U.S. healthcare fix - leveraging the lessons from the food supply chain
Operations and Supply Chain Management
Date of this version
cost drivers medical tourism Supply chain management supply chain strategies
BACKGROUND: U.S. healthcare costs consistently outpace inflation, causing growing problems of affordability. This trend cannot be sustained indefinitely. OBJECTIVE: The purpose of this study is to use supply-chain tools for macro-level examination of the U.S. healthcare as a business system and identify options and best use practices. METHOD: We compare the important and successful U.S. food industry to the essential but problematic U.S. healthcare industry. Supply chain strategies leading to food business operations success are examined and healthcare applications suggested. We emphasize "total cost of ownership" which includes all costs incurred by all stakeholders of U.S. healthcare, including maintenance and cleanup, not just the initial purchase price. RESULTS: U.S. hospitals and clinics can use supply chain strategies in a total cost of ownership framework to reduce healthcare costs while maintaining patient care quality. Supply chain strategies of resource pooling, mass customization, centralized logistics, specialization, postponement and continuous improvement that have been successfully used in the U.S. food industry should be more widely applied to the U.S. healthcare industry. New and growing areas of telemedicine and medical tourism should be included in the supply chain analysis of U.S. healthcare. Valid statistical analysis of results in all areas of U.S. healthcare is an important part of the process. CONCLUSIONS: U.S. healthcare industry problems are systematic operational and supply chain problems rather than problems with workforce or technology. Examination of the U.S. healthcare industry through a supply chain framework should lead to significant operational improvement in both prevention and treatment of acute and chronic ailments. A rational and unemotional reorganization of the U.S. healthcare system operations, using supply chain strategies, should help reduce healthcare costs while maintaining quality and increasing accessibility.
Technology and Health Care Journal