Question

1. Categorize the types of supply chain present in a typical healthcare organization in terms of their associated risk to the healthcare organization.

Answer 1

A typical healthcare supply chain involves interaction among manufacturers of equipment, resource providers, insurance companies, sponsors, administrators, distributors, pharmacies, suppliers, regulatory agencies, group purchasers, non-profit NGO organizations, hospitals, physicians and patients. Health care organizations aim to reduce costs and spending by promoting efficiency in the healthcare supply chain

Risk is broadly categorized as follows

Strategy risk – This risk is associated primarily with the supplier selection in the healthcare supply chain. The manufacturers, suppliers, administrators, group purchasers and hospital are the primary supply chain stakeholders categorized under strategy risk to decide the up-front strategy on selecting the appropriate suppliers by a typical healthcare organization

Market risk – This risk categorization primarily involves product line, brand, financial and the typical healthcare organization. The outsourcing activities of a typical healthcare organization come under this category. The healthcare unit might not have the required facilities and rely completely on suppliers for providing healthcare to their patients. In this case, patients rely on hospitals while hospitals rely on suppliers to provide care with insurance companies covering the market risk at each supply chain. Suppliers, insurance companies, hospitals and patients are the key healthcare supply chain stakeholders categorized under the market risk

Implementation risk – The lead times, capacity issues, time taken to provide care, initial performance and operations-related activities come under the implementation risk. The suppliers, sponsors, NGO, hospitals, pharmacies and physicians are categorized under this risk to provide healthcare to patients in a timely manner utilizing their capacity and service time in an effective manner

Demand risk – This risk is related to demand fluctuations prevailing in the industry due to disruptions in healthcare services owing to staff strikes, change in ownership, bankruptcies, performance issues etc. The loss to property and lives as a result of these fluctuations are covered by insurance companies. The administrators, regulatory agencies, insurance companies, hospitals, physicians and patients are categorized under this demand risk

Performance risk – This risk is related to quality healthcare and the role of regulatory agencies in monitoring that quality health care is being provided is crucial here. Administrators frame the quality healthcare policies and standards to monitor and ensure that quality healthcare is provided by a typical healthcare organization and insurance companies settle claims in an appropriate manner. Hospitals, pharmacies and physicians ensure that quality healthcare is provided by complying with the policies. Suppliers, regulatory agencies, administrators, insurance companies, hospitals, pharmacies and physicians are categorized under this performance risk