Physician Engagement for Successful Cost Reduction

Physician preference items or physician driven spend is a significant driver for hospitals. Hospitals should aim to work together with their physicians, not just work with them when the need arises. Three obstacles are observed when hospitals begin the initiative of engaging their physicians for cost savings. Hospitals should have a playbook they use to have positive engagements with physicians when reviewing cost analytics. Once physicians trust the administrative leaders, they become more open and willing to discuss the cost of their preferred healthcare supplies.

The three biggest obstacles for hospitals when they are engaging their physician for cost savings.

Three large areas drive these engagements. The first is data analytics, which is the foundation. Then the second area is physician engagement, which the analytical foundation drives. Finally, the third obstacle is aligning the data analysis and physician engagement to have a productive strategy that a hospital can use long-term.

Hospitals Encounter Difficulty When Gathering Data Analytics

Data analysis is the foundation of engaging physicians for cost savings. The analytics needs to outline a clear picture of the following, what’s being used? What is being purchasing? How are items being used in the case? Why has each item been chosen? Finding this data is time consuming and often slows the analysis process down.

The analysis and gathering of the data is a massive undertaking, and usually, the daily responsibilities get put off, or worse, hospitals will only look at part of it. For example, they may avoid looking at profitability as it’s not a priority now, or they’ll take some components out to lessen the load of gathering the data.

The process creates an obstacle for hospitals because the amount of data that’s truly needed in order to perform an accurate landscape in analysis and a perspective is huge. Moreover, the data analysis will need to be condensed to allow physicians to clearly understand what is being presented.

Physicians’ preference items are the biggest areas of expense for a hospital. So, time should be invested. If the time isn’t being invested, how do you get resources to invest or help with that?

Physicians' preference items are the biggest areas of expense for a hospital. So, time should be invested. If the time isn't being invested, how do you get resources to invest or help with that? Click To Tweet

Presenting Data to Physicians in a Manner They Understand to Promote Engagement

Data analysis is going to lead into the physician engagement. You need to establish credibility with accurate analysis and insight, provide clear data that’s concise and makes sense to the physician.

Often, hospitals struggle to find a way to present this data to the physician so they can see the information in such a way that your internal stakeholders feel good about it. Hospitals often face the obstacle of developing report with their physicians and gaining their buy-in.

The difficulties are presented when hospitals feel that the conversation around usage is potentially a point of conflict or a difficult conversation to have with their physicians. However, it can be as simple as saying, “We put together a contract with this tibia, but you aren’t using it, we will need to renegotiate it.” By engaging the physician in the conversation hospitals will uncover the rationale behind something not being used, or perhaps overused.

If time has been invested in gathering the data, it’s important that the data can be presented to the physician with their understanding and rationale in mind. Once that is shown to physicians’ hospitals will have a different kind of conversations opening new areas of opportunity for cost savings.

Aligned The Strategy and Acquire Support from Every Part of The Team

Uniform strategy is key to success for long-term successful engagement with physicians. Not only will this strategy need to be uniform for physicians, but it will need to acquire support from C-Suite, and supply chain, so that when approaching the vendor, the whole team is engaged.

Aligning the strategy can be an obstacle for hospitals as they attempt to engage each party. Hospitals may put a process together that works for supply chain but doesn’t work for anyone else. The goal for the strategy is that it works together for supply chain, has physician support, and is entirely backed by C-suite. That will ensure negotiations are as strong as possible.

Having a Successful Process to Engage Physicians in Cost Savings

Garnering Success When Approaching Data Analytics

Without a deeper dive into analytics, hospitals will struggle to get the cost saving initiatives off the ground. Although this data is a massive undertaking starting with a few reports and putting in place a resource to aid in the data collection will be the pinnacle to the success of uncovering cost savings.

Start by gathering these reports:

• Purchase Order History
• PO Detail Report
• Bill Only Data
• Reimbursement Data

Then categorize and subcategorize each report. A few examples while working on orthopedics could be:

• Is it reconstruction?
• The primary cases by physician
• By insurance provider

Successfully Engage Physicians in Cost Saving efforts

When hospitals gather the data, they often focus on data that won’t resonate with the physician. Physicians want to see:

• Benchmarking
  
• How they compare in the market
  
• Their case cost or construct cost compared to other physicians who are using different vendors
  
• The profitability for cases

Ensuring a successful engagement with physicians comes down to having all of the data organized and being able to answer any questions. The presentation should be as short and concise as possible. Physicians should be shown high-level, here’s what you’re using, and here are some ideas of different strategies that we could use to achieve cost savings. Then by listening to the physician. Likely they’ll offer information that the hospital isn’t privy to through the analytics.

Put in Place ongoing communication to achieve Long-Term Alignment

New products and innovations come to market daily. Typical brands differentiate themselves through innovation which has a much higher price point. When hospitals decide what should be invested in, they’ll need to have ongoing collaboration between the doctors and the team in the supply chain while maintaining the backing from C-Suite. 

Ask questions like:

• Do they provide a benefit versus what you’re buying now?
  
• The reimbursement hasn’t changed, so are the outcomes improving?
  
• Is it saving you money downstream with readmissions?
  
• Is it warranting this higher price point because of better outcomes?

Hospitals should address new products collaboratively and then ensure they’re priced appropriately rather than allowing the physician to order a new product. This will break the cycle of physicians ordering items, hospitals paying for them, and then not addressing it until the contract comes up again.

By applying this approach proactively and consistently utilizing this as an area for constant review, hospitals will find that engaging physicians will be more likely to participate in cost-saving initiatives. 

For proven strategies to increase your hospital’s financial and operational performance—and to rapidly reduce your non-labor costs, schedule a call with Lisa Miller.