From Healthcare Purchasing News, June 19, 2019
By Rick Dana Barlow
Four doctors promote how they bridge any divides between Supply Chain and Medical staff, teams
As healthcare economics and reform continue to tighten the grip on decision-making authority and autonomy physicians and surgeons have experienced and enjoyed for decades, doctor reactions have been swift and varied.
Within the last few years traditional consumer and trade media — as well as social media — has posted, aired and published tales of doctors burning out, selling out (to group practices, hospitals or healthcare systems) or simply getting out of practicing medicine altogether, due in large part to intensifying pressure from three key culprits: Declining reimbursement, increasing malpractice fees and claims, and shifting market referrals from payer-oriented managed care drivers.
Those who remain in the profession, however, whether employed or privileged to practice, increasingly are embracing a curious alternative to the fading status quo: Working directly with Supply Chain.
As Healthcare Purchasing News recognized the emerging and growing participation by genuinely engaged physicians and surgeons in the supply chain process it decided to identify and salute those key clinicians truly making a difference by presenting them with its annual P.U.R.E. award and profiling their points of view. P.U.R.E. signifies Physicians Understanding, Respecting and Engaging Supply Chain professionals. HPN bestows its P.U.R.E. award on those physicians and surgeons who have made solid contributions to supply chain operations — activities, practices and thinking. HPN designed it to further solidify and strengthen the clinical bonds between physicians and supply chain professionals.
Last year HPN selected three physicians to receive the third annual P.U.R.E. award. This year four more join their ranks, selected from noteworthy nominations submitted to HPN.
HPN’s 2019 Supply Chain-Focused physicians are: Ronald M. Benoit, MD, Associate Professor of Urology, University of Pittsburgh School of Medicine, and Director of General Urology, UPMC, Pittsburgh; John Cherf, MD, MPH, MBA, Chief Medical Officer, Lumere Inc., and former Chief of Orthopedics, Advocate Illinois Masonic Medical Center, Chicago; Patrick A. Kenney, MD, MPH, MBA, Assistant Professor of Urology, Yale School of Medicine, Clinical Vice Chair, Yale Medicine Urology, and Medical Director, Supply Chain, Yale New Haven Health, New Haven, CT; and John M. Mohart, MD, Vice President, Cardiovascular Care Performance Acceleration, Mercy, St. Louis.
Benoit recognizes the “extremely delicate task” Supply Chain teams have when trying to work with doctors to manage physician preference items. Supply Chain simply needs a physician champion to nurture trusted relationships, foster transparency and promote a team-based culture with the physicians, according to Benoit. So that’s what he volunteered to do in leading the value analysis team back in May 2016. Under his leadership and physician coaching, UPMC has generated hundreds of thousands of dollars in savings from removing high-cost, clinically equivalent items, tracking disposable product expenses and overall case costs.
Having earned an MBA, Cherf recognized several decades ago the importance and value of optimizing supply costs in a private practice environment, which he helped expand into a fully integrated musculoskeletal center offering a variety of services. He also helped set up two ambulatory surgery centers that “required meticulous attention to supply costs.” At mid-career, Cherf helped found the orthopedic department at a private orthopedic surgery/neurosurgery specialty hospital in Chicago that involved working with administration and Supply Chain to control costs. Before joining Lumere where he worked with hospital and health system clients to manage PPI and reduce costly clinical practice variation, he served as Chief of Orthopedics at Advocate Illinois Masonic Medical Center where he collaborated with Supply Chain and helped evaluate and introduce new technology into the Advocate Health Care system.
As part of Yale New Haven’s Corporate Supply Chain leadership team, Kenney reinforces the ongoing aim of improving clinical value by clinically integrating supply chain decision-making through value analysis for supply and service consumption. Through the Northeast Purchasing Coalition, a Vizient Member Business Venture comprising 19 members representing more than 100 acute care facilities across nine states generating $4.7 billion in annual purchasing volume, Kenney has fostered and maintained a system driven by regional clinician and physician input on clinical practices and product and service sourcing decisions. He and his team promote evidence-based decision-making related to supply and service selection and use. Kenney also is developing a national forum for Clinical Supply Integration Practice Sharing.
Mohart may be a Mercy-employed cardiovascular executive and cardiologist affiliated with multiple hospitals within the St. Louis metropolitan area, but he actually began his career as a CPA with the accounting and consulting firm Ernst & Young for nine years before switching to medicine. Mohart’s business background reinforces his clinical experience, which enabled him to meld a diverse group of physicians within the Mercy system to unify when evaluating products, protocols and services through a lens of fiscal responsibility, clinical quality and patient outcomes. His leadership efforts, for example, helped Mercy reduce CV product spending (including cardiac stents, balloons and implantable rhythm devices) by $10 million annually during the last two years. He also established a district council to focus on quality and outcomes, a ministry-wide CV summit three months ago to share best practices and strategic direction among facilities, and an electronic risk calculator for pre-cardiac surgery in which doctors can discuss with patients treatment options and protocols and determine together how to proceed.
