Supply Chain Management and the Role of Physician Leaders

Host Mike Sacopulos discusses supply chain management, from the perspective of the physician, the institution, and the patient, with Jimmy Y. Chung, MD, MBA, FACS, FABQAURP, CMRP, Chief Medical Officer of Advantus Health Partners (a subsidiary of Bon Secours Mercy Health) and a board member of the American Association for Physician Leadership. Dr. Chung has spoken at conferences around the country as an expert on clinical integration of supply chain and development of physician leadership in optimizing the cost, quality, and outcomes of healthcare.

“Physicians play an important and critical role in the management of supply chains,” says Chung.  In this podcast episode, Chung describes the lessons learned through the COVID-19 pandemic, efficiencies and costs savings that can be gained, and tactics for aligning with physicians for the safety of patients and improved patient outcomes.

This transcript has been edited for clarity and length.

Mike Sacopulos: An army marches on its stomach, Napoleon Bonaparte was alleged to have remarked. In the same vein, healthcare providers marched forward in PPE. Supply chain problems have disturbed healthcare in recent times. The pandemic and its wake have taxed the supply chain. Physician leaders have been called upon to wrestle with supply chain issues in novel ways. Today, we will hear from one of those physician leaders. Prepare to learn from the voice of experience, next on SoundPractice.

Jimmy Chung is Chief Medical Officer of Advantus Health Partners. Dr. Chung is a practicing surgeon. He is chair of the Association for Healthcare Resources and Material Management Advisory Board. Dr. Chung is also on the board of the American Association for Physician Leadership. Jimmy Chung, welcome to SoundPractice.

Dr. Jimmy Chung: Thank you. It's a pleasure to be here.

Sacopulos: We're thrilled to have you. Dr. Chung, can you explain your roles in your health system, the hats you wear related to supply chain management?

Chung: I'd be happy to. As you mentioned, I'm a board-certified general surgeon for about 22 years now. For the past 10 years or so, I've been in an administrative role focusing on what we refer to as supply chain, but also really thinking about how we manage resources and incorporate best practice into our clinic clinical services so that we can reduce waste and maximize the value of care being provided to our patients. And so, my current role, which actually, to be honest, I started just over a year ago, is Chief Medical Officer for Advantus Health Partners, which is a supply chain solutions company that was spun out of a large integrated delivery network called Bon Secours Mercy Health. Bon Secours Mercy Health is a 50-hospital system based in Cincinnati. They have spun out several of their shared services to become commercialized and provide services for other health systems.

And so, supply chain is one of them. While being entirely owned under Bon Secours Mercy Health, we are a supply chain solutions company that is now offering solutions for other health organizations. And my role in that company is to drive the clinical strategy and alignment to ensure that we create the best value for our offerings and to ensure that we're aligned with the clinical strategies for our customers. So, it's both a business-aligned role as well as a clinically-aligned role. Previous to this, I played a similar role for Providence, which is another over 50-hospital organization that's based in Seattle, Washington. Over there, I did a similar role for supply chain, but also led the perioperative service line. So bringing that level of expertise to my current role.

Sacopulos: Well, certainly it's been an interesting, if not challenging time when related to supply chains. What's the status? And I hesitate to use the term “post-pandemic” with supply chains in hospitals. During the height of the pandemic so much of the news was focused upon PPE, maybe you can talk about how things are looking for the winter of 2023.

Chung: I think we definitely learned collectively as a health system, we learned a lot about supply chain and how we reacted to the shortages that became very apparent during the pandemic. To be quite honest, I think the general agreement is that the supply chain responded just as it was designed even though that it appeared to have failed from the clinician perspective or the provider perspective, it was actually not designed to be able to respond to a pandemic. And the response that humans often have when there is a shortage, which is irrational buying and dealing with these shortages that were really unpredictable. And so I think we have learned from that, we've also learned that it is important to enroll the expertise of physicians and clinical leadership into supply chain. We actually did a study on this. One of the groups that I've worked with that showed that most of the large organizations that experienced shortages during this time benefited significantly from having a physician leader within supply chain to help guide some of the allocation and appropriate utilization of PPE during that time.

And so coming into the winner of this year, I think again, we have to worry about the potential flu epidemic that could occur as well as dealing with various surges in COVID cases that may occur. And especially now that I think people have moved away from using masks and social distancing outside of healthcare facilities, we may see an increase in COVID cases as well as flu cases. From a supply chain perspective, I think we've learned that appropriate utilization and evidence-based use is what was critical to ensure that everyone was protected. And now, by adjusting the way we work with our physicians and clinicians, and ensuring that we have actual stockpiles of the PPEs as we are going to need them, and also working with local as well as the manufacturers and supplier community a little bit better, I don't think we'll have a PPE issue with the current state of COVID diseases that we have in place.

And so I think where our utilization is better, I think our preparation is a lot better and our communication and partnerships with our vendor community is also a lot better so that we're more properly prepared for what's coming.

