What is value in the health care supply chain?

Value statements, or Value propositions

Each have different definitions and objectives, but they are relatively the same within various industries. And then there’s the health care supply chain. What’s the value proposition?

Pinpointing the priorities:

Supply chain in health care has many competing value statements within any given organization. The elasticity and influence of the supply chain in health care have many competing objectives — values — inside the same organization. The ability to flex from one to another is a monumental challenge when a pandemic competes for priorities and goals. How far can the supply chain be stretched without snapping? How quickly can it retract?

Several variables, or influencers, can enhance or stall the whole supply chain

• Revenue.
• Delivery of care.
• Regulatory guidelines.
• Data intelligence, both enterprise and predictive.
• New, diverse supply channels.
• Financial stewardship.
• Strategic sourcing.
• Reliability.
• Demand planning.
• Storage and operations.
• Purchasing and order management.
• World events.

What does health care covet?

1. Delivery of care.
2. Compensation for the delivery of care. 

The health care supply chain requires revenue to operate; it is that simple. There is a well known saying in business “no margin, no mission” and competing values and priorities do not sit well within that business mindset. COVID-19 has forced organizations to implement a new standard, not a new normal within health care. No one likes a gun held to his or her head when making decisions; right now, the coronavirus has its finger on the trigger. As stated by the Congressional Budget Office, health care spending is projected to climb (see graph).

How much do we spend?

 In 2020, U.S. health care spending accounted for 18% of the GDP, which is the highest health spending among developing countries; comparatively, Canada is 3%.