Supplies are often a large element of a surgery center's budget and one of the easiest areas to save money without sacrificing quality. A center's physicians can have an impact on the cost of supplies, though they might need some convincing to get involved.
"By virtue of their leading role in healthcare delivery, physicians are in a great position to influence the supply chain," says Richard Peters, senior director of ASC services at Provista, a supply chain improvement company. "Their selection and utilization of the products used in the surgical suite are often major driving factors of supply costs."
But physicians are not such an easy sell when it comes to getting involved in the supply chain, says Alan B. Kravitz, MD, a general surgeon and investor at Montgomery Surgery Center in Rockville, Md., and an advisor for Surgical Care Affiliates' supply chain team. Dr. Kravitz and Mr. Peters discuss five points on physician involvement in supply chain management.
1. Surgeons are trained not to care about cost. Dr. Kravitz says that surgeons are not sensitive to cost simply because they were never trained to think about the cost of their supplies.
"Surgeons are not very intuitive to cost, because we don't care," says Dr. Kravitz. "We've all gone through residencies in hospitals where we get what we want when we want it. Very often, hospitals are able to pass the cost on to someone else. Surgeons are fairly apathetic as to how much things cost."
2. Educate surgeons and appeal to their competitive nature. Dr. Kravitz says even though surgeons were not trained to think about costs, if they are educated on the cost of their supplies and procedures, they can be persuaded to start thinking more about the cost of what they do. Mr. Peters says giving physicians insight into the financial impact of their supplies can push them to get involved.
"Even if they don't have a financial stake in the organization, most physicians like to be considered in important decisions, and savings from the supply chain can lead to enhancements that surgeons value," says Mr. Peters.
When looking at physician involvement, there is no substitute for a conversation, he says.
"Administrators should plan to meet with active surgeons in the center at least quarterly to review overall performance, to ensure that the surgeon's needs are being met, to identify and resolve any concerns about scheduling or staffing and to discuss issues such as supply utilization that might not come up in routine work conversations," says Mr. Peters. "In addition, periodic review of preference cards, case costing and waste should be a natural time to discuss supply utilization."
Analyzing cost per procedure for each surgeon is one way to start the conversation about cost. If one surgeon's costs are higher than his or her peers, that can be the starting point for a conversation and eventual change.
"Physicians are highly competitive by nature, and very responsive to data," says Mr. Peters. "For example, if you have a surgeon whose case costs are out of line relative to peers or to reimbursement for a certain procedure, providing them blinded data comparing their costs to their peers or data on reimbursement relative to costs can be a strong motivator to change their behavior."
3. Encourage surgeon agreement on low-cost products. It's not just the high-cost items that increase supply costs, Mr. Peters says.
"While high-cost items like implants might come most immediately to mind on this topic, the notion of physician preference can even extend to things most people regard as a commodity, like gloves," he says. "If you have two surgeons that each prefer a different brand of surgical glove, you'll have to have twice as many total gloves in stock than if they can both agree. While that additional cost might be nominal in this example, extension of the idea across the supply chain can add up to significant expense."
Dr. Kravitz has seen a similar disagreement over brands of suture, which is "just string," he says. The Montgomery Surgery Center began switching from Ethicon sutures to B. Braun because B. Braun, a large company in the European market, was trying to gain a larger market share in the U.S., and the lower price would save the center thousands of dollars.
"At our center, we've been successful at making the change, although there's a plastic surgeon who thinks he can tell the difference, so he gets to use what he wants," Dr. Kravitz says. "We don't want to alienate him. We may shop at Costco for our home and get Kirkland brand. But in surgical equipment, we like name brands."
4. Treat non-investor surgeons as customers. Dr. Kravitz says non-investor surgeons often think of themselves as customers in an ASC because they are bringing in cases for which the center gets reimbursed. In this situation, they don't have much incentive to worry about cost because it doesn't affect them. He says they also expect to have everything ready for them and often only get involved in supply chain and inventory when there's a problem.
"Surgeons are trained with the expectation that what you need will be there," he says. "I think that in general, we rely on our administrator to take care of the inventory. I've gotten involved only when it doesn't work, and that's frustrating."
Like in the case of the plastic surgeon who preferred Ethicon sutures, Dr. Kravitz says many center administrators are worried about alienating surgeons over supply costs.
"In many surgery centers, the administrators are very afraid of alienating the surgeons who are customers and even the surgeons who are partners," he says. "The bigger the surgery center, the less the administration feels it should interfere."
Administrators can strike a balance, but if a surgeon absolutely prefers a certain name-brand product, administrators should concede.
5. Physicians don't like change, and that includes changing supplies. Surgeons are a tough nut to crack when it comes to changing their ways, Dr. Kravitz says.
"Surgeons are very superstitious," he says. "We like what we like, and that's the way it is. Doctors are a conservative bunch, and surgeons are the most? conservative of the conservative."
However, Dr. Kravitz does see more physicians becoming aware of supply costs because of healthcare cuts and the fact that everyone is operating on such a tight margin.
"I think there's a growing awareness of surgeons that they need to get involved in supply chain," he says. "As the margins get really narrow, it benefits you to be a smart shopper. Even thought you're not buying, you're influencing what gets purchased."
Dr. Kravitz says that physicians, by virtue of their training and practice, drive a lot of healthcare costs in the U.S.
"We've generally very cost insensitive. In many situations, the patient doesn't care because they have insurance; the doctor doesn't care because he doesn't pay. Who ends up paying is everybody," he says. "We are trained not to care. That's a factor in the high cost of healthcare."
