Cost, Quality & Outcomes

Physician Engagement in CQO Programs

Every hospital and health system in the United States wants to deliver more value to patients, to payers and to themselves. To uncover hidden value, forward-looking hospitals and health systems are integrating their supply chain operations with their clinical operations through formal CQO (cost, quality and outcomes) programs. In short, these providers make every supply chain decision with equal parts clinical feedback and financial input.
HealthTrust convened a virtual roundtable discussion with two physicians and a supply chain leader and asked them to share their thoughts on how healthcare providers can optimize their CQO programs while also engaging their physicians in the process.

Mark Pinto, M.D., MBA—Pinto is a practicing orthopedic surgeon and the medical director of surgical services and orthopedic service lines for Trinity Health in Livonia, Michigan. He works with eight Clinical Excellence Councils at Trinity Health, each of which partners with the system’s supply chain leaders to build a clinically driven supply chain for its 94 hospitals in 22 states.
Bob Taylor, MBA, CMRP—Taylor is senior vice president of supply chain for RWJBarnabas Health based in West Orange, New Jersey. Taylor oversees supply chain operations for the system’s 12 hospitals in the Garden State. He chairs the board of the Association for Healthcare Resource & Materials Management, which in 2018 published a 20-page white paper on CQO and the clinically integrated supply chain.
John Young, M.D., MBA, CPE, FACHE—Young is chief medical officer for HealthTrust. In his role, Young champions clinical integration in supply chain decision-making to advance the clinical and financial performance of HealthTrust’s 1,500+ member hospitals.

Pinto: I think everyone would agree that the current cost trend in healthcare is unsustainable. For hospitals and health systems, that means trying to bring down the cost of care while also trying to provide the same level of care that patients expect. That means digging into your cost structure and looking at areas where you can find more value. And a big part of your cost structure is your supply chain and the cost of all the medical supplies, equipment and devices.
Taylor: The shift to value-based healthcare increases the importance of CQO initiatives. Health plans no longer pay you just on the type of service or the volume of service but on the quality and the outcome of that service. To be successful in that environment, you have to improve the quality of care while simultaneously managing and reducing cost. In that scenario, you don’t want to overpay for something that gives you the same results as something less expensive. At the same time, you don’t want to pay less for something that results in lesser quality or outcomes.
Young: We have seen a number of mergers and acquisitions over the past five years, leading to large healthcare systems with diverse supply chain processes. True system integration requires the supply chain to be viewed as a strategic asset in the system’s overall performance and value proposition.

Can CQO make a big difference in the clinical and financial results of a hospital or health system?

Pinto: Yes, absolutely. I think that any time you’re doing a better job of “minding the store,” you’re going to have better outcomes in patient care and on your balance sheet. I don’t think it’s just nickels and dimes. The opportunities now are huge because of all the variability. We assume we all get the same outcomes from the same procedures for the same costs. But if you look around, you see that some of us are getting superior outcomes for remarkably less expense.
Taylor: It’s not just the invoice costs of medical supplies, equipment and devices that we’re talking about. It’s the clinical outcomes of using those items that can make a big difference, too. If the product or service results in a longer length of stay, complications or readmissions, those are real costs that should be attributed to the purchase cost of the product. Under value-based purchasing, payers reward you for better outcomes and can penalize you for worse outcomes such as avoidable infections or readmissions.
Young: There’s no doubt that CQO can make a significant reduction in total health expenditures not only within the four walls of the hospital, but in the outpatient setting as well. CQO also helps advance a transparent, data-driven culture that physicians are 
attracted to and want to participate in. This drives the relationships needed to deliver the highest value to patients.

Why is physician participation critical to the success of CQO programs?

