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As with the pharmaceutical supply chain, the healthcare supply chain has become increasingly patient-centered in recent years, helping to ensure successful outcomes while also bolstering relationships between various partners at every stage.
As COVID-19 continues to transform the landscape both domestically and globally, the U.S. healthcare supply chain has had to adapt in multiple ways. With manufacturers across the world racing to create a vaccine, questions of scale, distribution, and general preparedness are coming to the forefront.
Below, we examine some of the key features and recent trends in the health care supply chain, as well as its outlook for the future.
Key Trends in the Healthcare Supply Chain
The healthcare supply chain has become increasingly complex, involving many different actors across multiple locations. To better serve patients while boosting efficiencies, the industry continues to shift and adapt by tapping into the following trends and strategies.
Direct-to-Consumer Model
In the past few years, the consumer healthcare experience has come under increased scrutiny, as the traditional model of care has shown several areas for improvement. Adopting a direct-to-consumer (DTC) model has allowed many healthcare companies and organizations to interact directly with the patient.
As patients increasingly demand around-the-clock services, personalized options, and speedy delivery, more businesses are working to enhance connectivity and flexibility. With access to more data than ever, companies can now easily identify pain points in their processes and adapt to patients’ shifting needs.
Services such as telemedicine, for example, allow providers to evaluate patients remotely, often eliminating the need for in-person visits and enabling companies to sell direct through digital channels. COVID-19 has increased focus on such services, as patients seek treatment — whether for coronavirus symptoms or new or existing conditions — from the safety and comfort of their own homes. For COVID-19 patients, in particular, this can also provide serious cost savings.
Cost Transparency
Some healthcare organizations have also been placing more emphasis on cost transparency, using data to track and manage inventory and create better-informed purchasing contracts with manufacturers. With new insight into demand and consumption — rather than just purchasing activity — waste can be significantly reduced, product expiration virtually eliminated, and inventory streamlined.
Automation and radio-frequency identification (RFID) technology can further improve price-transparency efforts. It allows for streamlined, standardized physician orders and the capture of large volumes of data from an item’s barcode.
Most importantly, cost transparency can also benefit patients. In the traditional supply chain, multiple exchanges typically take place between suppliers and providers. This leads to continually increasing prices, with customers often left in the dark regarding what prices to expect and where they stem from. By increasing market competition, enhanced transparency ultimately provides customers more options to choose from for their specific needs.
For providers, offering a window into costs and quality can bolster their organization’s reputation while providing the information needed to accurately assess spending patterns.
As one supply chain analyst at a university hospital told NC State University’s Supply Chain Resource Cooperative said, “Data governance is at the heart of this issue. Health care providers need to refocus their efforts to focus on data as the defining component for building an analytics strategy that leads to better care, cost management, and revenue capture.”
Focus on Patient Outcome
As patient outcome increasingly becomes the focal point of the healthcare supply chain, clinical integration is aiding organizations in creating more collaborative, data-driven processes.
Including physicians in medical purchasing decisions, for example, can provide valuable insight into which supplies are being used, how effective they are, and whether more cost-effective alternatives may be available.
To harness the power of the huge amount of data already at their disposal, hospitals must find new ways to collect and assess this information in a way that allows for better decision-making without taking time away from physicians’ day-to-day work. Partnering with acute care providers can aid hospitals in closing up data silos between pharmacy and clinical systems and the supply chain.
For example, to ensure patients receive the care they need, when they need it, some organizations are focusing on becoming better prepared for regulatory shifts in the industry. By turning to different partners along the supply chain for guidance on potential changes coming their way, hospitals can prepare their business.
How COVID-19 Is Changing the Healthcare Supply Chain
As COVID-19 has brought existing challenges to the surface and forced healthcare organizations across the world to reassess the way they do business, important changes are being implemented and discussed. Not only will these help ensure a coming vaccine will be able to be manufactured, stored, packaged, and distributed efficiently, but they will also better prepare the industry for any potential disruptions down the line.
Increasing communication and collaboration between providers and suppliers, for example, is crucial for establishing well-laid plans for any future crises. More specifically, allowing states’ healthcare stakeholders — from hospitals to long-term care centers — to more actively collaborate with the federal government would give them more control over the distribution of supplies during an emergency.
A comprehensive system could then be established that lays out the most effective way to ensure products do not expire before use, replenish inventory automatically, and set pricing. To establish a reliable blood supply, for example, it’s recommended that supply chain professionals work closely with their clinical and laboratory staff in conserving and managing blood products post-outbreak.
Along with numerous other organizations, the American Hospital Association has offered its own recommendations for the U.S. healthcare supply chain.
Other experts have recommended the following key points:
- Creating a more agile supply chain for crucial medical devices such as ventilators.
- Reshoring drug manufacturing or developing a dual supply chain for pharmaceuticals in order to enhance the security of domestic supplies and reduce reliance on overseas operations.
- Maintaining and rotating an emergency stockpile of personal protective equipment (PPE).
Looking Ahead
As the healthcare industry continues to evolve, patients and businesses alike stand to benefit from an increasingly streamlined, transparent supply chain.
With COVID-19 bringing areas for improvement to light, supply chain partners will likely be moving quickly to implement many needed changes — helping to create a more resilient, adaptable chain for years to come.
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