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Physicians Can Play Formal, Informal Roles in Healthcare Supply Chain

Analysis  |  By Christopher Cheney  
   April 05, 2022

To be successful, physicians who participate in supply chain must have good communication skills and curiosity about supplies.

Physicians play a variety of roles in supply chain at hospitals and health systems, a healthcare supply chain expert says.

Eugene Schneller, PhD, is a professor in the Department of Supply Chain Management at Arizona State University's W.P. Carey School of Business and cofounder of Healthcare Supply Chain eXcellence. He is also director of the Health Sector Supply Chain Research Consortium, which is a university-industry cooperative committed to advancing healthcare supply chain practice.

HealthLeaders recently interviewed Schneller about the roles that physicians can play in hospital and health system supply chains. The following transcript of that conversation has been edited for clarity and brevity.

HealthLeaders: Are there formal roles that physicians can play in a health system's or hospital's supply chain department?

Eugene Schneller: Physicians can participate in several ways. One way is as a member of a value analysis team organized and managed by supply chain. In many cases, these are standing committees to look at products such as in orthopedics or cardiology. These committees meet monthly or several times a year to look at products that the hospital is using. Physicians are demanders of products, and there needs to be a very clear relationship or mechanism by which physicians can provide input to supply chains. Value analysis teams are one way to do that.

As hospitals look at new products, they invite physicians to bring those products to them. In that case, the physician is a proposer.

Physicians can sit in on sessions where the hospital is looking at a class or category of goods, and physicians participate at looking at those goods. That happens frequently when a contract is ending.

Physicians can also serve as liaisons or "linking pins" to the supply chain department representing their clinical departments. If you think of supply-intensive admissions such as orthopedics and cardiology, those are areas where new products are evolving constantly, so you may have a physician working in a liaison role that is part of the physician's total responsibility.

Physicians can also participate in quality assurance processes that are conducted by supply chain.

Often, there are physicians who are full-time employees of supply chain departments. Some large health systems have physicians embedded within supply chain.

HL: For physicians more broadly, how can they play a role in supply chain functions and activities?

Schneller: Physicians can serve as scouts for new products because they go to meetings that frequently have demonstrations of new products.

Physicians can communicate when the relationship with a supplier is not what has been agreed upon in a contractual relationship in terms of the supplier providing support for the product.

Physicians can also communicate the criticality of a product in a procedure. Increasingly, we are thinking not just in terms of individual products but in terms of an episode of care. For example, you can have a hip replacement or a knee replacement with several products involved, so the interaction of several products is important. Physicians can communicate about that interaction. A group of surgeons may decide that a product is not necessary, so they need to communicate with supply chain about what is happening.

Physicians may be the first to find out about the absence of a product. They need to communicate with supply chain about these "stock outs."

Physicians also may be the first to know about problems with products such as products that are not working properly. There can be products that the Food and Drug Administration has not yet recalled but a clinician may recognize that the product is not performing correctly and communication with supply chain is important.

HL: For physicians who participate in supply chain management, what kind of qualities should they have to be successful?

Schneller: They need to be able to communicate in all directions. They need to be able to communicate with their physician colleagues about discussions related to products. If a hospital has several physicians within a specialty, those physicians collectively have an interest in what products are available and they have strong preferences. Physicians have preferences for brands on the basis of their perceptions of brand performance, on the basis of the outcomes they achieve, and their relationships with companies. As supply chain considers reduction in the number of products, addition of new products, or maintaining a robust mix of products, communication between physicians and supply chain is critical.

Physicians who work with supply chain also need to have curiosity about supplies. In most medical schools, there is relatively little education about supply chain or how supplies are chosen. So, a physician who plays a supply chain role needs to have curiosity about supplies, the information about supplies, and their relative effectiveness and comparability to other supplies.

HL: How should supply chain leaders communicate with physicians?

Schneller: The most important thing is establishing relationships and communication channels. A supply chain leader should not only show up when there is bad news such as a product not being available or when there is a delay in a product coming from overseas. There needs to be relationships so supply chain leaders are not just delivering bad news—they must understand the needs of the clinicians.

Critical to the relationship is bringing data. When you want to influence a clinician or a clinician is curious about a new product, it is important to have data about products and their performance that is provided by the supplier or generated through comparative work. At some of the more progressive health systems, artificial intelligence is being used to look at what products are used in an episode of care. For example, with hip and knee replacements, information systems can be used to understand which products contribute to the cost, quality, and outcome of the episode of care.

Increasingly, clinicians are being incentivized to reduce costs through bundled payments, where a hospital gets a single sum of reimbursement for an episode of care. Within a bundled payment for a surgery, there are all of the costs for the episode of care including the costs for supplies, and any savings can be distributed by the hospital through a gain-sharing arrangement. Under these circumstances, having data about supplies is important.

You need to be able to communicate with physicians about supply issues and anticipate them ahead of time. During the pandemic, we have seen problems related to the availability of products, and you need to let physicians know about these problems ahead of time and provide alternative products that are satisfactory. To have these conversations, you need to have relationships and to be able to communicate effectively.

Related: Shrink Hip and Knee Replacement Costs

Christopher Cheney is the CMO editor at HealthLeaders.


Formal supply chain roles for physicians include serving on value analysis teams and participating in quality assurance processes.

Informal supply chain roles for physicians include alerting supply chain departments when products go out of stock and when there are problems with products.

To communicate effectively with physicians, supply chain leaders should establish relationships with clinicians.

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