Becker's Hospital Review

39 EXECUTIVE BRIEFING 2 EXECUTIVE BRIEFING SPONSORED BY 6 negative effects of leaving physicians out of the supply chain By Dee Donatelli, RN, BSN, MBA, Senior Director, symplr Spend F rom fall 2020 to the present, the costs for some of the most critical elements (e.g., resins, cotton and metals) in the medical supplies and devices that hospitals and health systems use daily all soared in excess of 30 percent, in parallel with rising foundational costs like shipping freight and energy. Healthcare organizations' drug expenses spiked, too, until by the end of last year they were 28 percent higher than pre- pandemic levels. As a result, health systems are racing to find innovative ways to improve their bottom lines, and the stakes couldn't be higher amid the backdrop of clinician shortages and looming changes in reimbursement. One promising avenue for significant cost savings: The integration of clinical systems into supply chain processes. The role of physician engagement in spend has been top-of- mind for value analysis teams in particular as recent sourcing and margin crises have accelerated the need for cross-functional collaboration. However, the scope of physician involvement has often been limited to a single physician champion during a product review, rather than an integrated clinical approach. 1. A lack of data impedes decision making In operational models that don't integrate supply chain management within hospital clinical practices, buying decisions are largely divorced from the physicians, nurses, and other providers and staff who use them. For example, within these structures, physicians typically communicate with their supply chain function exclusively via product requests, with "product" defined as medical supplies or technologies. Once the product requests are fulfilled, however, there is a void of data. No information is collected about how, when, and why the products are used or how effective they are. This is a loss of key information necessary to inform business decisions. Specifically, a lack of data analytics that connects a health system's supply chain with the providers and staff who use the products means hospitals are missing opportunities for substantial cost savings and patient outcomes improvements. 2. Clinicians/staff stockpile and overuse medical products A lack of physician involvement in product purchasing can result in stockpiling and/or overutilization of certain medical products. A systematic review gauging physician awareness of medical device costs showed that only between 9 percent and 35 percent of physicians accurately estimated medical device costs — and 92 percent of physicians reported that they felt their knowledge of medical device costs was inadequate, with most participants in every study in the review (66 to 100 percent) stating that knowledge of medical device costs is at least moderately important. Such surprising statistics illustrate how detached many physicians are from the purchasing process and what a detrimental effect this disconnection can have. 3. Medical product spending increases The purchase of more unnecessary medical supplies and technologies not only diverts limited hospital funds away from valuable internal improvement projects but also potentially results in added spend because products with limited shelf lives must be disposed of and replenished. Although stockpiling results from the underuse of products, a lack of physician involvement and clinical integration can also result in overutilization. Physicians, unaware of the financial implications of purchasing certain medical products, might then use the products excessively, even in situations where the use doesn't translate to improved patient outcomes. As a result, a lack of standardization around product utilization is a substantial drain on hospitals' bottom lines and is a large area of improvement for some health systems. According to Definitive Healthcare, physician-preferred items (PPIs) make up 40 to 60 percent of a hospital's supply costs. However, through standardization and cross-collaboration, health systems have the potential to mitigate the excessive costs that stem from PPIs. 4. A lack of clinical advocacy negatively affects outcomes Evidence-based decision making relies on the clinical merits of a product. In addition to the cost and operational arguments, having physicians provide clinical reasoning up front keeps stakeholders on the same page and creates clinician ownership of new product requests. Similarly, ensuring data democratization across stakeholders is a key mechanism for prioritizing clinical outcomes and physician buy-in from the start. And because physicians often are not easily swayed by industry product information, health systems must operate with a set of objective clinical evidence.

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