Nick Sears

Taking a close look at successful physician engagement strategies employed by other organizations can help hospitals develop an effective approach for collaboration-and improve margins.

At a Glance

Proven strategies for engaging physicians include:

  • Listening to physicians' concerns before making requests  
  • Identifying physician champions and working with them on key initiatives  
  • Ensuring that practice patterns support savings over time  
  • Involving physicians in monitoring cost savings  
  • Using data to support changes in behavior  

The incentives for physician integration are plentiful for hospitals, especially as payment reforms shift the basis of payment from volume to value and as rising supply costs make it increasingly difficult for hospitals to improve service-line margins. Successfully engaging physicians in cost containment initiatives can tilt the balance on service line operations toward greater profitability-and ultimately improve overall operating margins.

"Physician engagement is the lynchpin to turn paper savings into real savings," says Roger Weems, senior vice president, performance management, Westchester Medical Center, Valhalla, N.Y. "You can negotiate new contracts with better pricing in place, but if you aren't effectively working with physicians and gaining assurances that their utilization patterns will support those presumed savings, it's a useless effort."

There is no "one-size-fits-all" approach to physician engagement. Each organization has unique operational and political issues as well as varying levels of communication between the members of its medical staff and its administrators. However, a number of successful strategies for physician engagement can be learned from providers nationwide that have reduced supply costs and maximized reimbursement through effective collaboration with physicians. Here are five strategies your organization can incorporate to drive physician engagement.

Strategy No. 1: Listen to Physicians' Concerns

Before Making Requests One of the most effective strategies for successful physician engagement may also be one of the simplest: taking a step back to listen to what physicians are saying and build the trust that's the foundation for any productive partnership.

For Joe Colonna, vice president of supply chain for Piedmont HealthCare in Atlanta, the strategy is blunt, but effective. "Shut up and listen," he advises. "Trust is about building relationships and not coming to the table the first time with an 'ask.' Don't make your first conversation with physicians about what they can do for you. Instead, get their input on where they see opportunities to lower costs and improve performance, and be in a position to deliver something from those conversations."

These initial conversations with physicians also can provide insight into the quality of communication within an organization and whether physicians and administrators are aligned or have a contentious relationship. Where good dynamics exist, it's often easy to determine expectations from both sides as well as forecast the level of cooperation expected at the outset. In situations where relationships are strained, one-on-one meetings with physicians will yield details on the issues that present challenges, the roadblocks to navigate, and potential solutions.

Once those findings are presented to the administration, providers can decide on ways to resolve issues and broker deals that focus attention on the true problem at hand, such as how to decrease the costs of physician preference items while preserving the quality of care, or how to develop a value analysis process and gain physician support over the long haul that sustains lower price points.

And when trust is established and communication issues are resolved, the concept of physician engagement can evolve into a reality. Pam Scott, vice president of supply chain management for Baylor Healthcare System, Dallas, subscribes to the benefits of listening: "Physicians have been phenomenal in their support of our initiatives. They know that when we have an issue in one of our service lines, I'm first going to get their input and ask them for guidance on how to respond. In turn, they will help manage us through the process of dealing with the issue."

Strategy No. 2: Identify Physician Champions 

A critical first step in establishing the level of trust necessary for effective communication is identifying champions from among medical staff members who will serve as liaisons to the administration and provide leadership, accountability, and clinical oversight for initiatives designed to reduce the costs of physician preference items. Doing so will provide the framework to address issues and ensure targeted, efficient communication.

Baylor Healthcare System has physician champions in place at each of its 14 facilities to help with strategic initiatives. "When our organization considered undertaking an orthopedic/spine initiative, we went to our champions first, explaining the project, the projected savings around it, and its overall impact on our system, and emphasizing the need for physician participation," Scott says. "Once our physician champions for this specialty were on board, we introduced the initiative to all of the orthopedic/spine surgeons who practice in the Baylor system."

