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The Patient Supply Chain

March 16, 2018

The movement to value-based care from volume-based care puts great pressure on private and federal healthcare organizations to obtain a detailed understanding of how and what resources they utilize to deliver care. Without a deep understanding of this issue, providers are unable to effectively manage care delivery and survive an environment of declining reimbursement.

Other industries focus on the supply chain to efficiently manage production and the delivery of products to customers. Although healthcare organizations similarly focus on the supply chain, they focus solely on tangible products utilized to deliver care to patients. The supply chain is generally defined as: a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer (

The Council of Supply Chain Management Professionals goes further to define supply chain management as: an integrating function with primary responsibility for linking major business functions and business processes within and across companies into a cohesive and high-performing business model. (

Considering these two definitions, the supply chain in healthcare can be expanded to the concept of the “Patient Supply Chain,” a focus on all factors influencing the delivery of products and services that generate a particular clinical and financial outcome for a patient care experience. The end-to-end Patient Supply Chain is further defined by the following components:

  • Inputs – all the people, skills, supplies, and information necessary to provide care
  • Focus – the patient-centered services with their requisite clinical workflows and processes
  • Management – approaches that facilitate efficient and meaningful communication among caregivers that allow efficient dissemination of necessary information leading to the effective coordination of care
  • Delivery – point-of-care data effectively analyzed and presented in a format to influence care delivery in addition to clinical decision support and clinical workflows to facilitate best practices
  • Analytics – sophisticated review of all available data to understand the impact of these other aspects of the patient supply chain on clinical, financial, and safety outcomes

The Patient Supply Chain model provides a broad, all-encompassing view of care delivery that links both administrative and clinical processes and workflows in the “manufacture” of evidence-based patient care. This analytical approach assigns responsibility for the clinical and financial outcomes of patient care to all members of a provider organization, rather than dividing responsibility between administrative and clinical functional units.

Expand Beyond Silos

Although administrative staff historically has focused on processes that impact their functional silo, they now must understand how their policies, processes, and workflows impact clinical care delivery. In turn, clinical staff members must now comprehend how their standards, guidelines, and workflows impact financial outcomes.

For example, ineffective purchasing by administrative staff may delay specific surgeries, leading to increased morbidity in patients (e.g., insufficient operating room supplies) and underutilized facilities (e.g., MRI scanner improperly maintained). In turn, failure to follow best practices by the clinical staff may extend the length of stay, generate non-reimbursed readmissions, and increase costs of care.

The Patient Supply Chain attempts to capture details about everything that potentially impacts care delivery and to understand the influence each factor has in isolation or combination on outcomes. The interactions between and among the factors provide valuable evidence on what provides benefit and what is harmful in providing care. Constant evaluation and re-evaluation are required to identify better practices while also ensuring that a decline in care does not go unnoticed.

Optimization through Analytics

Optimizing each part of the Patient Supply Chain with knowledge gained through analytics—statistical evaluation of the processes within the patient supply chain—incrementally improves care delivery processes and enhances clinical and financial performance.

The Patient Supply Chain model affords a valuable framework for organizations to begin to understand their care delivery process and the costs of care. By expanding beyond the commonly utilized supply chain model, it leverages proven approaches and cost-accounting techniques and applies them to the specifics of healthcare delivery. Organizations hoping to survive in the current competitive phase of healthcare delivery and declining reimbursements must embrace this detailed model to best understand how they deliver care, the cost of that care, and the steps necessary to reformulate the care they provide to be safe and high quality while delivered at the lowest cost.

If you’re interested in learning more, please download the following thought leadership: The pivotal role of technology in federal healthcare; How value based supply chain supports value based care

Barry P. Chaiken, MD, MPH

Barry Chaiken is the president of DocsNetwork Ltd. and has more than 25 years of experience in medical research, epidemiology, clinical information technology, and patient safety. He is board certified in general preventive medicine and public health and is a fellow, and former board member and chair of HIMSS. At DocsNetwork, Chaiken worked on quality improvement studies, health IT clinical transformation projects, and clinical investigations for the National Institutes of Health, UK National Health Service, and Boston University Medical School. He is currently an adjunct professor of informatics at Boston University’s School of Management. Chaiken may be contacted at

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