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A Health Care Call to Arms

  • John P. Collins
  • Eric P. Jack
July/August 2017

The recent health care debacle in the U.S. Congress underscores the complexity of an issue that will continue to confront the United States for years to come. Leaders have been humbled as the easy solutions advocated during the campaign cycle have given way to some much-needed reflection. Indeed, many of those inside the debate clearly didn’t know that health care could be so complicated. 

Interestingly, the supply chain management discipline can help policymakers at this critical juncture. After all, operational strategies and trade-offs relating to cost, quality, delivery and flexibility are at the core of the newest health care bill’s challenges. The three most important of these topics are market-based quality, delivery for increased access and cost efficiency.

Market-based quality

Most patients do not have knowledge of, or easy access to, reliable information to help them make good judgments about their health care. As a result, it’s difficult for average consumers to judge the market-based quality of the services they receive. Until patients are given the tools to understand how to assess outcomes such as mortality, morbidity, infection rates and more, the lack of this basic information will continue to challenge the health care industry.

It also can be argued that the roles of the paying agencies and insurers unnecessarily complicate patient choices because people often are unable to choose for themselves. We supply chain management professionals know that industries cannot operate successfully without informed and empowered end customers. It’s essential to build straightforward knowledge systems that educate patients and enable them to take responsibility for their market-based choices regarding health care.

Delivery for increased access

Once a reliable knowledge system is in place, we then must improve our capacity to deliver care to an increasing number of informed and empowered patients. The debate over the Affordable Care Act essentially was about two factors: who will pay when 45 million new customers are given access to health care and a bill of rights that precludes providers from denying service for a number of reasons. The brutal reality is that we may not have the capacity to provide timely care to the millions of patients entering the delivery system with chronic diseases and potentially costly medical profiles.

To address this gap, we have to develop delivery systems that incentivize people to stay healthy outside of the health care system. Delivery tools that promote wellness and easy access to routine care should be expanded, reinforced and promoted.

Cost efficiency

Cost efficiency is the third operations strategy that supply chain professionals can help the health care field address. Most of the current policies do not tackle the increasing cost of health care. Furthermore, many health care systems struggle to capture and understand their own costs. Because these organizations rely on reimbursement arrangements with payers and insurance agencies, there is little incentive to ensure that the fee that is billed to a patient is aligned with what is reimbursed. As a result, health care organizations generally assume that those who can pay will pay for everyone else.

There is a bigger question about costs as well: Should the cost of care be judged only by the insurance rates or deductibles that patients ultimately pay, or should the cost be linked to reducing the disease profiles of patients at a given locality? To resolve this deliberation, the health care industry will have to share more information about its costs for delivering patient services. Here, again, the payers and insurers must find more creative ways to help patients make good choices related to both improving their health and reducing their costs.

As supply chain management professionals, we have relevant skills and knowledge that may be the keys to the long-term success of health care systems. Let’s get involved in this policy debate!

John P. Collins, CFPIM, CSCP, is president of Sustainable Solutions. He may be contacted at jpc45@uab.edu.

Eric P. Jack, PhD, CFPIM, CSCP, is dean of the Collat School of Business at the University of Alabama at Birmingham. He may be contacted at ejack@uab.edu.

To comment on this article, send a message to feedback@apics.org.

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