Scott and her team held meetings with its orthopedic/spine physicians, sharing aggregated service line data as well as individual procedural outcomes and financial data, and discussed how costs related to the service line affected margins. "We showed them everything so that it was transparent: 'Here are the costs, and here's what Medicare pays,'" Scott says. "The physicians understood that the initiative was not just a process to help our organization save money and improve our bottom line. It was about the fact that this service line, from a Medicare reimbursement component, was losing money-and this threatened our organization's ability to continue infusing capital into the service line if that trend continued."

Because Baylor took the time to secure physician champions for the initiative before it was introduced to all physicians in this service line, the organization had such a strong level of support for the project that it was able to complete the initiative in 90 days-three months ahead of schedule.

The process of engaging physician champions can vary. Regarding Westchester Medical Center, Weems says, "We try to be less formal. For our various service line projects, we know that the physician directors in each department are going to make or break the initiative, so we rely on our physician leaders to provide insight and support for hospital-led initiatives in those areas. We ask these representatives which physicians need to be at the table for the initiative to succeed, and how to communicate change to the physicians who are performing the procedures. We respect each leader's preference on how to engage physicians in the service line, so we allow our physician directors to lead the charge and structure the communication in a way that works best for their departments."

Irv Zeitler, DO, vice president of medical affairs for Shannon Health in San Angelo, Texas, credits his physician leaders with securing the support of the medical staff for key initiatives: "They command respect, and their opinions are valued by the other doctors. The practice of medicine isn't different here than anywhere else, but the way in which we interact with our peers to accomplish what's required clinically has supported our organization's success."

Strategy No. 3: Ensure that Practice Patterns Support Savings Over Time

Suppose a provider negotiates a 30 percent savings on the price of bandages. Initially, it's easy to quantify the cost reduction. However, as time passes, it's important to continue to track those savings and determine whether actual physician usage is mirroring the expected financial benefits.

For example, what if the supplier were to introduce a new, improved bandage that would decrease physician use of the older type of bandage in favor of the upgraded-and more expensive-new bandage? And what would happen if both types of bandages were under contract, but physicians favored use of the costlier bandage? Projected savings in both instances would go out the window. To stop the savings drain, it's crucial to be able to quickly identify shifts in utilization, discuss the shifts with physicians, and adjust contracting strategies accordingly when new technologies enter the picture.

Strategy No. 4: Involve Physicians in Monitoring Cost Savings

In today's world, sound physician engagement strategies, coupled with advancements in technology, allow providers to gain the upper hand in controlling the cost of supplies and medical devices. Innovative providers have found that involving physicians in tracking the costs related to their use of supplies and devices can lead to unexpected savings.

Piedmont HealthCare in Atlanta has implemented a model that allows physicians to self-manage the cost-savings initiative. "In our electrophysiology area, we recently reached a market share agreement with our physicians where we commit a certain percentage of our market share for products such as pacemakers and defibrillators to two suppliers," Colonna says.

Each electrophysiology physician at Piedmont HealthCare reviews usage numbers weekly, and the physicians meet as a group monthly to ensure that the electrophysiology service line is meeting its market share commitment. The process allows the supply chain team to meet quarterly with suppliers and confirm that Piedmont delivered the numbers expected in return for continued aggressive pricing offered under the contracts.

"From the supply chain side, we facilitated the dialogue with the physicians in this specialty and showed them the opportunity for savings," Colonna says. "Ultimately, they decided that it was a model with which they could live, so we developed it with their guidance. Now-on a daily, weekly, and monthly basis-our physicians are ensuring that we meet our market share commitments and achieve the projected savings."

One key to the model's success: All sides honor their commitments, which is important not only to meet business goals, but also to respect the dynamics of relationships among the provider, its physicians, and suppliers. "To get to the next level of savings, we need to better understand our suppliers' cost points and make the case that through these initiatives, we can help reduce their cost of doing business," Colonna says. "In return, our organization should get a reciprocal reduction in the cost of our goods."

The dynamics of each provider and the markets a provider serves affect how strategies for physician engagement are implemented, but the desired results are the same across the board: getting physicians engaged in reducing supply costs. Shannon Medical Center serves a semirural community in West Texas. "Our physicians understand how their practices and our hospital and satellite clinics work together for everyone's benefit," Zeitler says. "They also realize that now more than ever, in an era of healthcare reform, it's important that the hospital be successful. We must preserve high-quality patient care, but the organization has to be financially viable to provide care and service."