Sacopulos: All of that sounds like good news and lessons learned. You mentioned this a little bit, but I'd like to know more about formal roles that physicians can play in health systems or hospital supply chain departments. Could you talk a little bit more about that please?

Chung: I think it's a very broad and controversial topic in which that physicians traditionally have been taught to honor the doctor-patient relationship, and that we are ultimately responsible for making the decisions that we think is best for our patients. We're not necessarily trained very well, to be quite honest, to work as part of a team or to collaborate with others. I think most of us physicians have that as something that we think we're good at. We think that we're good at teamwork, and there's actually some studies that have shown that disconnect of what physicians believe and how we're actually perceived. Physicians often think that we're good team players, whereas our coworkers perceive us as poor team players. It's really fascinating to see that. While we are trying to do what we think is best for our patients, so is everybody else; the hospital administrators, the CMOs, the CFOs, the chief nursing officers, they're all trying to do what we think collectively is best for our patients.

What often happens in the world of supply chain is that surgeons, in particular, have been trained to use certain products over their training period that we think works best, and we think works best, meaning in our hands, we get the best outcomes because we've trialed a number of different products. And depending on where you were trained and what the circumstances were, we all may come to a different conclusion as to what products work best for us in our own hands for our patients. For many years, hospitals were open to letting the surgeons choose what they want to choose and what they think is best for their patients. In those years, we didn't have a whole lot of data. We relied on what physicians told the hospitals, we relied on our own experience that physicians and surgeons like myself have experienced and thought that that's what we would rely on.

But as we collect more and more outcome data and look at data registries, and we start looking at the cost component of value, value meaning the components are quality and outcomes over cost. As we start getting more data for the cost aspect of the value of the care that we provide, we realize that there's a significant amount of variation there and variability in how much the procedures have cost the system and the patient, regardless of the quality or the outcomes that the patient experiences. This variability then leads to waste. It also leads to potential patient safety issues. If you have, for example, 10 surgeons doing things 10 different ways with 10 different vendors, that's 10 different ways that the staff has to learn how to manage the patients. And so there's a significant risk there for potential error that could harm the patient. Not to mention just even the operational inefficiencies that's caused by too many different care pathways and so forth.

So, starting from the way physicians manage illnesses, manage patients and perform procedures, diagnose procedures to the decisions that we make for the products that we use, the way the products are used, the way we then work with the product suppliers and vendors to maximize our value from them, there's a significant amount of variability. And these are all variations that actually are created by physicians and their preferences. And so one of the things that I focus on now is: how do we reduce the importance of preference to rely more on data and evidence? Because I think in the end, even though physicians do have their preferences, if we had reliable data and evidence that can teach physicians what is actually the ideal way to take care of patients and choose products responsibly and utilize resources and products responsibly, then I think physicians will gravitate towards better value.

And we just have to figure out how to do that as best as we can so that physicians are getting the message that we're actually all doing this together for the best outcomes and value of the care that we provide for our patients, as opposed to the message that physicians often get from administration, which is we're trying to save money and cut costs, and therefore you must use what we tell you to use. And that's obviously not the message that we want physicians to hear, but I think unless we're aligned and we have appropriate communication, that's the message that they're going to hear. And so that's an area we have to work on.

Sacopulos: You've really anticipated my next question because it relates to messaging, about how should supply chain leaders communicate with physicians. What do you find as the best method of communication?

Chung: A couple things. One is, again, having a physician leader as part of your supply chain team is pretty significant. And that, again, the study that I referred to earlier showed that those hospitals that employed a dedicated role such as medical director of supply chain, which is actually now becoming more popular, tend to have more success in communication. And this was during COVID, so we clearly needed good communication, and so tended to have more success in communicating with their physicians for a success of their initiative. And that carried on beyond just the PPEs and the pandemic or getting a physician to work together under that physician leadership. I think that's a pretty critical aspect of a successful communication plan. The other is to be very forthright and transparent. We want to provide all of the insights and all of the data that physicians can use so that we don't come off as trying to hide behind a hidden message of any sort.

For example, if we're going to speak to physicians about an initiative where we want to reduce the number of suppliers in order to reduce waste and cost, then we need to be very honest about that, to say the primary goal of this is to reduce cost while not affecting quality. Sometimes I think some supply chain professionals approach physicians with the message that we're trying to improve quality, which in essence, even though that may be an ultimate goal, I think if we use that approach without actually being honest in saying that, "Yes, but really what we're trying to do here is to improve efficiency and cost." I think the physicians may see that as being somewhat disingenuous. If we say, "Well, we're going to improve quality, but we don't really have any data to show that." Then that's not going to be very helpful. So again, physician leadership, and second, transparency and being honest about how we want to approach these initiatives, I think, is going to be the most successful key points in communicating with our physicians.

Sacopulos: It strikes me that physicians have a good bit to gain too. And we've been discussing this more from the point of view of the health system and communicating with physicians, but what do you believe physicians gain by working with supply chain teams?

