Supply chain tip of the day: 3 pointers for a better value analysis committee

Rick Ngo, MD, a private practice general surgeon at Houston-based Southwest Surgical Associates, knows what it takes to manage a successful value analysis committee.

He is a current member of Houston-based Memorial Hermann Health System's supply chain subcommittee — the Memorial Hermann Physician Network — and served as the group's chair from 2011 to 2016.

Dr. Ngo shared the following advice for hospital value analysis committees.

1. Ensure all committee members disclose their consulting arrangements to drug or device companies. "A lot of physicians are on speakers bureaus or do consulting for certain companies, and that's fine — we don't discourage that," said Dr. Ngo. "We just want [their conflicts of interest] to be very transparent because we're often voting on these companies' bids."

2. When discussing a product or a comparison of products, evaluate safety and quality before addressing price. Oftentimes, hospital or supply chain leaders approach physicians, whether informally or through a committee, and immediately bring up the price of an item and the potential cost savings of switching to a different product, according to Dr. Ngo. Instead, leaders should focus on safety and quality when speaking to physicians, only mentioning cost savings as an added benefit.

3. Do not agree to an exclusive contract with a company. While many supply chain leaders seek to standardize physician preference items, Dr. Ngo warns against the practice of awarding one supplier an exclusive contract for a product.

"I understand there are financial implications, but I'm all about preserving physician choice for the benefit of the patient and physician," he said. "My opinion could be very different than another surgeon's on what's good. I want them to have a say and get that rare product they might be really passionate about."

Dr. Ngo recommends hospitals enter an 80 percent agreement with a company, leaving the other 20 percent for diversified products, since no company makes every product the best.

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