At Shannon Medical Center, hospital administrators are working with physicians in specific service lines to enhance margins. For example, by working with the organization's neurosurgeons, Shannon Medical Center completed a cost-reduction initiative in the neurology department in fewer than six months. "The neurologists have been very cooperative in our efforts," Zeitler says. "They sent the message to suppliers that if suppliers chose not to work with our organization to reduce costs, the neurologists would work with another supplier."

Strategy No. 5: Use Data to Support Changes in Behavior

Definitive results are not earned on the basis of goodwill alone. For physicians, data are a critical component in making tough decisions that could benefit the hospital and their department.

"Physicians want comparisons," Zeitler says. "They're not very eager to accept the word of hospital administrators at face value when administrators are asking them to make a change. But when administrators can present physicians with benchmark data, regardless of the clinical indicator, it makes the task a lot easier."

Historically, Westchester Medical Center has been starved for good data, but investments in new technology have been the cornerstone for recent success in engaging physicians in the cost-saving process, according to Weems. "Data are the differentiators between successful cost savings initiatives and less successful attempts to engage physicians," he says. "Physicians are scientists, and when we bring detailed information to the table to share with them behind the scenes as we construct a process for achieving cost savings, they latch onto that data."

Detailed transactional data played a key role in Westchester's financial improvement initiative for its orthopedic/spine service line, which has the highest number of suppliers of all service lines, as well as the largest group of surgeons from whom to gain buy-in. The top spine surgeon used products almost exclusively from one of the market leaders, but those products were a major cost contributor to spine procedures. Detailed data provided by Weems and his team helped open that surgeon's eyes to the costs of the products he was using at Westchester relative to prices charged at other hospitals at which he practiced-where he had been privy to such details.

"It was the first time he had seen data relative to his cases here, and he was irate about the costs that we were incurring," Weems says. "Not only did he support tougher negotiations with that supplier, but he also vowed not to use those products until the price was lowered significantly. And he even offered to make calls and attend meetings with the supplier. Other surgeons in that specialty were similarly dismayed by the numbers. In effect, the strength of the data created a united front for change from physicians that's a dream scenario for any supply chain executive."

The important decisions that lead to savings opportunities only resonate over time if the requisite follow-up reinforces the process with physicians. Many physicians initially greet cost savings initiatives with skepticism, remembering previous projects where momentum stalled and follow-up failed to happen. Keeping physicians up to date on progress made, and providing feedback on financial performance through timely reports, emphasizes the ongoing value of the work. Diligent tracking beyond implementation lets all parties involved know that not only have costs decreased, but also that savings are being maintained.

Building the Momentum for Success

Physician engagement initiatives require a unique mix of people skills, process maneuvering, technology capabilities, clinical prowess, and tenacious follow-up. The lessons learned are transforming the supply chain process-and how the clinical and supply sides of the equation work together. Physicians are beginning to view the supply chain team as an advocate and a resource, as well as a strategic ally for continued improvement.

"At Baylor, we are getting more analytical and more strategic," Scott says. "It's not about moving products; it's how you're managing your business. As we enter the new world to be created by healthcare reform, the supply chain management team is going to be a key driver for finance, offering meaningful data and suggestions on how to use products to save money."

According to Scott, providing physicians with the data they need to make informed decisions is a key component for successful engagement of physicians in cost savings initiatives. "We have to own and understand the data before we go to doctors for their support on an initiative," she says. "We need to think about the questions they will ask and be able to talk to them about their practices and their patients, and how they affect the organization in terms of spend and product selection."

Success in this arena creates its own momentum. At Westchester Medical Center, both physician leaders and medical staff members are pleased with the process for involving physicians in cost savings initiatives and its structure, and are bringing an abundance of new ideas for savings to the table, using success on items such as implants as springboards to consider other product areas. "Our physicians are engaged," Weems says-and that is the optimal outcome.

Nick Sears, MD, is chief medical officer, MedAssets, Alpharetta, Ga. ( 


Publication Date: Monday, January 03, 2011

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