US doctors unhappy about procurement's growing influence

19 June 2015

The increasing influence of procurement professionals over purchasing decisions is leaving some US doctors increasingly dissatisfied, according to research.

A report from Bain & Company, found physicians in management-led organisations are less satisfied and less aligned with their employers.

The report, Frontline of Healthcare, surveyed more than 600 US doctors across specialities and 100 hospital procurement administrators.

It found only around a quarter of physicians working in management-led organisations are likely to recommend their organisation to someone else as a place to work or receive care, compared to more than 40 per cent in physician-led organisations.

Bain said US healthcare delivery was fundamentally changing as physicians increasingly move to management-led organisations, giving procurement officers growing influence over purchasing decisions, and providing physicians the increased sustainability they seek.

However, management-led healthcare organisations are struggling to balance administrative and physician input on decision-making. The percentage of physicians reporting a personal responsibility to control costs has more than doubled from a decade ago, from 38 per cent to more than 80 per cent, according to the research. Only 20 per cent of surgeons said they agree or strongly agree they have complete discretion over decisions about purchases of medical devices, it found.

Physicians also felt their discretion over drug prescriptions was diminishing, the report said. Of those questioned, 65 per cent said formularies - a list of approved medicines - limited their prescribing decisions, while slightly more than half felt formularies limited their ability to provide quality care.

Surgeons and procurement officers overwhelmingly agreed quality and clinical evidence are the most important purchasing criteria. But they differed on the importance of price, with slightly more than half of surgeons believing that lowest price should be an important criterion, compared with nearly three-quarters of procurement officers.

Report co-author and leader of Bain's healthcare practice in the Americas, Tim van Biesen, said: “It's important to acknowledge that many management-led organisations are leading the charge in transforming the care model when it comes to use of treatment teams, electronic medical records and treatment protocols.

“Doctors often join these organisations for career stability, but those benefits can come at the expense of their autonomy. The trade-off is that physicians have more stakeholders influencing care protocols, compared to physician-led environments.”

Bain said the research suggested that management-led organisations must create better alignment between physicians and procurement departments, which must learn to balance between clinical and economic priorities.

The research also found the role of sales representatives as a highly valued source of information on new products was diminishing in a number of specialties, as doctors increasingly rely on manufacturer websites, academic journals, and conferences.

Bain concluded as systemised care spreads, procurement-driven consolidation of preferred vendors would increase and squeeze out niche players.

“The winners will be the pharma and medtech companies that have a deep understanding of the competitive landscape and can develop flexible models that solve for the different ways that physicians and procurement officers approach purchasing decisions," said Josh Weisbrod, a partner in Bain's healthcare practice and the report's co-author.

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