Considering the complexities of healthcare systems, the increasing physician and nurse shortages, a growing population, rising rates of chronic medical conditions, and the recent COVID-19 pandemic, the current state of healthcare presents a unique opportunity for physicians to establish their role in ensuring patient outcomes through administrative leadership.
For the past several decades, physicians have become important members of the healthcare leadership team throughout the world, taking on roles as diverse as medical directors, chief medical officers, chief executive officers, health commissioners, deans, university presidents, and surgeon generals. Although these roles were traditionally seen as a mechanism to transition from the physical and emotional demands of clinical practice, they now represent a career path and a unique position to be pursued within the healthcare supply chain. The physician leader in the healthcare supply chain can drive value in the system by balancing costs with outcomes, quality, transformation, and the clinical mission.
The Healthcare Supply Chain
Healthcare is the diagnosing, treating, caring, and supporting of patients who need services related to illness, injury, disability, and the prevention of disease. Further, it improves the quality of individual life and enhances the health status of communities.
As a continuum, healthcare starts with self-care and continues to primary care, secondary care, tertiary care, rehabilitation, long-term care, and hospice care. Collectively, each component has a supply chain aspect associated with that level of care. The technology of healthcare, supplies, pharmaceuticals, and medical equipment to diagnose, treat, care for, and support patients come from the supply chain. Further, the utilization of these items is paired with trained and compassionate healthcare providers to produce the highest quality of services and outcomes for the patient.
As hospital employment of physicians becomes increasingly common in the United States, physicians engage with hospital processes beyond patient care, especially the supply chain process. According to a 2016 study, the trend in the United States toward hospital employment of physicians may be a positive development for improved hospital operating efficiency through the supply chain.(1) Therefore, it is essential for physician leaders to be engaged in supply chain operations and vital for hospital administrators to partner with, train, and provide education resources to their clinical colleagues. Physician leaders can strengthen their role in supply chain activities by learning to understand the importance and fundamentals of the supply chain in their health system.
The healthcare supply chain and its management contribute significantly to improving patient safety and quality of care and achieving cost-reduction objectives. Referred to as the integration of the flow of products, information, services, and finances from the point of origin to the final customer, the healthcare supply chain includes transport and storage of raw materials, work in progress, and finished goods from production to the point of usage.
In other words, the supply chain is an interconnected network of individuals and organizations that are involved in the production of products and services. It is a critical core business component of the healthcare delivery system, the second largest cost category in a hospital after labor expenses, and ensures that the tools of care are available to the physician, nurse, clinician, or caregiver at the right time, at the right place, and in sufficient quantity.(2)
Healthcare supply chains differ from those of other industries, yet it is these differences that significantly affect the cost and delivery of care to the patient. Healthcare supply chains face challenges not present in many commercial supply chains, including consequences of failure in the healthcare supply chain leading to loss of life; unparalleled regulation (qualification of clinicians and the research and development of products); variation in utilization and maintenance of products; and lastly, lack of hospital control of many of the assets utilized in the delivery of a service by a hospital.
Overall, the supply chain within the health system integrates with the healthcare provider to diagnose, treat, and care for a patient. Remove either the supply chain or the care provider from the equation, and healthcare is significantly less effective, less efficient, and less efficacious. Patient safety, cost of care, quality of care, and access to care are intimately connected to the healthcare supply chain.
The Necessity of Physician Leaders
The COVID-19 pandemic is an extraordinary event that has affected every nation, business, and supply chain on our planet. The pandemic left the healthcare system in crisis: hospitals on the verge of collapse with their capacity overflowed, critical-item supply chains interrupted, and federal and state agencies struggling to take palliative and preventative measures. Although governments and private sector organizations had disaster plans and stockpiles in place, the pandemic exposed several major supply chain vulnerabilities, including shortages of personal protective equipment and testing kits.
Overall, the crisis identified for the physician leader the importance of organizational leadership, collaboration, and relationship building in and across organizations, and the need to diversify product resources, safeguard the supply chain, and improve technology that forecasts shortages. Further, the role of the physician leader shifted from not only participating in the efforts of the supply chain, but also in leading culture change and communicating the urgent needs and limitations of the supply chain.
Many events can disrupt supply chains, including natural disasters, geopolitical conflicts, supplier bankruptcy, labor disputes, cyberattacks, and data breaches. What is different about the COVID-19 pandemic is the level of uncertainty and the length of the disruption, as well as its simultaneous impact on various geographic areas. In addition, unlike most other disruptions, COVID-19 has affected not only the supply, but also the demand for products and services.
