Health Care Matters: Supply Chains In and Of the Health Sector

Abstract

Providing health care involves a complex enterprise, and the trade-off between quality and cost has been particularly stark compared to other industries. However, a recent focus on health sector supply networks is now producing significant innovations and improvements. This Special Topic Forum illustrates for the academic and practitioner community how health care supply chain research can benefit from our evolving understanding of supply chains and help push that understanding even further. We classify health care supply chain research into two broad categories-supply chain in health care and supply chain of health care-to set an agenda for future research.

Patient care effectiveness and financial outcomes of hospital physician contracting emphasis

“…In addition, since under high utilization environments, it is likely that hospitals have less bandwidth to monitor external service providers and effectively coordinate with them, the transaction costs and risks that come with contracting will be elevated at higher levels of utilization. Further, physicians working on contract have been observed to be less cognizant about the costs of supplies and materials they order for hospitals (Abdulsalam et al, 2018;Abdulsalam, Gopalakrishnan, Maltz, & Schneller, 2015). With less effective monitoring, contract physicians would be more likely to order expensive tests and supplies, increase transaction costs, and place additional pressure on hospital operating margins.…”

“…We believe this insight would not be possible with a singular focus on either the upstream or downstream consequences of physician contracting as has been the case in most previous studies. We, therefore, contribute to the healthcare literature (Abdulsalam et al, 2015;Chukmaitov et al, 2015;Dobrzykowski et al, 2016).…”

Getting closer by increasing distance: the dynamics of value creation spheres in health care logistics

“…The main difference between these research areas can be illustrated by using the terms patient logistics and non-patient logistics (Bamford et al, 2009). The division has been attributed to the complex nature of health-care supply chains and logistics in health services merely having a supporting role (Beier, 1995;Abdulsalam et al, 2015;Jarrett, 1998). However, the importance of material flows in health-care systems is gradually becoming recognized and the potential improvements that can be accomplished are gaining increasing attention (Landry and Philippe, 2004;Kumar et al, 2008;Kotavaara et al, 2017).…”

Do prices vary with purchase volumes in healthcare contracts?

“…Healthcare in the USA is a US$3.2 trillion industry (Speaks, 2016), yet it is often described by experts as a “cottage industry” due to the lack of maturity surrounding its contract management and supply chain practices (Abdulsalam et al, 2015a; Handfield, 2012). Research suggests that up to 40% of funds spent are non-value-added in nature (Schneller and Smeltzer, 2006).…”

“…We know we bought materials, but we are unable to trace it to a patient, and often cannot map it to a single unit cost that can be billed to a patient.Price transparency between healthcare providers and the suppliers of clinical products is hindered by multiple transactional levels across complex and poorly integrated information systems spanning the supply chain (GHX, 2016; Handfield et al, 2010, 2013). Lack of transparency is a function of poor data governance, lack of standards, and inaccurate spend data propagated by multiple parties in the supply chain (Abdulsalam et al, 2015a, 2015b; Johnston and Rooney, 2012). Hospital providers have almost no visibility to the underlying costs of their operations and their supply chains, a fact that is driven to a large extent by the structure of the industry itself (Handfield, 2012, 2013; Handfield et al, 2010; Welch and Handfield, 2015).…”