Transforming the Health Care Industry’s Supply Chain

Last evening I attended a very interesting panel discussion presented by the Consulting Roundtable of the University of Chicago Booth School of Business.  Most of the Roundtable programs are open to anyone who is interested.  Health care being a hot topic, this session was well attended by many health care professionals, and industry suppliers and consultants.

 

What I heard had much to do with the supply chain and business processes in the health care industry and that is why I thought that DC Velocity’s blog readers might also be interested.  Several big supply chain related themes emerged:

 

• If the panelists fairly represent the thinking within health care, they are focused more on preparing for change that they characterized as inevitable, rather than trying to undo the law that was passed.  It seems to me that the health care industry is at a similar point in improving its competitiveness as the consumer goods industry was in the 80’s when Wal-Mart began to force a lot of fundamental re-thinking, process improvement, and cost reduction.
• Consolidation has begun with respect to hospitals, physicians’ practices, and related care providers and this will continue.  However, the health care management, payments, etc. systems are fragmented and non-compatible; so at some point, for better integrated and more portable health care, more unified standards are probably going to be legislated.
• From an Information Technology perspective, there are too many different systems and few with an end-to-end solution.  Here’s a quote from Jay Anderson, VP Quality & Operations, Northwestern Memorial Hospital – “We don’t know how to provide care in a connected world.”  Transparency of information through the health care process is and will be a challenge.
• The health care legislation that was passed defined the reform that will occur related to heath insurance.  Payment reform and care reform have yet to be defined.
• “Consumers expect a retail-like experience when dealing with health care providers.”  This is a statement made by Elyse Forkosh Cutler, VP Strategic Planning and Network Development, Advocate Health Care.
• Suppliers to hospitals and other care providers will have to find ways to lower costs.  How will pharmaceutical companies and other suppliers react?
• Physicians will likely be paid less for many services.  What will be the result?

 

As the last two points indicate, there are many unanswered questions on this subject.  It will be interesting to see how it plays out since all of us are consumers of health care services.

 

If any reader is interested in more information, I will be happy to try and respond.  Here is a link to the Consultant’s Roundtable home page http://www.chicagobooth.edu/alumni/roundtable/consulting/