At the Margins

Looking to protect surgical margins? A physician champion can help.

Surgery often represents a double edged sword for finance executives. Though surgery is a major source of hospital profit, surgical supplies represent about 25% of an average hospital’s total spend. To maintain positive margins, providers need to reduce surgical costs without sacrificing quality outcomes.

As we’ve previously discussed , encouraging surgeons to use a standard set of lower-cost supplies is a great opportunity to decrease costs without sacrificing the quality of care delivered. However, many organizations struggle to get surgeons to change usage of preference items. Many surgeons our team speaks with believe that their higher costs translate to better outcomes or that reducing supply costs is more an issue of contracting than individual choice.

How to motivate your surgeons

At the Advisory Board, we’ve found that the best way to motivate surgeons is for OR leadership to meet with them in small groups or one-on-one and show them hard data. Best practice organizations are able to link cost data specifically to patient care outcomes, including metrics like case length, length of stay, readmission rates, and complication rates. In addition, adjusting cost comparisons based on patient risk increases the credibility of the data you are sharing. When faced with this information, surgeons have a hard time falling back on old excuses and will be motivated to consider alternatives they may have previously refused.

However, while these meetings can be highly successful, they can also be uncomfortable and contentious. In order to minimize ruffled feathers and make these interactions more pleasant and successful for everyone involved, we recommend you include a physician champion: a physician partner who is engaged in the idea of supply chain reform and can lend clinical credibility to administration-backed efforts to reduce variation and cut costs.

The role of the physician champion

A physician champion does not need to hold an official leadership role. In fact, a good physician champion is often an informal peer leader, someone that other physicians like and respect. The primary criterion for selection is that the physician champion is enthusiastic about standardizing supply use and is willing to invest the necessary time and energy.

Before supply cost conversations, the physician champion should work with OR leadership to review the data and help determine which surgeons have the greatest opportunity to reduce supply costs and the best ways to do so. The physician champion will likely have a more in-depth understanding of existing surgeon relationships, preferences, and culture and can use this knowledge to determine how best to present the data. He or she can help answer questions such as whether to meet with surgeons individually or in groups, and how to present information in ways that will resonate.

During meetings, the physician champion can facilitate discussions and serve as a buffer if clinicians push back. Other surgeons will be more receptive to suggestions and feedback from a physician champion because he or she is seen as "one of us"—an ally, not an adversary. In addition, the physician champion can field clinical questions and share examples and insights from his or her own practice.

An ongoing process

Finally, once you’ve secured your physician champion, ensure that he or she remains actively involved in your supply chain reform efforts for the long haul. The physician champion should check in with staff regularly to guarantee that they stay on track and work to continually uncover new opportunities for cost savings.  Leveraging a physician champion to strengthen relationships and increase physician engagement will not only help to sustain profitability in surgical services, but can also increase the likelihood of success for other cost saving initiatives.

Want more ways to communicate so your surgeons listen?

Check out our white paper, Engaging Surgeons in Cost Control, for six lessons for effectively sharing cost performance data with physicians.