Physician Preference Item Customization is More Important Than Ever
We all realize that our physician preference items (PPI) can represent as much as 40% of our supply spend, but despite our industry’s best efforts, over the last few years to hold our PPI costs down, they are still going up every year — not down.
The reason for this PPI inflationary spiral every year, even though most hospitals have slowed their PPI price increases, is two fold as I see it. The first cause of this PPI cost proliferation is that new technology is being introduced into our healthcare organizations faster than we can measure their efficacy. The second reason is that we aren’t doing a good enough job of “value justifying” what our surgeons are implanting.
What can you do about this? The first solution is very straight forward, every hospital, system or IDN needs to have a technology value analysis committee, with broad and deep physician representation, to evaluate and then select the most effective new technology that makes economic sense. Healthcare organizations that have followed this path have greatly reduced costly mistakes that are made when one or two individuals make — behind closed doors –these decisions on their high-cost/high-impact technology purchases for their healthcare organization.
The second answer to this challenge, and the most important in my opinion, is for you to CUSTOMIZE all of your PPI implants to the exact medical indications of all your patients. I can say this with full authority, since we have observed over the last 10 years that most hospitals are losing millions of dollars a year because their surgeons are selecting the highest cost implants without any regard to what is “medically indicated” for their patients. It’s like buying a thorough bread race horse that you only ride for weekend recreation. What a waste of money!
We can only assume that surgeons who insist on implanting these value mismatches are ignoring their patient’s medical indications by selecting their implants either out of habit, due to a sales rep influences or a lack of knowledge. This situation, we have found, can easily be remedied if a hospital employs a “PPI Medical Indication Checklist” to select the right implant for their patients.
To recap, our PPIs are the fastest growing and largest expense category in our supply spend and need to be controlled in an organized, systematic and scientific manner. Just ratcheting down your price at the pump won’t get the job done efficiently or effectively.
On the other hand, if you employ a filter (value analysis technology committee) to hold back your unnecessary and/or unproven technology expenditures and then customize your PPIs to their exact medically indications you will be going a long way to finally bending the curve on these considered necessary, but ultra expensive medical devices.
Filed Under: Healthcare Supply Chain • savingsblog
