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Managing the Healthcare Supply Chain

Trends Issues Applications A Systems Perspective

Sameer Kumar, Ph.D.

Professor of Operations and Supply Chain Management Qwest Endowed Chair in Global Communications and Technology Management Opus College of Business University of St. Thomas, Minneapolis

Systemic Intervention for Public Health

Because of the complexity of many public health issues, where numerous interacting variables need to be accounted for; multiple agencies and groups bring different values and concerns to bear, it is not uncommon for people to call for a systems approach. This should not be surprising, as the whole concept of public health is founded on the insight that health and illness have causes or conditions that go beyond the biology and behavior of the individual human being.
Gerald Midgley, PhD, (2006), Systemic Intervention for Public Health, American Journal of Public Health, Vol. 96, No. 3, pp. 33-39.

Presentation Outline

Research Approach / Interests System and its Structure Health Care Supply Chain Problem Definition Health Care Supply Chain Healthcare Initiatives (and Associated Issues) Federal and
State / Local Levels

Health Care Questions / Applications System Dynamics Modeling Illustration


Research Approach

Systems Thinking Interconnections (Collaboration), Synthesis (Integration) & Behavior (Performance) Analytical and Computer Competence, Mathematics, Statistics, Risk Management, Reliability Engineering, System Modeling and Optimization, System Simulation, System Dynamics, Problem Formulation Interdisciplinary Leaning Global Implications

. .

Complexity of the Issues

Research Interests in Healthcare Systems

Health decision and prevention systems Healthcare supply chain informatics Healthcare system design Health communication

System and its Structure



Assemblage of sub-systems (components, modules, etc.), agents (people, technology, equipment,


other resources) and mechanisms


designed to perform a set of tasks to satisfy specified functional requirements and constraints.

Unity (consistent whole, complex whole, wholeness, synergy, etc.). Parts (elements, constituents, components, etc.). Relationship (interrelationship, interactions, structure, and 6 organization).

(e.g., healthcare supply chain)

System Dynamics

Healthcare Supply Chain

Enforce Health Care Regulations US Congress Food & Drug Administration National Institute of Health ...

Government Regulatory Agencies

Medical Equipment - Prosthetic Devices - Artificial Body Parts - Wheel Chairs - CT Scanners - Laboratory Equipment Pharmaceuticals

On Manufacturers / Distributors / Health Care Providers

Medical Equipment Manufacturers Pharmaceuticals Companies

Healthcare Professionals - Doctors, Nurses, Respiratory Therapists, Dietitians, Medical Technologists,... Healthcare Facilities - Hospitals - Proprietary Clinics - Nursing Homes - Hospices - Urgent Care - Same-day-surgery Centers



G $

Healthcare Providers

G&S $


Legend: G Goods S Services I Information and Directives $ - Payments / Reimbursements

Insurance Companies

Public and Private Payer Systerms

e-Commerce (using Internet/Intranet/Extranet)

Medicare Medicaid Employers

Healthcare Supply Chain: General Problem

Design a healthcare supply chain that effectively

responds to needs during a health related activity in a specific patient scenario by optimizing allocation of resources under constraints of health care professionals

size and capability, health provider environment, nature

of disease (ailment), and insurance coverage.

Healthcare Initiatives and Issues Federal / State / Local Levels

Global Healthcare Supply Chain Opportunities (Logistics related issues)

HIV / AIDS Prevention & Control Bird Flu Pandemic Prevention & Control Essentials (food, water, medicine) delivery for disaster events

(drought, tsunami, earthquake) Disease Free Crop Production and Distribution Medical Tourism Humanitarian Supply Chains Global Medical Diplomacy Cargo Container Security (biological/nuclear/chemical weapons)


Policy Initiatives and Issues Federal / State / Local Levels

National (US) and Community Health initiatives Elder Care delivery systems Affordable public housing Child Care delivery systems Prescription Drug delivery supply chain through Medicare / Medicaid Health Management Organizations Supply Chain Management Technology Impact

Cyber-infrastructure for Healthcare Enterprises Role of e-management in Healthcare Enterprises Expert Systems / Decision Support Systems in Healthcare Delivery RFID in Healthcare Supply Chain Electronic Health Records Classification and Coding of Clinician Diagnostics Systems Integration issues for ERP Systems in Healthcare Enterprises 11

Healthcare Questions Examined

? How severe is the impact of potential Avian flu pandemic disruptions on global supply chains and what are the continuity strategies for mitigation? ? How can the role of nurses can be expanded for long-term care during and post hospitalization? ? What effects medical tourism has had both on the U.S. and the global healthcare supply chains including managerial and cost implications that various surgical procedures will have on the global healthcare system? ? How to improve the insufficient health communication efforts to inform uninsured or under insured medical tourists about the benefits and risks? ? How medical diplomacy can be used to curb extremism? ? What should a modern day hospital design look like?


