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Integrated supply chain helps create value in health systems

Stephen Padilla
17 Oct 2019

How do health systems create value? This is the question posed by Dr Anne Snowdon, professor of strategy and entrepreneurship at Odette School of Business in Canada, at the recently concluded Asia Pacific Conference of the Health Information and Management Systems Society (HIMSS) 2019.

One way of creating value is through a clinically integrated supply chain, in which tracking and traceability of products, care processes, provider teams are all linked to individual patient outcomes.

“It’s essentially automating the clinical environment, mobilizing data, so that that data gets analysed in real time to inform both patient and family decisions, [as well as] clinical decisions,” Snowdon explains.

A 2-year study by the International Consortium of Journalists on implant files has found a total of 83,000 deaths related to medical devices from 2008 to 2017, including 1.7 million injuries due to device failure and 500,000 “explant” surgeries. [https://www.icij.org/investigations/implant-files]

“Here’s the challenge: There’s no health system in the world that today can track and trace and know exactly every individual patient that received one of those recalled… products,” Snowdon says. “[T]he traceability globally is going to become increasingly important for health systems given the level of product failure and challenges we are seeing.”

Thus, one of the key issues on creating product value in health systems is understanding what products, devices, implants [and] care processes are working best for which patients. Supply chain management aims to address this challenge.

“The way to think about it is a data infrastructure in clinical settings that helps clinician teams automate that environment, makes data and information available to them in real time, [and] removes that challenge for physicians and nurses to run and look for information they don’t have,” Snowdon says.

Four dimensions are key to a clinically integrated supply outcomes model, namely automation, clinical integration, data analytics and leadership, according to Snowdon.

Automation involves capture of data at point of care, automation of inventory management and tracking of adverse events. Clinical integration includes standardization of products and care processes, value analysis, automated alerts at point of care, and cost and outcome data, which inform decision on value, procurement and clinical best practices.

Data analytics, on the other hand, transforms data into knowledge and alters clinical settings from “reactive” to “proactive and predictive.” In terms of leadership, an integrated supply chain creates transparency across the organization. Thus, it becomes a strategic asset that “brings the entire organization together.”

Snowdon proceeds to impart the impact and value of an automated supply chain infrastructure in 10 North American hospitals.

Based on supply chain data in these hospitals, the following performance metrics saw improvements within 12 months: clinical engagements in decisions (55–80 percent); orders, replenishment, stock taking (36–78 percent); stock-outs (90–98 percent); inventory value (20–53 percent); expiries (37–75 percent); and expense write-offs (50–63 percent).

Finally, Snowdon claims that automation ultimately results in the creation of artificial intelligence and predictive algorithms, which predict best outcomes for patient segments at the lowest cost, identify best product performance predictive algorithms to reduce risk, and inform care decisions.

“That is how we create value,” she says.

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