Article | December 15, 2020
The use of technology in hospitals has been increasing for the last decade and at present, it has reached an all-time high. However, it may be surprising to realize that the healthcare supply chain management (SCM) area of hospitals has not fully embraced technology. According to a survey conducted among 100 hospitals recently, nearly half of these hospitals use less sophisticated/outdated tools or manual processes, such as Excel spreadsheets, to manage supply expenses, inventory, and other supply chain activities.
According to the Association for Healthcare Resource & Materials Management (AHRMM), healthcare supply chain management costs will surpass labor costs shortly for the number one position. But there is good news; similar surveys show potential for significant healthcare supply chain management cost savings. For example, an analysis by Navigant consulting estimates that, by standardizing and streamlining the healthcare supply chain management processes, hospitals can save an average of US$11 million per hospital or 17.7% annually.
What is Healthcare Supply Chain Management
Procurement, distribution, and movement of products and services from the receiving deck to the patient encompass the process of healthcare supply chain management.
There are a lot of challenges in healthcare supply chain management processes. The major issues include demand for specific types of product in inventory, hoarding of supplies, out-of-stock issues that may lead to expensive delivery charges, product expirations, unwarranted increase in inventory dollars based on demand, and pilferage, among others. These issues may contribute to out-of-budget supply costs.
Healthcare supply chain management is an extremely complex process. Poor product standardization, inadequate data reporting, a lack of automation throughout the process, and increasing regulatory requirements only add to the difficulties. Thus, an easy way to get rid of all these complexities is to incorporate advanced technologies in the healthcare supply chain management process.
Healthcare Supply Chain Management Technology
Advanced healthcare supply chain management technologies are developed to transform the supply chain process to a more efficient one by automating repetitive manual tasks in hospitals and other healthcare organizations. Minimizing waste, enabling timely data-based decision-making, streamlining inventory, and reducing labour, supply, and operational costs are the major benefits of healthcare supply chain management software.
There are mainly two types of healthcare supply chain management technology solutions, enterprise resource planning systems and niche healthcare inventory and healthcare supply chain management solutions.
Enterprise Resource Planning (ERP) Systems
ERP systems are not the best for healthcare supply chain management specifically because these systems are used in many industries. Also, the concerned vendors often do not have the required healthcare expertise. As this is mainly implemented by larger and non-healthcare related businesses, it may take a longer time to implement. Also, it requires dedicated customization resources. This makes it inflexible for the healthcare industry supply chain management.
Niche Healthcare Inventory and Supply Chain Solutions
This type is known as the best-of-breed healthcare supply chain management solutions. They provide healthcare-directed and flexible solutions as they are affordable and incorporate deeper industry knowledge. These systems can also focus on specific areas such as interventional medicine, surgery, and other healthcare departments.
Why Should Hospitals Invest in Healthcare SCM Technology
Although hospitals and other healthcare organizations have demonstrated excellent performance in fighting COVID-19, the pandemic exposed vulnerabilities in the present healthcare supply chain management process. Supply shortages, especially lack of personal protective equipment (PPE), highlighted how poor healthcare supply chain management affected healthcare providers. The underlying concern behind the supply shortage is that hospitals’ supply chains are not well prepared for the future of healthcare. Organizations are depending upon old models, which are not innovative, agile, or advanced enough to cater to the requirements of the modern data and technology-driven world.
Automating Healthcare supply chain management will be a major differentiator for hospitals at present and in future, impacting all aspects, including brand reputation, consumer trust, and quality of care. Healthcare leaders, such as organization heads and hospital administrators, require a new healthcare supply chain management system to deliver care at a lower cost. To realize this requirement, they have to make bold decisions and speed up the transformation of their healthcare supply chain.
Acceleration of healthcare supply chain management transformation will be grounded in many imperatives, which are related to process, people, and technology. The digital transformation focusing on these areas will fasten the long-term growth and sustainability of healthcare supply chain management.
Digital Transformation to Raise Healthcare Supply Chain to New Levels
The Healthcare industry has given importance, other than information systems and key enterprise technologies, to electronic health record platforms in the last decade. Currently, the healthcare industry is on the brink of a digital revolution. Several technologies, such as robotic process automation (RPA), artificial intelligence (AI), and machine learning (ML), are opening new doors for healthcare organizations to evolve to a level beyond anything previously imagined. It will surely affect healthcare supply chain management.
