Succeeding in Physician Preference Management: 5 Tested Imperatives to Boost Your Efforts

When I consult with healthcare organizations regarding their physician preference contracting initiatives, I often hear remarks such as "We haven’t been successful in physician preference contracting because we can't get our physicians to cooperate." Sometimes, that lack of cooperation signifies a lack of trust, understanding or aligned incentives. But most often, it's due to a lack of communication and an inconsistently applied or poorly defined process.

These five proven imperatives will help improve your success in physician preference management and improve your bottom line.

Many organizations feel communications with their physicians are good, but are they? Often, supply chain professionals complain that their physicians are uncooperative, yet they never leave their office to visit the physician's workspace or attend physician meetings. To negotiate good physician preference contracts, it is vital to understand the product's purpose and the physician's need for the product or service.

Having crucial conversations with physicians around these issues will surface important facts. Their needs and preferences will likely involve patient outcomes and safety, perceptions of patient interests, their own experience, their comfort level with the product or service, the supplier's support and their medical training - not the cost of the product or service, how difficult it is to procure or primary concerns for supply chain staff. In addition, communication with physicians must be in a language they understand. Speaking with physicians in supply chain jargon – "duel source prime contract," for example – simply won't achieve the desired outcomes.

It is important to provide an avenue for physician feedback throughout the contracting process. This involves gathering physicians' input before the bid process begins, sharing information gleaned during the bid process, discussing available options and implications and working with the physicians to develop an action plan to implement the contract(s).

To effectively build trust and credibility for your physician preference contracting process, you must have a well-defined, consistent and transparent process that is applied uniformly across the organization. Consistency in communication, product research, product evaluation, analysis and implementation is vital. Transparency will assure that physician stakeholders are aware of the initiatives that are underway as well as where each initiative resides in the process. Finally, to be viewed as credible, the process must be equitably applied across all physicians.

Physician champion
A physician champion should be enlisted for each physician contracting initiative. The physician champion should be someone who is both a subject matter expert and is well respected among his/her peers. In addition, he/she should be aware of the organization's financial goals and understand the rationale for the initiative within the financial framework.

To help align incentives between physicians and the healthcare organization, some organizations are beginning to adopt a process known as economic credentialing that can be used when recruiting a new physician and when evaluating privileged physicians.

Economic credentialing involves physician profiling that compares physicians to their peers relative to their supply spend for a particular procedure. Physicians receive a chart that compares their average cost per case to their peers' cost per case. This process often spurs conversation between specialists regarding procedural differences. The information can also be used as a basis of discussion during the annual review of the physician.

For physician recruitment, economic credentialing involves determining the physician recruit's product use preferences compared to the hospital's product formulary. This information becomes a valuable component in the negotiations for the potential recruit and provides insight into increased costs the hospital could incur.

Executive support
One of the characteristics that successful physician preference management programs share is top-down support. Even if there is a well-defined, consistent and transparent process, an identified physician champion, and effective accountability and communication measures in place, a contracting initiative can fail without executive level support.

Commitment from executive leadership is crucial for success. Executives who understand and respect your processes and the value they bring to the organization will be more likely to support the program. Many organizations have instituted an executive oversight team or executive sponsor to help with this challenge.

For hospitals to succeed in this new world of healthcare, they must begin to aggressively pursue successful physician alignment activities. These five imperatives provide an excellent way to begin and sustain the process.

Ms.Tyson works with a team that provides hospitals with expert consulting and specialized software services that optimize cardiology, orthopedics and spine service lines. She has 25 years of cardiovascular, clinical and management experience and has consulted with more than 150 hospitals and healthcare systems throughout the United States.

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