Conflicting Goals & Incentives in Healthcare Strategies Do Not Serve the Patient
??Angelique Weiley Vuilleumier??
DO YOU NEED A CONSULTANT OR MENTOR??? ??I help healthcare supply chain professionals advance w/o spending ?? on programs that don’t teach real ?? experience, & hoping ??others aren't too busy to teach!
I have been in healthcare for over 19 years. I started out my career on the distributor and manufacturer side of the industry and then moved to the provider side of the arena in 2010. For any of us in the healthcare industry, we all realize at one point-in-time within our careers that we are all here to serve the patient and provide the best care, at the best price, with the best safety practices, and the best outcomes.
Of course, with that as our strategy and goal as a whole, working together, we would obviously help to fix the healthcare crisis our country is in right now. When I talk about the country's healthcare crisis, I am talking about increasing costs of healthcare (In 1980, healthcare expenditures were $256 billion, according to the Centers for Medicare & Medicaid Services. In 2010, U.S. taxpayers paid nearly $2.6 trillion for healthcare services.) But unfortunately, from what I have witnessed over the years, that is not the case. We are not all on the same page with the same strategy and outcomes in mind. Anyone that is not in the healthcare industry reading this is very confused I am sure - this will be an eye-opener.
Who are the different parties involved in the healthcare stream? Well, here is a list:
- The healthcare provider itself (this includes the hospital, clinic, long-term care facility, the doctors, nurses, the dietician staff, supply chain staff, and other administrative staff, etc.)
- The supply manufacturer (this includes any manufacturer of any supply inside a provider facility including medical-surgical supplies, medical devices, equipment, pharmaceuticals, linens, food, IT supplies, and other supply needs, etc.)
- The distributor (this includes any organization that distributes supplies produced by the manufacturer, kit packagers, 3rd party logistics companies, etc.)
- The health insurance providers (this includes anyone providing health insurance coverage plans)
- Transportation companies (this includes any fleet of trucks involved in the delivery of supplies owned by the distributors, the healthcare provider, or 3rd party logistics companies)
- Group purchasing organizations - GPOs
- The government (this would include the Patient Protection & Affordable Care Act, Medicare, Medicaid, regulatory bodies like FDA, FTC, etc.)
So as you can see with this many hands in the pot, there are disadvantages that go along with the hands. First challenge is having multiple parties involved in some degree of supply chain, which adds to the costs and reduces profits to the provider and increased costs to the patient. Secondly, each party has its own incentives, goals, and strategies that do not align. Each party obviously needs to make money to stay operational. But then certain parties do what they can to fight any attempt to steer funds from their portion of the profits.
Each party has metrics and expectations they need to comply with contractually. These would include delivery timeliness, accuracy in reporting, accuracy in delivery, timeliness in payment, improvement in services, following of regulations, etc.
With the healthcare provider being at the of the entire chain of these parties, they have a huge weight on their shoulders to improve patient safety, increase patient outcomes, decrease patient bills, and improving overall service. My question is, with each party having conflicting agendas and unaligned strategies, how do we turn around our healthcare crisis?
To create a new culture inside of the healthcare industry, it would be important for all parties involved in healthcare to re-align their goals and strategies, and to figure out a winning solution for everyone involved while serving the patient and doing what is right. Any suggestions?
Dear Angelique, Thank you for your post. I empathise and share the same with you and on that note also working to figure out a way to provide winning solutions for everyone involved, in my case simply automating of the supply chain would save time and money and make at least 20% of spend immediately available for use in reducing costs and increasing efficiencies. The issue I have faced is lack of mindset in working towards something greater than oneself - I believe we live in an age of increased self awareness and it is important in how or what we do best within our own organisation to ensure we take into consideration how our needs and fulfillment of these fits in with the whole so the flow of input and output is seamless. Has been hard to find a way to get through as everyone is busy in how to improve their own organisation of the supply chain for themselves and individual parties that provide highest value to them, thus making themselves isolated. Each one doing the same creates pockets if isolated networks and hard to get them to talk to to each other. The area I am working on is Supply Chain Automation Service (EDI for Purchase to Pay/Order to Cash includes standard and consignment orders and useable across multiple sectors). Establishes and retains the identity of an organisation in its own right thereby retaining the isolation to itself while being able to interoperate with any other each party in the supply chain independently and improving own side connecting via a common infrastructure i.e. buyers, buying groups need not be insulated from the whole supply chain and have open access to any party or groups in the supply chain (one-to-any). For example in our case we found a couple of visionaries and forward thinking large and SME suppliers worked with us and took into considerations the whole (including SMEs) as an important part to consider in the supply chain. Other sectors being as important as the healthcare sector as they also supply to non healthcare (FMCG, also keepign in mind healthcare providers work more like the hotel industry consuming non-healthcare products e.g. food being around 70% of total spend, automotive, FMCG, Stationery etc). So far the success of the pilot to production for our founding subscribers has been great, they are reducing IT costs and improving efficiency and service, allocating savings to improvement in other areas and providing overall cost reduction in the supply chain with huge spill over benefits to the rest of the supply chain. Simply having added this layer of open-interoperability which has been possible using standards has helped us define the common requirements while connecting to organisations that have the old mindset of thinking based many to many dictated by purchasing power or power of having a large network to set their own terms and requirements, are automatically set up within the standards and canonical structure we have designed and without realising that in the end the basics functions that supply chain requirements generally really fall under universal principles and common data so whether an apple is green or red it's still an apple whether it' s delivered a hospital or warehouse it's still delivered to a location, it has a code and a price etc.) Our solution is at present a choice to experience and the infrastructure is mature enough to provide a way forward having this choice to make it simple, save IT and business process costs simply by requirement of a change of mindset to try the proven solution. Cheers and thanks Mohsin M Jaffer Moledina