has an unacceptable rate of deaths due to preventable errors. If the airline industry had the same rate of errors, there would be 450 airplane crashes every day.

3. Use data to bolster collaboration

The anticipated growth trajectory of the value-based care market — potentially up to $1 trillion — is substantial. As health systems increasingly shift into value-based models in supply chain, data to support physician collaboration and actionable insights become critical to success. Value-based care means hospitals and physicians are reimbursed based on patient outcomes and quality of care, not volume.

Supply chain leaders who use data and AI to help make the best clinically integrated decisions about supply chain will come out on top in the “value” race. Engaging physicians in these decisions can connect supply decisions to patient outcomes data. And while there is hesitancy around using AI in health care, supply chain is one area where it can have a practical impact.

For example, AI can help select products that are safe and of the highest quality. In addition, health systems can minimize waste through simple algorithms and questions such as: What drugs should we stock up on to safeguard against shortages? What products do we need for certain types of patients and disease states? Which physicians in our system are using products most efficiently with the best outcomes?

Supply chain collaboration improves patient and clinician experiences

The relationship between both patient and clinician experience and a resilient supply chain has been well-established. Supply chain gaps can negatively impact clinical outcomes and contribute to the ongoing clinician burnout epidemic.

When supply chain leaders and physicians collaborate around high reliability, health systems can better achieve goals around access to the right drug or clinical supplies, at the right time and at the right cost. That's why forward-thinking health systems that prioritize partnerships between clinicians and supply chain and make high reliability central to their supply chain strategy will be best positioned for future success.

Jimmy Chung, MD, is chief medical officer at Advantus Health Partners, a health care solutions company that makes supply chain easier for its clients through streamlined supply chain management, organizational purchasing, operations and cost-savings efficiencies.