How to Get Docs On Board with Product Procurement

The key to getting doctors on board is to present them with the evidence, and then put it to a vote.

One of the biggest hurdles in supply chain is gaining physician support for clinical product procurement.

In this interview, Dan Hurry, president of Advantus Health Partners, the Cincinnati based supply chain mangement and group purchasing organization, says the key to getting doctors on board is to present them with the evidence, and then put it to a vote. Hurry spells out the process that he recommends in this, the first of a two-part interview with HealthLeaders. This transcript has been edited for clarity and brevity.

HL: How big of a factor is physician preference in supply chain?

Dan Hurry: From a quality of care, from an economic, and from an efficiency standpoint, it's probably 60% of what you should be talking about and working on at any given time. The activity is revolving around the ORs, the cath labs, because that’s the implant space, whether it's cardiac, whether orthopedic, those are the predominant spaces where the engagement between a physician and a manufacturing rep and your operational leaders interconnect.

Would hospitals always be looking for the lowest cost? No. They’re looking for what’s the best outcome for the patient at hand. Now with that, it's always debatable about what is the better product. So, we lean into clinical evidence in all those scenarios. The cost of goods, how much we're buying it for is only one part of the equation.

HL: Where is the potential for conflict?

DH: In many cases it may be relationships that a manufacturer's rep has with a physician. What is their role in the OR or the cath lab, and how does that impact choice? That space is always under scrutiny with the potential for conflict, but there's usually a superficial point that's brought forward, so we lean into most of the evidence and that all comes from the physicians’ side of the house.

We collect and organize data on the front end, and we put together a “fact pack.” Using cardiac rhythm devices as an example, we ask what the patient looks like, how the physicians use the devices, where do they use these devices, what does that look like from either a regional or a national market share utilization perspective, what do the outcomes look like with any particular devices, etc.

The fact pack yields data that allows some comparables between different scenarios, different companies, different products, whatever that looks like. Once you get that homework done, it's time to engage the physicians and see what the state of the union looks like.

Typically, there will be a very brief engagement with the physicians on the front end, before gathering the data, telling them we're going to review this. When we've got bigger, better and deeper data, we'll engage you on a deeper level.

Then when we engage them on all the facts, they're scientists, they want to see the data they want to see what this looks like, and we have some dialogue from there. Ultimately, we ask where do we want to go with the product based on its lead with that clinical evidence? Then we'll ask how do we negotiate for the best quality products.

HL: How important is volume in price negotiations?

DH: We’ll use the Costco model as an example. They usually don't put sub-quality products on their shelves. They negotiate for the best quality within a category or product mix and match what deserves shelf space. We do that at the front end. What are the products that deserve some shelf space, where we agree that this is a quality product made by a quality company with outstanding outcomes? How do we negotiate to come up with the economic package to support continuous use?

Once that's done, there is a perpetual review, with continuous improvement exercises constantly engaged with category management teams of cross-functional players in quality, clinical, economic and operations.

HL: To what degree is cost part of the equation?

DH: We do not chase low-cost goods. We chase the best quality goods and then drive the best economic outcome for those quality goods. Cost is always a factor, but it is a tertiary concern, behind outcomes and quality.

We contract with a few outside companies that are run by physicians who do independent assessments of outcomes, quality, the attributes associated with any given product. We’ll ask if these assessments align with our physicians’ experience. They may or may not agree with an analysis and that's where we want to gain their input.

HL: Who has the ultimate say in what product is purchased?

DH: We have a cross-function of folks, physicians, C-suite executives, quality, economics, finance. Supply chain is run by a certain group of folks that go through this process. There’s a vote and a proxy and what we land on and what's approved. It's no independent group in and of itself.

Once we've landed on the right product or product mix, like any other consumer, we negotiate based on attributes, our commitment to the products, the optimal logistics solution, what do our payment terms look like, everything that kind of supports the economic equation for the products that we've selected. There’s no rocket science out there.