4 healthcare executives weigh in on a supply chain conundrum

Better management of physician preference items can lead to significantly lower costs.

The supply chain puts items into the hands of hospital staff. But sometimes they don’t want to let go—even when a change could save money.

The Mayo Clinic, for instance, is trying to move away from a culture of buying what physicians want personally and instead shifting to buying what makes clinical sense, according to Dan Schmitz, Mayo’s senior director of procure to pay and supply chain informatics, at a recent executive breakfast and discussion on innovations and trends in healthcare supply chain practices hosted by FierceHealthcare and American Express.

All of the supply chain executives at the event agreed that better management of physician preference items can lead to significantly lower costs. But managing physician preference items also comes with managing the physicians.

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When physician preference items can be gradually changed, it usually requires months, if not years of research, to obtain buy-in. “Doctors are scientists. They want to see data,” Schmitz said.

Tony Johnson, chief supply chain officer for Baylor Scott & White Health, noted that the system has come up with a specific way to make changes in purchases. The process involves every executive who has final say in making the purchase (up to and including the C-suite because of the expense), while recommendations must come from the service line governance committee. Every decision to change a specific supply or supplier in the service line is backed up with both clinical and financial evidence. But even with that process, it can be tough to make a change in some areas such as orthopedics, which often has among the most expensive devices and supplies within a hospital.

Sally Hurt-Deitch, market CEO for The Hospitals of Providence, a five-facility system based in El Paso, Texas, noted that many doctors—particularly orthopedic surgeons—have their supply preferences all but baked in during their residencies. She suggested that medical schools and residency programs perhaps rethink some of the approaches they use to train doctors to make them more flexible on what supplies they are willing to use for their work.

But at the moment, it can be a tough sell. “For 30 years, they’ve been driving a Porsche, and now you want them to drive a Hyundai. They don’t want to drive a Hyundai,” said Charles Cobb, administrative vice president and chief of supply chain for UT Southwestern Medical Center in Dallas.

But supply issues can go beyond just physician preference. Cobb noted that talks on selecting new tissue paper among the nursing staff dragged on for six months. Haggling over the kind of box they should come in, whether they should contain lotion and whether packs should be available to give to patients predominated. What appeared an easy way to save $50,000 a year was anything but.

And the fear of change can lead to what Hurt-Deitch said is the bane of the supply chain: Hidden inventory. “We know that in general, staff are hoarders. They fear they’re not going to have something one day, and people keep putting stuff away because the apocalypse may come,” she remarked. Linen is at the top of this list; lockers full of sheets and towels are routinely uncovered.

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