In response, organizations across various industry segments have attempted to stabilize their supply chains by conducting risk assessments and implementing business continuity plans. Many have diversified their product portfolios to respond to changing demands, creating new products based on their existing resources.(3,4)
The Importance of Resilience
The COVID-19 pandemic made clear that public health crises can wreak havoc on the global supply chain. COVID-19 certainly is not the first event of its kind; the 2003 SARS epidemic, the 2009 H1N1 flu pandemic, and the 2014 Ebola outbreak, among others, all had devastating effects on supply chains around the world. Any of these disruptive events has the potential to disturb the global supply chain, causing everything from capacity constraints and excessive freight rates to material shortages and shipping delays. Given the severity of the consequences, the importance of supply chain resilience cannot be overstated.(5)
Resilience requires preparedness, responsiveness, transparency, and flexibility. Physician leaders can support their supply chain partners’ efforts to increase supply chain resiliency and mitigate supply chain interruptions through several strategies:
Multidisciplinary collaboration and communication through the engagement of physicians, administrators, vendors, suppliers, distributors, group purchasing organizations, and community resources to address immediate shortages and forge new relationships while optimizing the delivery of care.
Optimal inventory management with stockpiles of supplies and added warehousing, hospitals, and health systems to provide the right balance between just-in-time and just-in-case inventory. This is accomplished by adding redundancy in the supply chain, such as by carrying extra inventory of essential healthcare items, holding excess manufacturing capacity for producing critical items, or contracting with backup suppliers.
Data capture and analysis combined with predictive and prescriptive analytics for identifying potential supply chain vulnerabilities and building strategies to accommodate them. Although it may not be possible to anticipate every supply chain risk, supply chain dashboards and disruption-risk mapping help manage challenges. Organizations also can look to the future by predicting, identifying, and preventing product outages before disruption. Key to these efforts is working with clinicians to find clinically equivalent substitutes and alternative sources for critical supplies.
Statistical forecasting models based on historical data and caseloads to predict the expected patient population or cases by specialty at each location. Organizations can gain greater upstream visibility by mapping and monitoring the supply network. While doing this for essential medical products can be time-consuming, it helps organizations anticipate how disruptive events may impact their supply chains.
Improved supply chain resiliency by dual sourcing raw materials, if possible, and onshoring more of the manufacture of critical medical products such as face masks and shields, respirators, isolation gowns, commonly used medications, and gloves. To respond effectively to changes in demand, hospitals will need multiple suppliers from multiple regions.(5)
Improved visibility and transparency of the strategic national stockpile (SNS). The SNS is the United States’ national repository of antibiotics, vaccines, chemical antidotes, and antitoxins, as well as other critical medical supplies. At the start of the pandemic, many governors and local government leaders did not realize which products and supplies were available in the SNS and which were lacking.
Because the SNS is a national security asset, there is reason to maintain some confidentiality around its products and supplies, but during a public health emergency, the federal government must ensure that the SNS is more transparent, perhaps by creating a free, open-source platform that healthcare systems can access. Healthcare systems and manufacturers should also share their inventory lists with one another so that contingency plans are employed.(6)
The COVID-19 pandemic has significantly disrupted the supply chain operation, highlighted the inefficiencies, and emphasized the value of a multidisciplinary team to deal with the crisis. As a result, healthcare organizations must diligently manage their supply chain and pending disruptions. Otherwise, the consequences can prove deadly.
Physician Leader Engagement With Supply Chain
From a health policy standpoint, several changes have increasingly demanded the physicians’ perspective. Nearly 30 years ago, the NEJM released a series of articles on medical errors that set the context for improving quality in healthcare.(7) President Bill Clinton’s administration followed with “Quality First: Better Healthcare for All Americans.” The Institute of Medicine provided a series of landmark studies on how the American healthcare institution needed to be improved from a safety, quality, and information technology perspective.(7) Then came passage of the Patient Safety and Quality Improvement Act,(8) the establishment of Patient Safety Organizations,(9) and passage of the American Recovery and Reinvestment Act(10) and the Patient Protections and Affordability Act.(11)
Collectively, these changes require the integration of physician leadership so as to better coordinate the quality of care and improvement across the spectrum of healthcare. Consequently, physicians are increasingly sought after as valuable members of the leadership team.
Value-based care has spotlighted the need for stronger relations among physicians, their clinical and non-clinical colleagues, and healthcare organizations. When executed successfully, an ongoing focus on physician engagement can increase collaboration between clinical staff and the organization and facilitate the development of a comprehensive multidisciplinary structure with the authority to implement change, and lead process improvement initiatives focused on financial performance, quality of care, and the outcomes of care.
