Pathways to Clinical and Supply Chain Standardization


Tue Mar 29 13:00:31 CDT 2016

In today’s accountable healthcare environment, where strategic sourcing influences patient outcomes, clinicians and supply chain managers are working more closely than ever to provide safe, effective and cost efficient healthcare.

The 2013 Deloitte Survey of U.S. Physicians revealed that:

Six in 10 physicians rank doctors as having the greatest influence on medical technology purchasing decisions. Half of physicians believe that when purchasing medical technology, safety, efficacy and reduction in instances of needed care are top considerations Seven in 10 physicians believe that physician-led peer review and evidence based guidelines are leading best practices when selecting and purchasing medical technologies.

Meanwhile, The Advisory Board Company’s recent study proposes that hospitals evolve their supply chain strategy to include:

  1. Negotiating on Total Value by broadening negotiating levers and value indicators with more comprehensive product evaluation strategies, moving beyond volume-for-price trading to consider total cost incurred over time and impact on end-user satisfaction.

  2. Ensuring Data Transparency - extracting value through the post-contract period by leveraging physician supply utilization data with suppliers to demonstrate contract commitment.

  3. Capturing Shared Value with Suppliers - A fully realized sourcing strategy lays the groundwork to explore longer-term strategic partnerships with suppliers. Progressive institutions are working with key suppliers to reduce mutual costs, realize collaborative efficiencies, and achieve better outcomes.

[Next-Generation Supply Cost Savings: How Hospitals Are Remaking Partnerships with Suppliers and Physicians to Achieve Sustainable Value, The Advisory Board Company, 2013]

To effectively serve patients while managing costs, clinicians and supply chain managers at hospital networks, IDNs and GPOs across the country are drawing expertise from across their organizations in evaluating and purchasing products. To learn how, we recently spoke with Dr. John Gillean, Executive Vice President and Chief Clinical Officer and Sandy Wise, Director, Contracting and Resource Utilization, both at CHRISTUS Health Pierre Theodore, M.D., lung transplant surgeon and assistant professor of surgery, University of California San Francisco Medical Center

What does the term “clinical integration” mean to you?

Pierre Theodore, M.D. UCSF Medical Center: Clinical and supply standardization is the phrase that clinicians use. You leverage purchasing power by trying to limit numbers and reduce price points. In end, it comes down to reducing the number of vendors while maintaining quality and achieving consistent clinical results.

I think that the concept of standardization is inherent in process of increasing safety in the medical center. Using an airline procedures analogy, standardization means having fewer places for human error and achieving better quality. In a hospital environment, we can deliver quality by reducing the systems errors that are caused by non-standardized procedures.

How are you defining clinician interactions within each of your networks’ supply chains?

John Gillean, CHRISTUS Health: In re-structuring our supply chain, we’re engaging our entire clinical enterprise – our 200 internal physicians and 8,000 affiliated medical professionals – in managing outcomes by understanding the implications of our choices.

Sandy Wise, CHRISTUS Health: The eyes and ears of our clinicians are important to ensuring safe outcomes, which is our top priority. We engage area-specific resource groups, including directors of surgery. We develop strategies and determine what aspects of each product are evaluated from both clinical and utilization perspectives. At the end of the process, we take a vote. This process helps smooth both conversion and implementation.

Pierre Theodore, M.D. UCSF Medical Center: Large capital purchases or large volume disposable purchases are areas that require a collective approach. UCSF has a multidisciplinary committee that makes decisions on how we assess new high technology products. It works similar to a legal trial: A plaintiff (the product champion) who supports acquisition of the new product makes their best argument of why it should be adopted over other products on the market. A committee panel, playing the role of opposing council, presents their arguments on why the product should not be acquired. A third component of the decision is an economic analysis. An administrator looks at variance of cost between the current and new product, and determines if costs can be rationalized through other methods such as bundling.

After the pros, the cons and the financial analyses have been presented, the committee reaches a verdict on whether the product should be tested within the hospital. After a five to six month trial period, the product’s clinical champion will again return to the committee to make case why the product is better.

Can you provide any examples of these interactions?

John Gillean, CHRISTUS Health: We recently finished a project to evaluate orthopedic implant and joint replacement suppliers. With the goal of obtaining regional and system-wide agreements, our C-suite executives and surgeons worked together to create an even playing field while maintaining several suppliers in this category.

