Why do supply chain teams turn to a data-driven, platform-based approach for physician preference item (PPI) sourcing? Multiple reasons, as this article will explain:
- Establish common ground across stakeholders through trusted data insights
- Practical means to ease hospital financial pressures
- Earn support of clinicians for savings initiatives and standardization
- Flexibility to prioritize and customize spend management projects
- Increase operational efficiency through digital process
- Prioritize and accelerate PPI contracting opportunities
- Free staff bandwidth for additional sourcing events and other work
Better Positioned for More Contracting Strategies
Accurate, comprehensive data is essential to making the best possible decisions regarding implant contracting strategies in general. With a flexible, data-driven platform, teams are better positioned to leverage typical contracting strategies like these:
- Capitated or system pricing
- Rebates for market share or sales
- Volume based pricing discounts
- Limiting vendors
But first, let’s look at obstacles that get in the way of PPI sourcing in the first place.
Do You Struggle with These PPI Sourcing Problems?
Managing complex PPI master data remains a challenge for healthcare organizations that need the information for contract negotiations and reducing clinical variation. Working with PPI data gets tough and messy fast, and inaccurate or missing information negatively impacts sourcing processes and contract outcomes.
Problems stem from:
- Lack of data management experts
- Lack of trusted data sources
- Lack of single source of truth
Complex Clinical Relationships and Complex PPI Categories
Physician Preference Items make up between 40 to 60% of a health system’s supply budget, but clinicians don’t always make their implant choices based on cost. This makes it harder for supply chains to standardize on certain vendors for better pricing. Often compelling data stories provide the only common ground in PPI savings initiatives.
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To appeal to tough clinician audiences, sourcing must manage data about complex medical device categories like the ones below.
- Endomechanical
- Surgical Energy
- Left Atrial Appendage (LAA)
- Cardiac Assist Devices & Ventricular Assist Device
When clinicians have strong preferences in these “big ticket” categories, it takes equally strong evidence to convince them to support change and reduce clinical variation. But finding that evidence is a Catch 22 that unprepared supply chains can’t overcome without a digital platform.
Seven Benefits of Using a Platform for PPI Sourcing
When the supply chain team drives sourcing events from a spend management platform, lots of benefits can accrue. This list gives an idea of what to expect from a robust system for PPI sourcing.
- End-to-end control and visibility - From a central dashboard, users manage data, conduct spend analysis, identify opportunities, run projects, track savings.
- Seamless digital connections with medical device suppliers - Providers and suppliers engage over neutral analysis and automated bid processes.
- GPO-agnostic - 100% focused on healthcare, with some platform functionality even available to suppliers without charge.
- Teams work smarter and faster - The more the platform is used, the more efficiency and ROI are generated.
- Sourcing and spend management at scale - Platform should work across contracts, facilities, multiple PPI categories, and thousands of vendors and medical devices.
- Cloud-based platform - Up and running without any heavy installation, additional system architecture or extensive IT support.
- Easy onboarding puts platform to work fast - Most users should be able to review results within a few days. Success is assured by expert support, custom reporting, and regular reviews.
Selecting the Right Platform Model for PPI Sourcing
The ideal platform for scalable PPI spend management provides an end-to-end environment for engaging healthcare teams, suppliers and clinicians. Multiple solutions and services must be integrated on the platform to create the robust environment healthcare sourcing needs.
- Data Enrichment - Foundation for trusted conversations
- Analytics Tools - Clear insights for good decisions
- Strategic Sourcing Services - Integration, efficiency and savings
Through connected solutions and people, a complete platform environment should support all the functions needed for data-driven PPI sourcing.
What Functionality Can Be Enabled through a Platform?
There's a lot to consider when evaluating a platform for PPI sourcing, but many sourcing professionals aren’t fully familiar with what’s now possible with platform technology.
Use this list as a guide for what capabilities to expect from a truly comprehensive platform for spend management:
- Master data management, cleansing and normalization
- Market data enrichments and multi-dimensional classifications
- Mapping to product master sources
- Construct logic and surgical procedure enrichments
- Customizations and integrations
- Customizable category analytics and savings recommendations
- Insights to drive physician engagement and support
- Construct and component-level procedure analytics
- Multiple configurable spend views
- Utilization, contract and rebate analytics
- Savings forecast and pipeline management
- RFP and supplier bid management
- Strategic sourcing project management
- Bid modeling and scenario planning
- Savings realization tracking
If your solution for PPI sourcing doesn’t match up with this list, it might be worth looking into what Curvo state-of-the-art sourcing and spend management technology can do. Reach out for a demo if you’re ready to take the next step. We’ve also gathered a few more resources to help you and your team better understand this important topic.
Other Useful PPI Resources for Healthcare Sourcing Teams
Four PPI Spend Best Practices in Action
Learn about four essential practices in controlling PPI spending:
- Leverage and Negotiating
- Improving Standardization and Communication
- Including Physicians in Decisions
- Incorporating Technology
In addition, the article draws on the story of a large non-profit health system that actually put these best practices to work. An outdated spend management strategy had held the health system back, and the vice president of supply chain was ready for change. Find out what happened next.
Master Data Management: Lifeblood of Healthy PPI Sourcing
Within the supply chain, master data management (MDM) is a critical element of physician preference item sourcing. MDM establishes a single master record for each medical device, compiled from internal and external data sources and applications. The information must be de-duplicated, reconciled and enriched to be a consistent, reliable source of knowledge for other uses. Because of the difficulties in this task, many sourcing teams use the data-driven platform approach described in this article.