management within health care tends to be multi-layered and driven
by the demands of a diverse customer base. This multi-disciplinary
service industry is complex, ranging from acute care units to rehab
clinics, physician practices, and home health care facilities.
Perhaps this diversity is more prevalent within health care, yet how
do these characteristics influence integrated resource management?
An introspective view of the health care business model poses
challenging integration resource requirements that do not embrace
traditional supply-demand chain methodologies. Healthcare supply
chain demands commonly embrace a melding of medical science
mysteries with a patient-care focus, where historically cost has not
been a barrier to making the patient well. This is changing. Basic
efficiencies gained through more conventional supply chain
management practices are slowly beginning to affect health care.
Market-driven pressures to provide quality patient care with
cost-consciousness have facilitated strategic business alliances
and partnerships such as group purchasing organizations and
vendor-managed inventories. A process-centered focus is fast
evolving that incorporates supply chain and delivery of care events
into a newly defined integrated resource management model.
What is the business impact? The health care industry is quickly
learning how to reshape its supply chain boundaries as emerging
information technologies are implemented to continually improve and
connect once disparate systems.
Adopting these new technologies,
however, has forced change. The following are insights and
observations gained from a materials management implementation team
that has adopted such technologies as enterprise resources planning
(ERP) and electronic commerce. The impact has been as diverse as the
industry. Outcomes of the project have focused on improved
processes, standardization of data, and a retooling of many
longstanding practices. These dynamics have affected the existing
internal and external supply chain systems throughout the
organization with an impact that is still being experienced.
OVERVIEW AND INDUSTRY BACKGROUND
The APICS Dictionary (9th edition) states the third definition of
resource planning as "an emerging field of study emphasizing the
systems perspective, encompassing both the product and process life
cycles, and focusing on the integration of organizational resources
toward the effective realization of organizational goals." Within
the health care industry, we can find several instances of
integration within the supply-demand chain process. However,
conventional resource planning takes on a new bent when applied to
the industry. Health care providers have traditionally been
challenged when planning and forecasting for patient mix and service
demand. The adage of fee-for-service is transitioning toward case
management as consumer-savvy patients demand cost-effective results.
Market-driven cost-savings strategies are rapidly growing.
Consider the following: Out in the clinical marketplace exist recent
business initiatives called integrated delivery networks (IDNs), or
regional integrated delivery systems (RIDS), which were developed
to remain competitive and cost-effective. These organizational
models and newly adopted alliances combine physician practices,
management service companies, hospitals, and information
technologies into more efficient delivery of health care services
within a geographic area. Patients are seen, conditions are
diagnosed, cases are referred, contracts are signed, facilities are
provided, data are transferred, and invoices are paid all with a
collaborative effort. This trend is sometimes referred to as the
"continuum of care."
Strategic initiatives have also taken root in order to keep up with
public cries for cost reductions and quality service. Clinical
pathways, procedural-based costing, computerized patient records,
and patient-centered care are the new buzzwords for redefined
business processes. These initiatives employ some blend of
standardized processes that promote connectivity across disciplines
and information technologies. For example, when a patient enters the
Emergency Department with chest pains, he goes immediately to a
"chest pain bed" attended by specialized personnel and equipment.
The patient is evaluated to rule-out secondary procedures and is
treated with standardized protocols that include tests, meds, diet,
referrals, and follow-ups. This specialized "patient care protocol"
is much like a bill of materials in the manufacturing world where
the resource supply-chain demand becomes somewhat predictable and
manageable. Activity-based costing in health care is now a reality.
Changes as described above dramatically impact supply chain
requirements. Longtime integrated supply chain practices like
electronic data interchange (EDI), stockless and vendor-managed
inventories, reduced stock levels, streamlined processes, and
enterprise resources planning are being adopted within the
industry. These proven business practices clearly earmark direct
cost-saving improvements for health care providers and advocate the
continuous process improvement the marketplace is demanding.
Clearly, the future vision of more efficient health care resource
management drives a systems perspective that is more closely aligned
with the APICS definition, a systems perspective that supports
• a patient focus in the delivery of high value products and
• a process focus that is interdependent and interconnected
• a continuous flow of product and information with no boundaries,
no interruptions, and total pipeline visibility.
To recap: "A systems perspective...integration of organizational
resources toward the effective realization of organizational
goals." How do you measure integration of resources within the.
health care industry? While tangible products are easy to quantify,
it is much harder to measure quality of services at point of
delivery. The challenges of defining integrated resources in health
care are based on understanding the culture and taking a step back
to examine existing systems currently in place.
To Be Continued