In another example, we’re moving towards a sole supplier agreement for IV pumps based on the recommendations from nurses across the system. While a sole source agreement was not our original intent, the expertise of our nurses – who understand the considerations of providing bedside support – was a big part of this decision.

Can you provide examples of how you have been able to work with physicians and suppliers to standardize equipment/devices without compromising quality patient outcomes?

Pierre Theodore, M.D. UCSF Medical Center: UCSF went through a process of considering our choices for staplers offered by a variety of vendors. This resulted in heated discussions over a few months: Which stapler? Which stapler load? What do we get rid of? For us, standardization came through working with one vendor to get the best stapler of choice at the best price point available.

Sandy Wise, CHRISTUS Health: What we do in the OR extends to the entire CHRISTUS network. Rather than focusing on price, we’re looking at smart utilization to reduce costs. We work with suppliers to understand not only the procedures their products are used in, but also how often they are used. If we source just one of type of a specific device, rather than three, we can reduce the number of SKUs across the board.

What do you expect/require of equipment/device manufacturers in your selection of new products?

Sandy Wise, CHRISTUS Heath: It depends on the product, as each has specific requirements. The bottom line is that we will not sacrifice quality. Our selections are based on clinical efficacy, evidence based outcomes, issue resolution procedures, specific service requirements in contract language and quarterly reviews on both sides.

Pierre Theodore, M.D. UCSF Medical Center: I think that it’s not a question about whether one supplier’s device is less or more expensive. Successful suppliers come armed with the data relating to the benefits of their new product. They have set up a system to acquire data during the product’s clinical trial phase to help make their case. Successful suppliers help us get to the end point in our hospital’s internal trials so we can get that Information in front of the committee.

In your evaluation of equipment and devices, how do CHRISTUS’ medical experts balance/reconcile product efficacy, cost savings and patient outcomes?

Sandy Wise, CHRISTUS Health: We really look at the total cost and not just the price of product. We’re not going to pursue a new product unless it demonstrates clinical superiority. Is it worth going through a conversion? Is there a financial proposition? What are the clinical benefits of making a transition?

Do you provide your staff with any unique tools or training in order to provide a thorough evaluation?

Sandy Wise, CHRISTUS Health: We are in the process of developing a standard tool to guide clinicians to implement product transitions. The tool will allow doctors and nurses to use consistent, objective and evidence-based guidelines as well as document their input during the transition process.

Pierre Theodore, M.D., UCSF Medical Center: What we’re aiming to create is a very simple web based template, an evaluation system that’s specific for certain product trials at UCSF. The system would make it very easy for every person who touches the product to provide input on its usage. At the end of the internal trial period, the data is already correlated and easy to present to the committee.

What practices have been working well to evaluate and purchase physician preference items?

John Gillean, CHRISTUS Health: In orthopedics, we’ve engaged physicians in a broad GPO process to come up with single device supply arrangements. We’ve been in that process for number of years. We’re now looking at items such stents and cardio devices. We’re taking a hard look at utilization; our physicians know over time that there will be fewer contracts.

Pierre Theodore, M.D., UCSF Medical Center: I do think that having a well-designed new products committee gives us a forum for discussion so that someone doesn’t just show up to a hospital without a vetting system. It helps with planning. It’s important to develop a culture where people say that in the name of standardization, they are willing to change their practices and be flexible in their demands to become consistent, adhere to a standard and gain consistent, quality outcomes.

How are you improving collaboration with suppliers?

Sandy Wise, CHRISTUS Health: Ed Hardin (System Vice President of Supply Chain Management at CHRISTUS) began a Partner Advisory Committee that meets quarterly. This gives our suppliers the opportunity to learn about CHRISTUS and how we work with them. We’ve interviewed suppliers that could potentially collaborate to serve our network. He’s also formed a multi-disciplinary strategic advisory committee of physicians, CMOs and supply chain leaders that meet quarterly to review goals, actions and opportunities in our supply chain.

Pierre Theodore, M.D., UCSF Medical Center: It’s very helpful to have the supplier’s specific input on what their product’s value proposition really is based on their knowledge of the hospital’s goals. This input can help clinicians on the evaluation committee — who enter meetings with generalized data about the product from the hospital — make a fully-informed and well rounded decision.