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Cut Physician Preference Costs by Building Physician Bonds

Karen Minich-Pourshadi, for HealthLeaders Media, June 4, 2012

While one goal of the PPI effort was to reduce supply costs, an equal priority, Robb says, was to preserve physician choice from a list of multiple vendors.

UC Health created nine clinical advisory groups that included physicians, nurses, pharmacy staff, and contracting personnel to review products and determine which vendor's items and contracts were acceptable. The teams helped categorize the preference items, evaluate vendor pricing, and benchmark the prices against aggregate data to determine fair market value within each product category.

Hinds says it was the organization's collaboration with its physicians that made it possible for the organization to select just one key vendor for each item. By selecting just one vendor, the system is able to leverage its size and buying power to secure better terms, conditions, and prices.

"Physicians and nurses led the discussion and determined which were acceptable items. Then [supply management] concentrated on negotiating to get the best terms, conditions, and prices. Once we executed a contract, we could lock out the other vendors and move 100% of our business solely to that new contract within two weeks [without clinician resistance]. We couldn't have done that without having the engagement and support of our clinical end users from the onset," he says.

For instance, one team was able to reduce the acquisition cost of implants and implantable devices for total joint, spine, and trauma procedures. In this area alone, UC Health realized over $5 million in savings in 2011, or approximately 25% of its orthopedic spend that year.

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1 comments on "Cut Physician Preference Costs by Building Physician Bonds"


Fred J. Pane (6/6/2012 at 9:12 AM)
Please read the article in JHC January 2010. The key to successful physician and hospital relationships? In a word, balance. Look to your facility's P&T committee for a model. It could help your IDN succeed in the world of bundled payments. The Journal of Healthcare Contracting | January 2010