Many folks within and outside the healthcare supply chain industry suggest it’s five to ten years behind other industries. Although this may be the case, other industries don’t face some of the challenges we face, such as a limited supplier base for products, customers who don’t pay for the services (although with rising co-pays and deductibles, this is changing) or have to cope with non-employees that have a significant impact on revenue streams and costs as physicians do in our industry.
Working with physicians on reducing supply and purchased services expenses can be very challenging unless you work in a physician-owned organization where priorities can be different. I offer some tips that have helped me over the years in working with physicians:
Strategy Engagement: Most physicians want to be involved in the solution to a problem, versus being told how a problem is being solved. Hold a meeting and present a problem, asking for their help in how to solve it versus being too prescriptive. For example, we held a meeting with our key orthopedic surgeons, certain that we were going to move toward a two-supplier solution to meet our savings goals. When we presented the savings target, they indicated they would press all of our suppliers to meet a cap price to attain what we needed if we did not restrict access and they were successful in doing so. Two years later, however, we did get down to two suppliers as our savings goals were raised.
Build a Relationship: If you have a difficult physician that isn’t interested in working with you, try taking them to lunch or dinner. Build a relationship. This is the tactic that most supplier representatives use. At one organization, we built ad-hoc teams of physicians for specific product categories. We held two-day meetings in New York City with these physician teams to discuss cost reduction strategies and invited their spouses to come along (all activities were approved by Corporate Compliance). This resulted in building needed, long-term relationships that resulted in saving millions of dollars in supply expense.
Create Competition: Create a scorecard on supply usage and cost per case. Share these scorecards with the physicians, including quality and outcome measures. Please note that it’s important to meet one-on-one with high-cost physicians to share with them why their costs are high. Once, we met with a physician indicating he was using two $1,600 cages for each procedure when no other surgeon in the system was doing so for the same procedure. He was belligerent during the meeting, but never used those cages on that procedure again.
Share the Savings: Many physicians will ask “what’s in it for me?” and generally, a better parking spot or monogrammed scrubs won’t cut it. Start with a specific initiative and get executive approval to share part of the savings generated on a physician or group of physician’s pet program or initiative that hasn’t been fully funded. This can be a piece of equipment, research project or education program. We launched an entire Shared Savings Program that was so successful, we had physicians coming to us with savings ideas and commitment to support those initiatives for a piece of the pie (again, all approved by Corporate Compliance).
Educate: Many physicians are receptive to and appreciative of efforts made to let them know the costs of certain supplies and purchased services, especially if these costs are a significant percentage of the overall procedure costs. We had the opportunity to present at a Physician Leadership Academy, which is a group of physicians selected as potential leaders within the organization. We played a guessing game during our presentation as to the cost of various products and very few got close. As a result, they paid close attention to the rest of the presentation. We were planting a seed with future physician leaders which I am sure will pay off, if not in the immediate future, certainly down the road.
I am sure there are many additional physician engagement tactics that could be shared, but I hope these help at least a few of you.
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