Population health: A supply chain problem?

A decade ago, the Institute for Healthcare Improvement coined the term the Triple Aim and outlined its respective components.

It seeks to simultaneously improve the patient experience of care and the health of populations, while reducing the per capita cost of care. The Triple Aim is often referenced by healthcare system leaders and public policy makers in discussions related to improving the quality and cost of healthcare. But achieving the third leg, “population health,” has remained an enigma for many.

Not only is there confusion over the definition of the term, but what contributes to better population health falls outside of the traditional clinical approach, which has been very supply centric, i.e., built around the hospital and the physician, and less about the patient or the demand.1 That’s because the social determinants of health – whether someone has a good job, a safe place to live, access to good food and transportation, among other environmental factors – have a greater impact on a person’s health than the clinical care he or she receives.

A fundamental challenge in pursuing better population health, therefore, has more to do with matching the right supply with the demand, and it is one that supply chain professionals can help address.

Consider what supply chain professionals do: they identify needs and then source, contract, procure, receive, and deliver the resources to meet those needs. Those resources can be as much about meeting the social determinants of health as they are a medical device or a pharmaceutical.

Take food insecurity – one of the most common social determinants of health – as an example. Nearly 20 percent of U.S. households suffer from some level of food insecurity or, in other words, an inability to access the food they need to stay healthy. The percentage is even higher for single mothers and senior citizens. This is not due to a lack of supply: 40 percent of food in the U.S. is thrown out each year. Food insecurity is caused by a lack of access: finances to pay for nutritional food, transportation to get to where healthy food, such as fruits and vegetables, are sold, and/or the knowledge to know what foods to eat to stay healthy.

Hunger is also a critical healthcare issue, leading to higher rates of chronic disease, including obesity and diabetes, and increasing U.S. healthcare costs by more than $130 billion annually. One of the most successful hospital-based strategies to address food insecurity is the creation of food pharmacies, where individuals can receive a prescription for nutritional food for themselves and their families. Geisinger Health’s Fresh Food Farmacy, which offers healthy food at no cost to patients with type 2 diabetes and their families, has reported both improvement in the health of participating patients and a lower costs to care for them. A similar program run by ProMedica Primary Care Providers in Toledo, Ohio has resulted in a 35 percent reduction in readmissions, as well as fewer emergency room usage and increased primary care visits.

But how is this a supply chain issue? Many healthcare supply chain organizations are already involved in procurement and logistics around food for inpatient rooms and hospital cafeterias. LeeSar, which provides supply chain services to hospitals in Florida, leveraged its existing food service program to prepare and deliver healthy meals to patients before and after a hospital procedure. The program is designed to optimize patient readiness for surgery and to ensure good nutrition during their critical recovery period. Eskenazi Health in Indiana pursued a similar initiative by partnering with an existing community resource, Meals on Wheels, to deliver healthy meals to patients after hospital discharge, with expectations that the program will significantly reduce its readmission rates.

In each of these cases, supply chain-related competencies are required. In some cases, a healthcare system leverages existing services, while in other cases it identifies and contracts with a community resource. Either way, the key is effective utilization of resources (hospital or community-based) vs. increasing duplication and waste in the system.

Not-for-profit hospitals are required to conduct a community needs assessment every three years, which is essentially an inventory (another supply chain skill) of what a community needs to be healthy. Those same hospitals must come up with strategies to meet those needs, working with community agencies to identify what exists and to fill gaps as needed. In other words, hospitals cannot meet these needs alone, nor can they do so without good supply chain skills.

The supply chains operated by healthcare systems are among the most complex of any industry, as hospitals operate much like mini-cities, with resource needs ranging from food, utilities and housekeeping to highly sophisticated medical devices and equipment. Now, with a significant portion of traditional hospital-based services being delivered outside of the acute care setting, and an increasing demand for products and services to address the social determinants of health, supply chain expertise is increasingly important. Rather than building more capacity at the traditional hospital, progressive healthcare system leaders are considering how they can deploy professional skills and technology to best match supply with the demand, or in other words, the right resources (whether clinical or social) to meet the needs of patients and populations in the most cost-effective manner possible.

1 Porter ME, Lee TH. The Strategy that Will Fix Health Care. Harvard Business Review. https://hbr.org/2013/10/the-strategy-that-will-fix-health-care. Published October 2013. Accessed January 9, 2016.

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