However, the healthcare supply chain has not yet kept pace with changing technologies. To create a fully developed supply chain, hospitals should find innovative ways to integrate their physical process with digital data. Hospitals should start using tools such as predictive analytics along with digital statistics and information to drive decisions.
Investing in this technology integrated healthcare supply chain management, hospitals, and other healthcare organizations will help achieve optimal benefits. However, it needs an efficient deployment of new technologies, such as the integration of ML and AI, and maintain a functioning healthcare system.
Collaboration Between People and Technology for Better Results
Years of operating in traditional systems has delayed the progress of healthcare supply chain management. As the consequences of running out of stock can be devastating in the healthcare system, leaders and clinical professionals have to look at supply chain differently. The COVID-19 pandemic has elevated and strengthened the necessity of better collaboration. Now leaders need to act timely to solidify these changes, brought out by the pandemic, to stop people reverting to behaviours that were problematic in the past.
Automation will make the future of the workforce and supply chain workflows more efficient. The greatness of the impact on future healthcare supply chain management performance depends upon the greatness of the automation of work. Hospitals should highly focus on technology to perform various repetitive tasks, including delivering patient food trays, gathering supplies and bringing them to caregivers, picking case carts, and transporting supply carts to storage rooms. Staff efficiency is increased, when repetitive tasks and predictable work are automated and performed by robots. This helps staff focus on more complex tasks that drive innovation and value.
Digital transformation occurs only when there is strong leadership and a conducive culture. Hospitals should realize the value of data in decision making and change their view about the supply chain leader. Modern healthcare supply chain management leaders are those who excel in education, governance, collaboration and communication, and change management. In hospitals, the supply chain management leader position should be elevated to executive level and they should be capable of using modern technologies for effectively handling the healthcare supply chain management process.
The Future of Supply Chain Operations
The sole aim of effective healthcare supply chain management has been finding the lowest cost products for the end-user without considering much about the profit of the manufacturer. The alarming product shortages and supply chain disruptions during the pandemic have changed that. Now, leaders are much more focused on how to diversify manufacturer product origins.
Technological advancements and digital transformation will encourage the efforts to evolve vendor and inventory management, which is evident in procure-to-pay strategies. In case of procure-to-pay strategies, hospitals can reduce cost and increase efficiency by integrating technology assistance in areas such as accounts payable, including invoice discrepancies, match exceptions, and placing purchase orders electronically.
In hospitals, healthcare supply chain management should evolve quickly to forecast and adjust the changing flow of patient volumes and care sites. Increased acute care in the home, utilization of telehealth, and remote patient monitoring will surely change demand for care facilities and supply demands from consumers. Efficiently catering to these requirements with the assistance of the latest technologies will determine the future of hospitals and healthcare supply chain management. In the healthcare supply chain management, technologies will play a vibrant role in boosting competence and reducing cost from now. Get yourself updated to avoid getting outdated!
Frequently Asked Questions
What is the value of supply chain management in healthcare?
The healthcare supply chain management process ensures the right time availability of medicines, maximizing patient care, minimizing inventory wastage, and minimizing human errors. Healthcare supply chain management ensures timely availability of medicines for all patients at right time at lower cost possible.
What are the 5 basic components of supply chain management?
The five basic components of supply chain management are plan, source, manufacture, deliver, and return. Through these five components of supply chain management hospitals ensure the availability of all the medicines in hospitals. Shortage of essential medicines and other articles brings total chaos to the system.
Why is Supply Chain Management important for a hospital?
Supply chain management is essential for hospitals and other healthcare organizations as it ensures the availability of medicines and medical equipment so that patients get access to all facilities in time. In order to keep a consistent patient experience, an efficient supply chain management is necessary for all hospitals.
Article | April 2, 2020
The rapid advancement of technology has inspired hope in the healthcare industry, promising to employ artificial intelligence (AI) and cloud-based data platforms in life-altering ways. Surgery assisting robots and miraculously accurate AI-based cancer diagnosis methods are a few preliminary examples of what the industry can expect. With all these great technological strides being taken, however, compliance can easily be left in the dust. And with COVID-19 pushing the limits of healthcare systems worldwide, it’s too easy for cybersecurity to become a lesser priority.The situation is bleak, with nearly 17,000 patient records being breached every day, according to Entech. Healthcare democratization is essential to fully harnessing the power of AI and other tech advancements on the horizon, which require compliant data distribution and the application of insights gathered from it. Healthcare institutions are struggling to not only meet basic privacy and compliance laws but have difficulty leveraging the large amounts of data that they store in a meaningful way.
