Integrating Physician Leadership into Supply Chain Management to Reduce Costs

As health care delivery evolves into a value-based model centered on patient outcomes metrics and reducing cost, physician leadership is increasingly required to guide processes needed to successfully achieve these new outcome metrics. Getting physicians more engaged in the health care supply chain is one way toward optimizing health care delivery based on the new outcome metrics.

“Integrating physician leadership into traditionally ‘non-clinical’ hospital entities, like supply chains, will help change the current paradigm of health care delivery into real population health management,” said Jimmy Y. Chung, MD, director, medical products, Providence Health & Services.

At the 10th Annual Health Care Supply Chain Management Summit, Dr Chung spoke on ways to engage physician leaders in improving the supply chain to deliver effective and high-quality care.

Saying that supply chain management is evolving into a patient-centered value-creating network that resets the supply chain metrics using patient outcomes and satisfaction, he emphasized using the supply chain as a strategic tool to maximize the value of health care delivery. To get physicians engaged in the supply chain, he emphasized the need for hospitals to be transparent with physicians and provide them with data that includes supply cost, total cost, revenue, quality, and outcomes metrics. 

“Physicians, especially surgeons, are naturally competitive both with each other and themselves, and generally react positively to data about their own performance,” he said. “When a physician sees his/her own data compared to others, he/she will be able to see a natural benchmark and set goals for improvement.”

To use the supply chain to optimize the patient experience, he emphasized the need for physician ownership of quality, outcomes, and resource management; building a clinical staff committed to best practice and evidence-based utilization; and aligning local administration leaders with organizational strategies. Underlying all of this is a cultural shift to do the right thing right, he said, and not be afraid to do it.

“Real health care reform requires cultural change at the provider level,” he said. “Physicians have to start thinking of the total patient experience across the entire care spectrum.”

In using the supply chain to maximize the value of health care delivery with a focus on patient outcomes metrics, he stressed the need to look at value analysis as a quality improvement strategy and not a cost reduction strategy. A value-analysis team would engage physicians as leaders and be clinically driven and evidence based. As such, physician-led value analysis will include clinical evidence and cost data, measure clinical and cost outcomes, translate language into clinical common goals (eg, high cost = access to care, variability = patient safety issues), use data to trigger competition, and leverage clinician demands for pricing.

The benefit of engaging physicians to lead value-analysis teams is highlighted by data showing that hospitals with physician-led value analysis teams tend to be associated with better supply chain performance, according to Dr Chung. Although 95% of hospitals have a value-analysis team, Dr Chung said that only 20% of these teams are led by physicians.—Mary Beth Nierengarten