Chung: I think that's another very important point, that physicians may need to have a better understanding of just thinking outside the box. Because the initial response that we all get after speaking to physicians about a particular supply chain initiative is, "Well, what's in it for me? You want me to change, what am I getting out of this?" And so supply chain organizations or supply chain professionals have really struggled with, "How do we prove value to the physicians?" While in essence, a lot of the physicians are being asked to change their practice. And so sometimes there have been some innovative ideas through gain sharing or shared savings programs. I'm not necessarily a big fan of those because they're not necessarily sustainable. And also, I think financially incentivizing physicians is both, again, not sustainable, and secondly, it doesn't align to the values and the goals of the organization necessarily. And it could potentially lead to some regulatory oversight that could be somewhat tricky.

The messaging that I think is more important to the physicians in terms of, "Well, what's the value that they get from working with supply chain?" Is that number one, they get to participate in deciding on what the best way to take care of a patient is. Again, if you have 10 different ways of taking care of a patient, not just from a supply chain perspective, but from a care pathway and the diagnostics and treatment perspective, I think we all want to be able to provide the patients with the best experience. How do we participate in creating that experience for the patient? And I think knowing that my patients will go through a much more predictable and reliable and consistent experience is something that's meaningful, at least to me as a physician, and I would think that for most physicians.

Secondly, when we remove inefficiencies and reduce cost and reduce waste from a hospital system, the system itself becomes more efficient. And so not only would you see, for example, as a surgeon, a reduced cost for products, but it will translate to better efficiencies in the OR environment, the operations. You'll see better management of the staff and of the block times, and you'll see improvements in first case on-time starts and turnover times, et cetera, as part of an overall process improvement. And having the physician be a part of that process, I think, is pretty important. And also as a physician, you would enjoy working in an environment that's much more efficient and cost-effective. Also, indirectly, you'll note that when a hospital becomes more successful financially, as well as providing good care that results in good outcomes, then your hospital will be able to continue to take care of the patients that you want to bring there.

And so I think the mindset for the physician has to be that we have to get out of that us versus them type of mentality and start recognizing that you are both part of the problem as well as part of the solution. And once you have that mindset, then it becomes much easier to buy in to the process. And you might not agree a hundred percent with everything that the hospital's trying to do, but as being part of a conversation and being involved, you'll definitely have a lot of benefit that you can gain as a physician and provider.

Sacopulos: Well said, Dr. Chung. Time's coming close to an end, but we've looked at supply chain from the point of view of the health system, and then your great answer in terms of looking at it from the physician's point of view. I guess I'd like to conclude by talking about it from the patient's point of view. And it's been described that patients benefit from strong supply chains, which promote better outcomes, reduce length of stay in institutions, could you expand a little bit upon this?

Chung: Absolutely. I think going back to what I said earlier about the sanctity of the doctor-patient relationship, especially with the new generation and perhaps with the older generations as well, I think that's more of a concept for the physicians than it is for the patients. And again, with my personal experience of seeing patients for a couple of decades, I think the impression that I get is that what patients really want is security and consistency and reliability in the care that they receive. We have to start thinking of patients as consumers and customers. And I know that in the medical field, physicians have been long ingrained to think that the term customer is somewhat of a demeaning term that diminishes the role of the patient as well as the physician. But I actually think that the term customer elevates the patient into a level that gives them even more rights and more expectations.

And so, while a patient certainly is a patient, they're also a customer, just like an airline passenger is a passenger, but they're also a customer, which means that as patient-customer, we should certainly honor their expectations of getting good service. And good service means that it's reliable, that it's easy, and that they should expect consistent results. In the world of healthcare right now, we are not at that level yet where we can deliver consistent results. Patients still have to shop around for who they think is the best surgeon or who they think is the best hospital. That shouldn't be something that we should burden patients to do. Just like if you were to schedule a flight and you don't have to worry about the safety record of any airline or any particular airport or any particular pilot, that should be the same for healthcare where a patient who needs surgery should be able to determine where they want to have the surgery and by whom that they need, regardless of any concerns about quality or outcomes, that they should be able to make those decisions based on what's important to them.

And in a population, it shouldn't really matter where you have your surgery or where you get your care because we should have standards that ensures the patient that you'll get the highest quality care and the best outcomes consistently regardless of where you go. And so I think for them, it's really less important to them from a supply chain perspective what product a physician happens to choose or use during the surgery than it is more about what's really important to them. And so the physicians, I think we need to start thinking more about that as the primary driver for what we choose and which vendors we work with as opposed to relying on our own preferences and thinking about, "Well, I know everybody else uses brand A, but I choose brand B because that's important to me." And I think we need to start getting away from that to really put the patient in the center.

Sacopulos: My guest has been Dr. Jimmy Chung. He's the Chief Medical Officer of Advantus Health Partners. Dr. Chung, thank you so much for being on SoundPractice.

Listen to this episode of SoundPractice.