Survey finds healthcare supply chain needs improvement
FAYETTEVILLE, Ark. A comprehensive survey conducted by researchers at the University of Arkansas revealed that the American healthcare supply chain have efficiency barriers and have not implemented universal standards for data.
The report, entitled “The State of Healthcare Logistics – Cost and Quality Improvement Opportunities”, surveyed 1,381 professionals from all major sectors of the healthcare supply chain. More than 75% of the respondents worked for a healthcare provider. The remaining participants worked for manufacturers, distributors, group-purchasing organizations and other health care supply-chain organizations. The respondents generally had significant experience in the industry; 2-in-3 had worked in the healthcare supply chain for more than 10 years, and almost half of the respondents had more than 20 years of experience in the field.
“Right now, all manufacturers, distributors and providers do not use the same system to identify items, whether they be surgical scissors, heart monitors or cafeteria trays,” said Heather Nachtmann, associate professor of industrial engineering and conductor of the study. “In short, the healthcare supply chain is starved for accurate and accessible data, which are the primary barriers to efficiency, collaboration and standardization. Perhaps, needless to say, this is an extremely expensive problem. In our survey, the average healthcare provider spends more than $72 million a year on supply-chain functions, nearly one-third of their annual operating budget.”
Nachtmann and Edward Pohl, also an associate professor in the department of industrial engineering, conducted the industrywide study for the university’s Center for Innovation in Healthcare Logistics and for the Association for Healthcare Resource and Materials Management, a national association for healthcare supply chain and materials-management professionals. The goal of the survey was to assess and describe the current state of the healthcare supply chain, identify inefficiencies and investigate opportunities for improvement.
“Everyone knows healthcare costs are rising at an alarming rate,” Nachtmann said. “A significant cost driver is the universal complexity of the healthcare supply chain. We believe that healthcare logistics is an area in which costs can be significantly reduced and efficiencies gained to provide better and safer healthcare delivery at a reasonable cost.”
The Center for Innovation in Healthcare Logistics is an industry-university partnership that leads a nationwide effort to identify and foster systemwide adoption of ground-breaking innovations in health care supply chain and logistics. The center facilitates collaboration among researchers at the University of Arkansas, health care provider organizations and industrial sponsors, including Wal-Mart Stores, regional Blue Cross Blue Shield companies, Veterans Health Administration, the Association for Healthcare Resource & Materials Management, Procter & Gamble and IBM. The center, which began operations in May 2007, is housed at the University of Arkansas and has sustaining funding of more than $3 million for five years.
Nearly half of the respondents indicated that their organization’s supply chain was unstructured, had loosely defined supply-chain management practices and no process measures in place – or “defined,” where basic supply-chain-management processes were defined and documented, and procurement and other processes went through a formal procedure. Fewer than 1-in-20 respondents reported that their organization operated at the “extended” level, the highest of five levels on the maturity spectrum. “Extended” means that supply-chain management and processes are routine and so well established that the transfer of responsibility among all entities within an organization is smooth and seamless. At the extended level, there is a high level of trust, collaboration and mutual dependency among all entities.
“It is our hope that 10 years from now people will look back at this study and attribute many of the new and innovative changes made in the healthcare supply chain to the opportunities identified in this report,” Nachtmann said.
Merck KGaA acquires BGIP
DARMSTADT, Germany Drug maker Merck KGaA has acquired an Indian bioscience company based in the city of Bangalore, Merck announced Tuesday.
The German drug maker – a separate company from U.S.-based Merck & Co. – announced the acquisition of Bangalore Genei (India) Private, having purchased it from Sanmar Group through its Indian subsidiary, Merck Specialties Private.
Merck said the acquisition would make it one of the leading bioscience companies in India, though it did not disclose financial terms of the deal. BGIP develops proteonomic and genomic research products, having generated $4.45 million in revenues during the 2008-2009 fiscal year.
CDC reports continued short supply of H1N1, seasonal flu vaccines
ATLANTA H1N1 flu vaccine continues to be in short supply, reported an executive with the Centers for Disease Control and Prevention during a press conference Thursday afternoon, and the majority of seasonal flu vaccines already have been dispensed.
Approximately 82% of this year’s allotment for seasonal flu vaccine has been dispensed so far. “Manufacturers expect us to have 114 million doses by the end of the year,” reported Anne Schuchat, director of the National Center for Immunization and Respiratory Diseases at CDC. “We’ll see if we make that prediction they have made for us.”
As to H1N1 vaccine, there currently are 41.6 million on hand that are available for the states to order. “We believe that will be somewhat less than what manufacturers expected to reach at this point,” Schuchat said. “41.6 million is more than we had before, but not as much as we hoped to have by today.”
Immunization efforts for this supply continue to be focused on high-priority populations — pregnant women, healthcare workers, children up to age 24, seniors with chronic conditions and parents of children under 6 years. However, that focus may shift from high-priority groups to the general population soon, Schuchat suggested. “As the supply increases, we do think that access and convenience and ease of getting vaccinated will improve,” she said.
From April through Oct. 17, the CDC estimated approximately 22 million people have become ill from pandemic influenza (H1N1), including as many as 153,000 possible hospitalizations. The CDC gave a median estimate of 3,900 people dead in the first six months of the pandemic from this virus, with the estimates ranging from 2,500 up through 6,100 people having died so far.
“We’ve been talking a lot about this pandemic being a younger person’s disease, that it’s disproportionately affecting children and young adults and relatively sparing the elderly, very different from seasonal flu,” Schuchat said.
So, in children under 18 years, the CDC estimated 8 million children have been ill with influenza, 36,000 hospitalized and 540 children have died from this pandemic influenza. For adults 18 to 64 years, the CDC estimated 12 million cases, 53,000 hospitalizations and 2,900 deaths. For people 65 years and over, the CDC estimated about 2 million cases, 9,000 hospitalizations and about 440 deaths.