Article | December 21, 2020
Yes, empathy has become a fad.
Connecting to another human is actually something cool kids do now. If a brand doesn’t have an impact model that includes a practical social issue, consumers tend to not take that brand seriously. In this case, empathy needs to be revisited beyond the trend itself for these strategies to have real, lasting impact.
Practical strategies around compassion meanwhile have similarly become an intrinsic part of social impact organisations. They have become so commonplace that prosocial behaviour has strayed into a kind of tokenism. It is common for instance for consumers to donate their hard-earned money to companies who focus their energies on trying to alleviate real-world issues.
The question then is whether this proxy for compassion isn’t in fact watering down human connections, as well as our positive impact on the issues business and organisations seek to solve with our help.
Postmodern behavioral science
If it is, then we must understand why and how to change that. This is where postmodern behavioral science provides a possible better alternative to social impact strategies. Postmodern behavioral science suggests that the current approach to understanding human behaviour lacks even a rudimentary understanding of empathy, defined in the area of social impact as a discursive strategy that allows us to feel what the group we are trying to help is feeling.
Of course, compassion has very close ties with empathy. Empathy is an innate ability we all have, one that we can learn to develop and fine-tune over time. It is our emotional connection to another human, though one that lies beyond our own ego. It takes the perspective of the person who is struggling and seeks to understand their life, their struggle, and their worldview. It also resolves to value and validate their perspective and experience — something that donating money to a social impact cause does not.
In its broader definition, empathy is a shared interpersonal experience which is implicated in many aspects of social cognition, notably prosocial behavior, morality, and the regulation of aggression.
Empathy has a host of positive after-effects when applied as an interpersonal experience. If a social impact organisation is preoccupied with raising capital, then it is likely to disregard the practical worth of empathy for those who truly want to achieve its mission.
One way that behavioral science can contribute is to utilise tools that can help augment the experience of those in need for those needing to understand those needs. Both AR and VR can help people visualise and follow the stories of those who require compassion. These create virtual environments for partners, governments, and consumers to experience with the people they seek to help.
But of course, much of human behaviour is geared toward seeking pleasant experiences and avoiding unnecessary pain. Our in-built hedonic valuation systems guide decisions towards and away from experiences according to our survival instincts.
This is precisely why business owners who want to encourage empathy in their customers go the easy route, but should seek a more participatory frameworks to inspire and provide experiences for those on board with a social mission.
Then there are issues like financial literacy in underserved populations, access to clean water, education for women and girls, and environmental conservation, to name a few of the problems that social impact companies are attempting to tackle.
If a company is trying to tackle an issue such as access to clean water, then rather than start there, it should first ask exactly how this issue arose and developed. It should question the beliefs that underpin this chronic social inequality, those that inform policies, practices, cultural taboos, and beliefs about water and people’s access to it.
To simply respond to an issue in its developed form is to leave it unfixed. We must be willing to reverse engineer the origins of that issue that got us to where we are. In other words, human behaviour is not the only component to consider in this.
The main behavioral framework public servants should take with them is to develop a nudge unit solely based on the relationship between behavioural science and technology.
This is mainly because technology is an inevitable part of how we now relate to one another. Immersive Compassion meanwhile should embrace tools like AR/VR that seek to create empathetic environments and valuable impact longevity.
To fully embrace empathy as an organisation is to create relevant and rigorous responses that go as far as to alter the infrastructure of its target goals. Optimising social impact comes down to optimising human experience.
Article | March 31, 2020
Almost all conversations about healthcare disruption focused on new entrants into the industry transforming parts of the traditional service model and taking market share. Politically, most of the conversation centered around whether we would dismantle the ACA, build it back up or move to Medicare for All. Despite all the noise about disruptors, politics and consumerism, I felt like incremental change was the most likely scenario. Although the industry had been changing – digital experiences and telehealth for instance – a revolutionary, wholesale change to our industry seemed far off to me. The odds of the system being truly disrupted – something like Medicare for All happening within the next decade – felt highly unlikely. And where are we know? It truly feels like there are forces brewing that could result in radical transformation and a complete, ground up rethinking of our entire system. As the COVID-19 crisis has unfolded, it has raised many serious questions that we’ll need to grapple with over the next 12 to 18 months. Where we land on these issues will have a profound effect on what healthcare in this country becomes for the rest of our lives.