As healthcare delivery evolves, so will the supply chain

Jan. 24, 2023

Late last year, I was asked to offer my predictions as to what healthcare delivery will look by 2030.  For this month’s column, I thought I would spend some time discussing some of those trends and what they might mean for the evolution of the supply chain.

Restructuring the system from a primarily acute care focus to chronic disease management

For both clinical and economic reasons, the healthcare system will be restructured to better support chronic disease management, which consumes almost 90 percent of our national healthcare expenditures. Today, nearly 60 percent of Americans have at least one chronic disease, and 40 percent have more than one, which increases both the costs and risks associated with their care. Going forward much of the innovation in healthcare delivery will center on primary care to help prevent and/or manage chronic disease and the ability for patients to take a more active role in their care.

Potential Supply chain implications:

  • Pursuit of the clinically integrated supply chain will include engagement with more primary care practitioners and those specializing in chronic disease, as opposed to today’s emphasis on those specialists who utilize high dollar devices in their practice, e.g., orthopedic and spine surgeons.
  • The medical-surgical and pharmaceutical supply chains will collaborate more closely given the importance of both drugs and devices in chronic disease management.

Data-driven, platform-enabled, personalized healthcare

With advances in genomics and the availability of additional clinical and social data, we will see the development and expansion of platforms that aggregate and analyze data from multiple sources to predict what kinds of care specific patients will likely need, and to manage prevent chronic disease. Artificial intelligence will consider a broader range of information (including data from patients themselves, implanted and connected devices, and digital health apps). While the end result will be more individualized care pathways, the data analyzed will be based on information gathered from an increasingly large and diverse set of patients, to more effectively understand what works best for which patient populations, e.g., those with similar co-morbidities, gender, age, ethnicity, lifestyles, genetics, etc.

Potential Supply chain implications:

  • With this forward-looking data, supply chain professionals can more precisely determine the supply (including pharmaceutical) bundles that will be needed by covered patients to help generate longer term demand signals.
  • Value analysis and strategic sourcing will evolve from a primary focus today on new product introductions and conversions to the use of real-world evidence as to which therapies (and associated supplies) improve quality and lower the total cost of care delivery.
  • Healthcare supply chain professionals will spearhead more outcomes-based contracts with suppliers to not only share risk but also help generate the real world evidence needed to continually inform care pathways.

Changing location of healthcare

Both of the trends above will further accelerate the move to care delivery outside of the acute care setting. This is driven in large part by research documenting the ability to deliver care in community settings, including ambulatory surgery centers and the home, at lower costs and often at higher quality. Locally delivered care also increases satisfaction and convenience for many patients. ASC volume is expected to increase between 15 and 25 percent by 2030, while the delivery of acute level care in the home will likely grow by nearly one-third. The move to more non-acute locations is further supported by the increase in the types of procedures that can be conducted in ASCs and the advancement of remote patient monitoring and the extension of waivers for acute hospital at home programs.

Potential Supply Chain implications:

  • Supply chain professionals will become increasingly involved in ensuring the availability of qualified personnel to deliver care in the home and other community settings. This will include coordinating the logistics to make sure the right people and products are available where needed and in the most efficient and cost-effective manner. Supply chain will also be asked to address issues related to making individual home environments conducive to healthcare delivery.
  • ASCs will increasingly rely on health systems, device vendors and/or independent outsourcing and technology companies to help manage their supply chains.
  • Value analysis and strategic sourcing teams will seek data on how devices perform in different delivery environments.
  • Efforts to standardize products will expand beyond single or jointly owned facilities and institutions to support more continuity of care and product familiarity among caregivers and patients working or being cared for in a variety of locations, even when operated by disparate organizations.

More focus on sustainability and equity

Both environmental sustainability and health equity are capturing more attention in the C-suite.  Both issues also contribute to chronic disease.  Health disparities are correlated with higher rates of chronic disease and are more prevalent among the poor and persons of color.  Disparities in turn are correlated with barriers to access to care and the social determinants of health (e.g., nutritious food, safe housing, transportation, etc.).  Climate change has also been shown to increase rates of respiratory disease and deaths, which are higher among the poor and persons of color who often do not have the resources to mitigate the negative consequences of extreme weather-related events.

Potential Supply Chain implications:

  • Supply chain will be increasingly involved in efforts to address health equity, by using the power of procurement dollars to support economic development in disadvantaged communities.
  • Value analysis will look beyond just price and efficacy of products to consider how they support environmental sustainability, local economic vitality and whether the evidence on performance is based on a diverse study group.