I just read an article in one of our industry’s leading supply chain publications touting the benefits of the standardization of physician preference items (PPI) as the next level of supply chain savings performance. This PPI savings is accomplished by reducing the variation or brands of different PPIs (pacemakers, orthopedics, stents, etc.) a healthcare organization is buying. This strategy also reduces the chance of errors by staff who are required to be educated in the use of multiple PPIs with different techniques for the same purpose.
Alternatives to PPI Standardization
While this strategy is a noble endeavor, it is one most fraught with danger because your surgeons are trained on a certain device (pacemaker, orthopedic, stent, etc.) and aren’t easily dissuaded from changing their preference. A better way is to make sure the average cost of your PPIs is equal to or lower than the national average. For example, if your CRM general pacemaker average is running at $5,200 and your cohort average best practice is $4,200 and both include a lead, then you need to focus on the functional specifications and what the cardiologists are selecting. We saw recently that one client had great selection criteria with two out of their three CRM manufacturers, but needed to address the selection criteria in their third.
The goal is to encourage your surgeons to only use PPIs that fit that cost target or assist you in negotiating with your vendors to lower their pricing to functional requirements matching the national average. It is rare that this strategy doesn’t work since your surgeons have enormous influence over your PPI selection, and your vendors know it.
Another option is to meet with your new surgeons and your medical director to understand their PPI requirements and then to explain your PPI cost strategy. In most cases, your new surgeons can select from a brand that is already under contract. If not, have them negotiate pricing with their PPI vendor to conform with your PPI pricing targets.
The reason I like this PPI pricing selection strategy best is that you aren’t forcing change on your surgeons but partnering with them to find a solution to your cost problems. Remember, people like the change that they make happen!
|About Robert T. Yokl, Founder & Chief Value Strategist for SVAH Solutions|
|Robert T. Yokl is President and Chief Value Strategist at SVAH Solutions. He has four decades of experience as a healthcare supply chain manager and consultant, and also is the co-creator of the Clinitrack Value Analysis Software and Utilizer Clinical Utilization Management Dashboard that moves beyond price for even deeper and broader clinical supply utilization savings. Yokl is a member of Bellwether League’s Bellwether Class of 2018.
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