HPN’s traditional wide-ranging interview explored how all four recognized the need for and value of supply chain strategies and tactics as an integral component of effective and efficient patient care and a critical contributor to optimal outcomes.
JOHN CHERF, MD, MPH, MBA
Chief Medical Officer, Lumere
Former Chief of Orthopedics, Advocate Illinois Masonic Medical Center
CHERF IN REAL LIFE
Unlikely source of inspiration: Not accepting or adopting the latest trend in healthcare (largely driven by stubbornness and luck).
Most creative thing he’s ever done: Professionally, building a fully integrated orthopedic institute in the early 1990s — way before this became popular. And going to business school. Personally, marrying my wife.
What makes him laugh: People making fun of themselves.
Best and worst advice someone ever gave him: Best: Founding a surgery center; Worst: Founding a specialty hospital.
Favorite objects he keeps in his office: Trout Unlimited and Pheasants Forever calendars — Great outdoor photos that provide inspiration to balance work with favorite hobbies. Photos of my family — reminds me of what is most important.
What he would tell himself if he traveled back in time to when he just started in healthcare: Think long-term rather than short-term.
HPN: Why do you feel it has been — and in spots still is — so difficult for physicians and surgeons to become more directly involved in supply chain issues? What are some of the challenges that doctors may have with Supply Chain (the department) that makes them so resistant to Supply Chain advice and recommendations?
CHERF: Many physicians and surgeons (physicians) are challenged running their own practices. Overwhelming demands for practicing medicine include government and payer compliance requirements, EHR, contracting, decreased reimbursement, etc. It is difficult for physicians to take on another responsibility that does not directly impact their workload, such as supply chain. Supply chain activities are also not part of most physicians training and are not a typical physician core competency.
Physicians rarely ask hospital administration to help control costs in their practices, and it is unclear if hospitals would deploy resources to help physician practices. We shouldn’t be surprised that physicians do not welcome the opportunity to contribute to supply chain activities in many settings. However, hospital employment of physicians and new payment models, such as bundled payments, are incentivizing physicians to spend more time managing traditional hospital costs and they take on more longitudinal financial risk.
Let’s reflect on the how, when and why you decided to get involved with supply chain issues? What motivated your interest?
One of the irrational expense problems I see in healthcare involves supply chain materials. The price discrimination we see in the global market is extreme with the U.S. paying some of the highest prices in the world. This occurs at a time when the cost of care is the single most important problem with our healthcare system. Many supply prices have increased much faster than inflation and substantially faster than physician reimbursement. This disconnect motivated me to learn more and participate in supply chain activities.
One major sticking point between Supply Chain and physicians has been product brand preference. Why do you believe physicians are so reluctant to change product brands if/when necessary?
Many physicians become entrenched with a particular device and manufacturer. This creates “stickiness” between the product and often the sales representative. The manufacturer also helps physicians with education and procedural support. The “switching costs” of changing brands can be significant. Physicians are often up on the learning curve for using a particular device. This may be a product of their training. There is also an established relationship with the rep and an overall comfort level for the physician. Giving this up can be difficult. Changing brands and devices may also adversely impact clinical outcomes as a physician moves up the learning curve with a new device. It is important to remember the physician is the stakeholder most responsible for outcomes and liable for sub-optimal results. This often leads to a high threshold for physicians to change brands and devices.
Where do you see the physician’s/surgeon’s relationship with Supply Chain heading long-term?
As we transition to more overall integration between providers and increasing financial pressure to provide value-based care, physicians will likely have a greater role in supply chain activities. This will be driven by new payment models and the need to document value with optimal quality and cost to be competitive in a consumer driven market. Our conversation with physician involvement with supply chain will be very different in five and 10 years. We should expect much more physician involvement in supply chain activities and more published research in physician literature about cost of care, clinical variation and value.
How does having a physician or surgeon on the Supply Chain staff — or even leading the department — affect the dynamic between the two areas as well as the fiscal health of the organization?
Having a physician at the supply chain table is very important and extremely valuable. Physicians can provide sound clinical input to help drive supply chain efficiency. Forward-thinking organizations are integrating physicians in value analysis, clinical efficiency and other supply chain-related activities.
Dr. Cherf, as an orthopedic surgeon and clinical leader with an MBA, what do you feel is the biggest stumbling block Supply Chain has with orthopedic surgeons or even the weakest link that prevents them from working together and how might that be overcome?
I see two major stumbling blocks: Supply Chain staffs are territorial and may be intimidated by working with physicians. Ironically, the Supply Chain team knows significantly more than physicians about purchasing, inventory management, etc. The converse is true about clinical knowledge as physicians know more than the Supply Chain team. The two parties complement each other and are stronger working together rather than independently. The key is creating incentives for collaboration.
Read the interviews with other award winners from the original article on Healthcare Purchasing News here.