Related Articles on Supply Chain:
6 Factors to Consider When Choosing a GPO
8 Tricks to Save More Money at Your Surgery Center
10 Overlooked Ways to Cut Costs in an ASC
"By virtue of their leading role in healthcare delivery, physicians are in a great position to influence the supply chain," says Richard Peters, senior director of ASC services at Provista, a supply chain improvement company. "Their selection and utilization of the products used in the surgical suite are often major driving factors of supply costs."
But physicians are not such an easy sell when it comes to getting involved in the supply chain, says Alan B. Kravitz, MD, a general surgeon and investor at Montgomery Surgery Center in Rockville, Md., and an advisor for Surgical Care Affiliates' supply chain team. Dr. Kravitz and Mr. Peters discuss five points on physician involvement in supply chain management.
1. Surgeons are trained not to care about cost. Dr. Kravitz says that surgeons are not sensitive to cost simply because they were never trained to think about the cost of their supplies.
"Surgeons are not very intuitive to cost, because we don't care," says Dr. Kravitz. "We've all gone through residencies in hospitals where we get what we want when we want it. Very often, hospitals are able to pass the cost on to someone else. Surgeons are fairly apathetic as to how much things cost."
2. Educate surgeons and appeal to their competitive nature. Dr. Kravitz says even though surgeons were not trained to think about costs, if they are educated on the cost of their supplies and procedures, they can be persuaded to start thinking more about the cost of what they do. Mr. Peters says giving physicians insight into the financial impact of their supplies can push them to get involved.
"Even if they don't have a financial stake in the organization, most physicians like to be considered in important decisions, and savings from the supply chain can lead to enhancements that surgeons value," says Mr. Peters.
When looking at physician involvement, there is no substitute for a conversation, he says.
"Administrators should plan to meet with active surgeons in the center at least quarterly to review overall performance, to ensure that the surgeon's needs are being met, to identify and resolve any concerns about scheduling or staffing and to discuss issues such as supply utilization that might not come up in routine work conversations," says Mr. Peters. "In addition, periodic review of preference cards, case costing and waste should be a natural time to discuss supply utilization."
Analyzing cost per procedure for each surgeon is one way to start the conversation about cost. If one surgeon's costs are higher than his or her peers, that can be the starting point for a conversation and eventual change.
"Physicians are highly competitive by nature, and very responsive to data," says Mr. Peters. "For example, if you have a surgeon whose case costs are out of line relative to peers or to reimbursement for a certain procedure, providing them blinded data comparing their costs to their peers or data on reimbursement relative to costs can be a strong motivator to change their behavior."
3. Encourage surgeon agreement on low-cost products. It's not just the high-cost items that increase supply costs, Mr. Peters says.
"While high-cost items like implants might come most immediately to mind on this topic, the notion of physician preference can even extend to things most people regard as a commodity, like gloves," he says. "If you have two surgeons that each prefer a different brand of surgical glove, you'll have to have twice as many total gloves in stock than if they can both agree. While that additional cost might be nominal in this example, extension of the idea across the supply chain can add up to significant expense."
Dr. Kravitz has seen a similar disagreement over brands of suture, which is "just string," he says. The Montgomery Surgery Center began switching from Ethicon sutures to B. Braun because B. Braun, a large company in the European market, was trying to gain a larger market share in the U.S., and the lower price would save the center thousands of dollars.
"At our center, we've been successful at making the change, although there's a plastic surgeon who thinks he can tell the difference, so he gets to use what he wants," Dr. Kravitz says. "We don't want to alienate him. We may shop at Costco for our home and get Kirkland brand. But in surgical equipment, we like name brands."
4. Treat non-investor surgeons as customers. Dr. Kravitz says non-investor surgeons often think of themselves as customers in an ASC because they are bringing in cases for which the center gets reimbursed. In this situation, they don't have much incentive to worry about cost because it doesn't affect them. He says they also expect to have everything ready for them and often only get involved in supply chain and inventory when there's a problem.
"Surgeons are trained with the expectation that what you need will be there," he says. "I think that in general, we rely on our administrator to take care of the inventory. I've gotten involved only when it doesn't work, and that's frustrating."
Like in the case of the plastic surgeon who preferred Ethicon sutures, Dr. Kravitz says many center administrators are worried about alienating surgeons over supply costs.
"In many surgery centers, the administrators are very afraid of alienating the surgeons who are customers and even the surgeons who are partners," he says. "The bigger the surgery center, the less the administration feels it should interfere."
Administrators can strike a balance, but if a surgeon absolutely prefers a certain name-brand product, administrators should concede.
5. Physicians don't like change, and that includes changing supplies. Surgeons are a tough nut to crack when it comes to changing their ways, Dr. Kravitz says.
"Surgeons are very superstitious," he says. "We like what we like, and that's the way it is. Doctors are a conservative bunch, and surgeons are the most? conservative of the conservative."
However, Dr. Kravitz does see more physicians becoming aware of supply costs because of healthcare cuts and the fact that everyone is operating on such a tight margin.
"I think there's a growing awareness of surgeons that they need to get involved in supply chain," he says. "As the margins get really narrow, it benefits you to be a smart shopper. Even thought you're not buying, you're influencing what gets purchased."
Dr. Kravitz says that physicians, by virtue of their training and practice, drive a lot of healthcare costs in the U.S.
"We've generally very cost insensitive. In many situations, the patient doesn't care because they have insurance; the doctor doesn't care because he doesn't pay. Who ends up paying is everybody," he says. "We are trained not to care. That's a factor in the high cost of healthcare."
Related Articles on Supply Chain:
6 Factors to Consider When Choosing a GPO
8 Tricks to Save More Money at Your Surgery Center
10 Overlooked Ways to Cut Costs in an ASC