Healthcare Questions Examined

? How can RFID technology improve efficiency and mitigate medical errors in hospitals? ? How can increased emphasis on preventive measures reduce national healthcare expenditures? ? How can we improve the functionality and uses of the Electronic Medical Record? ? What can be done to facilitate early diagnosis of childhood strokes and how to reduce variability of diagnosis and treatment? ? Can we quantify the difference between the current process flow model for a typical patient workup for chest pain and development of a new process flow model that incorporates DMAIC Six Sigma and EBM in a best practices model for diagnosis and treatment?

Health Care Systems Applications

The Role of Leveraging Nurses for Long-Term Care During and Post Hospitalization. (Journal of Home Health Care Management and Practice, 2011) Decision Support Tool To Streamline Patient Diagnosis For Chest Pain Utilizing Six Sigma DMAIC and Evidence Based Medicine. (Quality Management in Health Care, 2010) Supply Chain Disruption By Avian Flu Pandemic For U.S. Companies A Case Study. (Transportation Journal, 2010) A modified Delphi methodology to conduct an FMEA: a patient-centric effort in a clinical medical laboratory. (Quality Management in Health Care, 2011) Revenue and Cost Economics of Partnering with Health and Wellness Services. (Journal of Revenue and Pricing Management, 2011) Service delivery of care in children who have had strokes: review of the initial diagnosis and ongoing treatments. (Journal of Pediatric Neurology, 2009) Medical errors elimination in U.S. hospitals. (International Journal of Health Care Quality Assurance, 2008) Technical efficiency measurement of specialty hospitals versus community 14 hospitals. (Journal of Revenue and Pricing Management, 2008)

Health Care Systems Applications

Electronic health records economic justification and technical implementation. (Health Informatics, 2010) Rx for smart hospital purchasing decisions to influence product packaging. (International Journal of Physical Distribution and Logistics Management, 2008) Product recalls and counterfeit drugs control measures and mitigation in pharmaceutical supply chain. (International Journal of Productivity and Performance Management, 2009) E-healthcare. (IIE Solutions, 2001) RFID in healthcare supply chain. (International Journal of Health Care Quality Assurance, 2009) Medical diplomacy supply chain to curb extremism. (Journal of Health Communication, 2009) Managing risks in a relief supply chain in the wake of an adverse event. (OR Insight, 2011) Modeling Patient Flow Operation of a U.S. Urban County Hospital. (Technology and Health Care, 2011)

Health Care Systems Applications

The Hospital Cost Structure in the U.S.: Whats behind the Costs? (International Journal of Health Care Quality Assurance, 2011) Stage Implementation of RFID in Hospitals. (Technology and Health Care, 2010) Specialty hospitals emulating as focused factories models for improved efficiency. (International Journal of Health Care Quality Assurance, 2010) An Ounce of Prevention: Revenue and Cost Economics of Partnering with Health and Wellness Services. (Journal of Revenue and Pricing Management, 2011) Examining Quality and Efficiency of the U.S. Healthcare System. (International Journal of Health Care Quality Assurance, 2011) Modeling hospital surgical delivery process design using system simulation: Optimizing patient flow and bed capacity. (Technology and Health Care, 2011) HIPAA impact on U.S. healthcare systems. (International Journal of Health Care Quality Assurance, 2009)

Health Care Systems Applications

Examining Potential Avian Flu Pandemic Disruptions on Global Business Operations and Strategies for Corporate Preparedness A DMAIC Case Study. (International Journal of Health Care Quality Assurance, 2011) Globalization of Health Care Delivery in the U.S. Through Medical Tourism. (Journal of Health Communication, 2012) RFID in Healthcare: A Six Sigma DMAIC and Simulation Case Study. (International Journal of Health Care Quality Assurance, 2012) Six Sigma Tools in the Health Care Supply Chain: A U.S. Retail Pharmaceutical Service Application. (Technology and Health Care, 2011) Exploring the Impact of Management of Chronic Illnesses through Prevention on the U.S. Healthcare Delivery System a System Dynamics approach. (Information Knowledge Systems Management, 2011) Development of a hospital based menu driven clinician coding tool to implement quality reimbursement process. (Technology and Health Care, 2011)

System Dynamics Modeling Illustration

Supply Chain Disruption by Avian Flu Pandemic paper