Physicians play an important role in the complex mechanisms of healthcare delivery, providing leadership to frontline care and making key decisions in areas such as quality and finance. This engagement can also be translated to the healthcare supply chain. The clinical integration of the supply chain is the prime opportunity to begin or enhance the overall engagement across the organization. Simple conversations about supply utilization data, clinical research, and how one can support the other, will result in the establishment of a common vision and strategy for advancing quality across the health system.
There are several approaches to integrating physicians and other stakeholders within the supply chain:
Discover a common mission and vision through a clinically integrated supply chain (CISC). The CISC helps establish a common vision and strategy for advancing quality through using resources, clarifying cost-effectiveness, and justifying new technology for clinical needs. Example initiatives include value transformation across service lines or systems and population process standardizations for improved patient experience.
Reexamine the values of the organizations to make physicians key partners with a seat at the executive table.
Involve the physician from the beginning of an initiative to completion, incorporating a spectrum of physicians, communicating thoroughly and visibly presenting physician involvement, and valuing their participation, time, and expertise.
Identify and encourage physician champions and train-the-trainer physician leaders, and reinforce the technical aspects of successfully managing projects.
Use physician data and clinical research to encourage engaging conversations among clinical and non-clinical stakeholders.
Participate in value analysis committee meetings. These supply chain committees are multidisciplinary, consisting of both clinical and supply chain professionals, have active physician involvement, and play an integral role in the hospital and various healthcare settings with consistent processes. Committee members evaluate products and services before they are on contract and discuss their potential effects on cost and patient outcomes. This physician input can help supply chain leaders make smarter procurement choices and standardize around the most effective items.
Engaged physicians are essential for high-functioning healthcare supply chains, but the process of engagement must be supported by a culture of openness. The engagement process has to be reciprocal, with the supply team recognizing and supporting the clinician’s needs, and vice versa.
Conclusion
Physician leaders have an important place in healthcare today, and the COVID-19 pandemic accentuated the need for physician involvement and leadership within the supply chain. A physician leader informed of the fundamentals and complexities of the healthcare supply chain can be a strategic asset in building resiliency and mitigating disruption within the supply chain. Overall, physician leaders can be effective in driving value within the health system by balancing costs with outcomes, innovation, and the clinical mission.
References
Young GJ, Nyaga GN, Zepeda ED. Hospital Employment of Physicians and Supply Chain Performance: An Empirical Investigation. Health Care Manage Rev. 2016;41:244–255.
Streamlining the Hospital Supply Chain: Just What the Doctor Ordered. Inbound Logistics. January 2015. www.inboundlogistics.com/articles/streamlining-the-hospital-supply-chain-just-what-the-doctor-ordered . Accessed August 14, 2022.
Best S, Williams SJ. What Have We Learned about the Sourcing of Personal Protective Equipment During Pandemics? Leadership and Management in Healthcare Supply Chain Management: A Scoping Review. Front Public Health. 2021;9:765501.
Bohmer RMJ, Pisano GP, Sadun R, Tsai TC. How Hospitals Can Manage Supply Shortages as Demand Surges. Harvard Business Review. April 3, 2020. https://hbr.org/2020/04/how-hospitals-can-manage-supply-shortages-as-demand-surges . Accessed August 1, 2022.
Linton T, Vakil B. Coronavirus Is Proving That We Need More Resilient Supply Chain. Harvard Business Review. March 5, 2020. https://hbr.org/2020/03/coronavirus-is-proving-that-we-need-more-resilient-supply-chains . Accessed August 1, 2022.
Okeagu CN, et al. Principles of Supply Chain Management in the Time of Crisis. Best Pract Res Clin Anaesthesiol. 2021;35:369–376.
Institute of Medicine (US) Committee on Quality of Health Care in America, Kohn LT, Corrigan JM, Donaldson MS, eds. To Err is Human: Building a Safer Health System. Washington, DC: National Academies Press (US);2000.
The Patient Safety and Quality Improvement Act of 2005. Rockville, MD: Agency for Healthcare Research and Quality. https://pso.ahrq.gov/resources/act . Accessed July 31, 2022.
U.S. Department of Health and Human Services. Patient Safety and Quality Improvement; Final Rule. Vol. 73: 226. www.pso.ahrq.gov/sites/default/files/Patient%20Safety%20Rule.pdf . Accessed July 31, 2022.
American Recovery and Reinvestment Act of 2009. Pub. L. No. 111-5. www.gpo.gov/fdsys/pkg/BILLS-111hr1enr/pdf/BILLS-111hr1enr.pdf . Accessed July 31, 2022.
The Patient Protection and Affordable Care Act of 2010. Pub. L. No. 111-148. 124 Stat. 119 (2010). www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf . Accessed July 31, 2022.