Pinto: For anything to work, you have to engage the end users, and in this case, those are physicians. They are the people actually doing the work. More than anyone else, they are the ones who are motivated to do the right thing for patients. And, they’re also motivated to be the best at what they do. When you consider those three things, their participation is perhaps the most critical component to a clinically integrated supply chain.
Taylor: Physicians are the ultimate drivers of patient care in the healthcare delivery system. It’s essential that we work with them as closely and collaboratively as possible to identify what the doctors need from a clinical standpoint to provide the best possible care for their patients. It’s our job to present them with information and options that meet their clinical requirements.
Young: In a value-driven environment, quality and patient outcomes are equally important, if not more so, than cost. Physicians need to be at the table to ensure that quality stays at the forefront of the conversation when discussing supply chain strategies.

How can hospitals and health systems effectively engage physicians in their CQO initiatives?

Pinto: One of the most important things is to set up a formal relationship with your physicians before your first “ask.” Don’t let the first time they hear from you be when you want to take away their favorite device, implant or product. That sets up an adversarial relationship from the beginning. Engage physicians by setting up a system to regularly talk to them about what they need and how your supply chain can help them do their jobs. If you want that engagement, you have to establish trust first.
Taylor: You also have to meet your physicians at their doorstep. They’re extremely busy. Not all of them can participate on a standing physician committee that meets on a regular basis. To improve their engagement, you need to communicate with them through multiple venues—whether that’s onsite, offsite, email or video conference. They all want to do the right thing, but you have to make it as easy as possible for them to participate in your CQO initiatives.
Young: I agree. Overall governance is really important to not only tackle supply chain issues, but also to lead the health of the entire enterprise. Service line leadership—whether it’s clinical excellence committees as in Dr. Pinto’s system, or other clinical council constructs—is becoming more common to engage the appropriate physician stakeholders. Physician champions who are empowered to actively engage in the process and help create the strategies moving forward are paramount to success with a clinically integrated supply chain. Physician-led value analysis is a great example of a process that benefits from physician champions.

How do hospitals and health systems keep physicians motivated to reach their CQO objectives?

Pinto: You need to show physicians the data and be transparent about where it came from, how it was collected and how you are reporting it. The hospital and physician need to agree on whether you’re looking at the right data for the project you’re trying to evaluate. If you do make a change in an implant, a device or an instrument, you need to track the same data and share it with your doctors to show them any changes in outcomes or costs. If you can show them that what you did led to better care at lower costs, your physicians will be motivated to look for other opportunities within the supply chain.
Taylor: You won’t have any momentum if the first slide at your initial meeting is a big dollar sign. This is about providing cost-effective care that produces good outcomes. You want to always speak about it in those terms. To maintain your momentum after that first meeting and all subsequent meetings, you need to agree on next steps. And, you need to follow up on all the items that you agreed upon. If you don’t, your physicians may see this as just window dressing, and they’ll check out.
Young: Identifying and reducing unwarranted variation requires not only high-quality data, but also some time set aside for education. CQO can be complex initiatives to tackle, with diverse data sources—clinical, financial, supply chain—each looking at pieces of the care delivery system in different ways. Allow time for understanding to develop and be as inclusive as possible with your physicians (whether independent, employed, etc.) to make sure all key stakeholders are involved in what is essentially change management as a long-term strategy.

What other best practices have you seen at hospitals and health systems that do CQO the right way?

Pinto: They organize their CQO programs by medical specialty. That allows them to have experts in one specialty talking to other experts in the same specialty about the things they both use in their practices. Those conversations are more credible and meaningful. Successful programs also have physicians and supply chain leaders working together. It’s not top down. It’s better to collaborate with someone than have someone tell you what to do. I know physicians prefer collaboration when it comes to supply chain issues.
Taylor: There has to be a culture of collaboration. The preferred practice is one in which the supply chain is clinically integrated and part of the interdisciplinary partnership of patient care delivery. We want to put the patient at the center of what we do and ensure our decisions are best for the patient and their care. Doing this helps ensure broad support and buy-in and the achievement of the best possible outcome.
Young: Leading organizations keep the focus on what’s best for the patient in terms of quality and outcomes, while simultaneously having candid discussions about variation in care and standardization efforts driven by evidence. This allows the cost discussion to develop naturally as a byproduct of reducing variation to improve performance and patient outcomes, knowing that what’s best for the patient is ultimately what’s best for the hospital and health system.

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