Innovative product selection in a value-based health care organization

Sande Irwin, MD

How the Kaiser Permanente National Product Council leverages physician expertise to optimize patient care

To learn more about how physician leaders like Dr. Sande Irwin contribute to the quality and affordability of patient care at Kaiser Permanente, join us for a live chat on Thursday, August 29, at 1 p.m. PT. Register now to reserve your spot. 

As a value-based care organization built on patient-centered, evidence-based practices, Kaiser Permanente has developed an innovative way of ensuring that clinicians have ready access to high-quality products needed for excellent patient care. The physician-led National Product Council is a structured partnership between clinicians and the Kaiser Foundation Health Plan and Hospitals Supply Chain Services organization that ensures the clinical quality and value of products, devices, and clinical systems used in care delivery. The Council is essential to the evidence-driven procurement, deployment, and appropriate use of products and technology across the system. It functions as a steward of our patient’s resources and sets a standard for quality, affordability, and industry-leading supply chain management that is truly unique in the health care field. 

How physician-led product selection impacts quality of care and cost-efficiency  

To many people, innovation in health care means using new technology, new implantable devices, and cutting-edge advancements like artificial intelligence. Innovation in how we vet, select, source, and implement these technologies might not sound exciting, but it is equally important. Clinical decision-making drives product selection and utilization. Clinician involvement in selecting products enables the establishment and maintenance of standards that can be used to negotiate lower costs. This synergy between clinical and supply chain experts is the most effective way to achieve both price and utilization savings.

The choices we make have a significant effect on patient care quality. As doctors, we all want to have ready access to the right tools for our patients. We also know that the newest product on the market isn’t always the safest or best option. That is why subject matter expertise and assessment is crucial in determining which products are supported by evidence and meet the clinical and technical requirements to yield the greatest benefit to patients.

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How we collaborate to select the best products for patients 

Kaiser Permanente’s integrated structure enables the National Product Council to bring together Permanente physicians with Supply Chain Services and Health Plan business partners to guide the selection, contracting, and management of medical products and devices used across our hospitals, medical facilities, and in the homes of our patients. The Council comprises more than 790 members — 550 of whom are physicians and other health care professionals, all volunteers — across 80 specialty sourcing teams who review data from clinical evaluations and provide input on the selection of products. Our supply chain partners lend their expertise in negotiating the price and contract requirements for any given product or service and management of the resulting supplier relationships. This includes partnering with suppliers to establish reliable, environmentally preferred, and mutually beneficial purchasing solutions.

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Our value-based model of care embraces medical evidence, fosters physician collaboration, and uses technology to improve outcomes. In line with this overall approach, the National Product Council is built on what we call “value-based use,” anchored by four principles: 

• Quality – the selection of the highest quality product via a thorough and robust review of the category  

• Outcome – includes improved patient outcomes, improved service, assurance of supply, and inventory stocking 

• Consistency – to minimize practice variation across the organization 

• Alignment – the simplicity and efficiency of managing fewer suppliers 

Here is an example: In 2019, the National Products Council and IV Sourcing and Standards Team, in collaboration with Supply Chain Services, Pharmacy, Nursing, IT, and Health Technology Management teams, launched an enterprise sourcing initiative to identify a new standard for large volume infusion pumps. This work was initiated due to several recalls with the existing pump platform at the time.

The teams collaboratively selected a new pump platform based on ease of use, safety, and competitive cost. This contract allows Kaiser Permanente to standardize care into a single drug library, enhancing operational efficiencies and patient safety. The national standard was implemented enterprisewide, resulting in nearly 30,000 large volume pumps in use across the organization, to drive high-quality care as well as affordability for our members. The decision represented a 47% reduction in category spend derived from negotiated pump costs and rebates over a 7-year total cost of ownership model.

3 key takeaways to inform selection of high-quality products  

While Kaiser Permanente’s unique value-based model and scale enables us to create and operate a governing body like the National Product Council, there are key takeaways that could inform how other organizations think about how they manage their supply chain:

• Managing the supply chain requires a collaborative, across-the-organization approach that includes clinical, operational, and business functions in decision-making.

• Physicians need to be included in the product sourcing and selection process to not only achieve buy-in and acceptance, but to build trust.

• Decisions should be driven by clinical evidence and utility, and not solely by cost or convenience.

As a physician, how medical products and technology reach my hands is not something I want to have to think about when I’m with a patient. The National Product Council frees me to know that I am using evidence-based, clinically appropriate products that help me deliver high-quality, high-value care to my patients.

Sande Irwin, MD, is a head-and-neck surgeon at Northwest Permanente and chair of the Kaiser Permanente National Product Council, which provides clinical oversight of the medical products and technology.