What do physicians want?
Before materials managers can influence and manage (even
change) physician preference, they have to understand what motivates
them. Typically, it isn’t vendor-supplied free donuts or dinners,
"educational" trips to Bermuda or stipends for market research and
product testing. They have to explore clinical considerations, training
and risk, according to Goodroe.
"Changing preferences is extra work," she said. "Just as
hospitals align managers and administrative incentives with bonus plans
for extra work, hospitals must create incentives to motivate physicians
to change. Things that are important to the physician include improved
patient care, on-time starts for procedures, better trained staff, and
matters related to making it easy to practice at the hospital. Materials
management must connect their goals with the day-to-day clinical care of
the patient to succeed."
Yokl calls it functional analysis where materials
managers work to understand why physicians do what they do and why they
choose the products they do.
"When goals are aligned, physicians will take the lead
in decreasing costs," Goodroe said. "Materials management can serve as
the resource for products and costs, but physicians can determine the
appropriate changes that need to be made to assure patient care is not
compromised. Physicians are key in determining how to make changes to
patient care. [Materials managers] should communicate that they
understand this, and ask how the organization can work with physicians
to make changes that will maintain or improve care, while cutting
costs."
As a result, materials managers fill a new role of
coach, consultant, facilitator and trainer of the multi-disciplinary
teams directed by the physicians themselves, according to Yokl.
"Materials management needs to make the business case to
the physicians," McGinnity said. "The CEO needs to be there when this
message is presented. The message needs to be ‘all vendors can play if
they meet our financial and clinical needs.’ In any event, ‘forcing’
physicians to change their vendors – if you don’t persuade the
physicians that they need to decide to change – is never going to be a
popular approach and will result in a backlash of some kind."
The data dilemma
One familiar refrain oft repeated for persuading
surgeons about their product preferences is to show them the data,
usually adapting Cuba Gooding Jr.’s famous line in the "Jerry Maguire"
film and channeling his vocal delivery. But is showing them the costs of
the products they use enough?
"Some physicians do understand – they make it their
business to – the costs of products they are choosing and many do not,"
McGinnity said. "In many cases, the hospital doesn’t provide the
purchase costs information to the physicians so how would they know? The
hospital is the actual purchaser, privy to the direct negotiations and
ultimate signed contracts. So the hospital holds the only accurate
picture of this information – it is up to them to share it with
physicians."
What helps is sharing the right data, according to
Barrow. "In truth, most hospitals are not reviewing the right data to
fully understand the impact of physician preference items on their
bottom line," she said. "Most hospital financial leaders have data
showing charges vs. reimbursement, but the real issue is cost vs.
reimbursement. Device costs for total joints and cardiology represent
the single largest expense for the corresponding DRGs for total joints,
pacemakers and internal defibrillators – 51 percent-72 percent."
But a facility has to know what their actual costs are
and how each physician contributes to those costs.
It’s true that physicians don’t have ready access to
cost data. In addition, actual product cost, especially for preference
items, can be hard to determine," Goodroe said. "Physicians don’t need
to know the cost to deliver excellent care, so they don’t usually ask.
That said, hospitals themselves sometimes don’t know the true costs of
the products they use.
"Furthermore, many hospitals and physicians do not
understand how their utilization of products compares to the utilization
of these same products by other hospitals. Price is only one aspect of
cost. You also need to also look at use. We’ve developed technology
platforms that enable hospitals and physicians to capture not only
supply costs but also quality, productivity and utilization data that
can also be compared with national data to establish best practice
standards."
As more hospitals raise their physicians’ awareness on
high-ticket purchases many are amazed at the costs of the products,
services and technologies they are using, Yokl indicated.
Rudomin concurred. "Most physicians have no clue what
their supplies cost and many are stunned when they find out how
expensive some of these items are," he said. "Share the data, present
some options along with the impact of compliance, and allow a process to
take place. If possible, get the chief of that service or another
recognized physician leader to be an ally in this process. In the end,
even if the materials manager has not been successful he/she can always
document the cost impact of the options selected – or refused – and
report that information appropriately to his/her boss. By so doing, the
materials manager has ensured that senior management will at least know
the cost of this decision."
The data divide
Physicians may be scientists who understand data but
what kind of data truly influences their product preferences and
purchasing patterns to the point that change is acceptable? National
benchmarks and statistics? Comparisons with direct and/or indirect
competitors? Colleagues and peers within an individual facility,
department or service line?
"No one piece of data is the magic bullet for all
cases," McGinnity noted. "It is usually a combination that works – each
client is different, the politics and pressure points of each medical
staff are different, and physician-vendor relationships that will be
amplified in the data are different. Having said that, external
benchmarking usually carries more weight as long as it is comprehensive
and credible."
Internal data on utilization, along with external best
practice and reimbursement data may be a more effective combination,
according to Yokl and Barrow.
"Our experience has been that physicians will only
change when they are being presented with their peer’s data, not
national data, because national data has too many variables to be
believed," Yokl said. "But, on the other hand, if their peers are
following a best practice that your physicians aren’t, that gets their
attention and positive change usually follows."
Barrow favors internal data, too. "It leaves no room for
physicians to argue that their patients or environment are different
than the national average," she said. "In terms of what data to collect,
cost vs. reimbursement across facilities (if an IDN is doing the
project), physicians and suppliers is the most compelling. It gives a
true picture of how much the hospital is making – or losing – on each
procedure and the extent of variance between physicians and suppliers."
Goodroe offered some examples of what to use and what to
skip. "A single vessel with no acute MI and no previous procedure for a
stent patient is the level of comparison information needed," she said.
"Data from an ICD-9 or DRG level is not comparable for clinical
practices. Costs must be true acquisition costs. To benchmark
accurately, you must be dealing with data that is captured in an
identical manner."
According to Kowalski, the bottom line is that many
physicians need help to understand how much supplies cost and why that
is the case "because the physician is unaware of the rules of the game
of negotiation, and because the products chosen are frequently beyond
what the patient ‘needs.’"
Rudomin advised developing individual supply expense
profiles of each physician as compared to his or her peer group and
showing them privately.
"What I’d really like to see, however, is a system in
which every procedure is assessed relative to its revenue, cost and
quality so that an organization can strike whatever balance it feels is
most appropriate among these three critical issues," he added. "Any
materials manager who can help move such a process forward is truly
adding significant value, in my opinion."
