Awareness, Access, Affordability: Healthcare supply chain design for underserved communities

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Awareness, Access, Affordability Healthcare
supply chain design for underserved communities

• August 10, 2008
• Emily Kohnke, PhD Candidate
• Kingshuk K. Sinha, PhD (Advisor)
• Karen Donohue (Member)
• Susan Meyer Goldstein (Member)
• Ernest Davenport Jr. (Member, Educational
  Psychology)
• Operations and Management Science Department
• Carlson School of Management, University of
  Minnesota
• mcilv004_at_umn.edu

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Research Introduction

• Practical Contribution
• Inform managers in the health care industry
  NGOs of the necessity and nature of fostering the
  flow of information, products and finances
• Academic contribution
• Uncover nature and interconnections among supply
  chain coordination elements
• Understand supply chain innovation necessary to
  be successful in emerging economies
• Research Questions
• How do financial services systems, logistics
  management systems and knowledge sharing systems
  as a complementary bundle of practices influence
  awareness, affordability and access in delivering
  device-centric healthcare to unserved and
  underserved communities?
• How does the type of training provided (off-site,
  on-site, team based, individual, seminar,
  hands-on demonstration) affect the number of
  cases treated at the site and site evaluation
  scores (quantity and quality of outcomes)?
• Does the awareness construct relate to the access
  and affordability constructs in the predicted
  way?
• Methods In-depth case study, cross-sectional
  survey, secondary data analysis
• Unit of Analysis patients, supply chains
  (networks), hospitals
• Stage in Research will defend proposal Fall
  2008 (Started case study data collection)

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Motivation Background

• Healthcare needed for chronic diseases in
  unserved and underserved communities around the
  world
• CVD account for 1/3 of the total deaths worldwide
  (Murray et al., 2002)
• 47 million uninsured or underinsured in U.S.
  (CIA, 2007)
• Low cost product approach not sufficient
• Lowcost device post-mortem
• Successful products address more than just
  affordability (Chesbrough et al., 2006 Prahalad,
  2005)

Healthcare for chronic diseases like CVD is an
unsolved global problem
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Cardiovascular Disease (CVD) Perceptions vs.
Facts
Major Causes of Death In Persons of All Ages In
Low and Middle-Income Regions
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Care as a Product Bundle of .
New Biologics
Invasive Procedures
Devices
Drugs
Diet Exercise
Payment/ Reimbursement
Tourism
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Health Care Supply Chain A Value Based
Perspective
Health sector supply chain refers to the
information, supplies, and finances involved with
the acquisition and movement of goods and
services from the supplier to the end user in
order to enhance clinical outcomes while
controlling costs. (Burns 2006)
Developer ? Producer ? Purchaser ? Payer ?
Provider
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Health Care Supply Chain from End-to-End Linking
the Development of Care to the Delivery of Care
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Research Question

• How do financial services systems, logistics
  management systems and knowledge sharing systems
  as a complementary bundle of practices influence
  awareness, affordability and access in delivering
  device-centric healthcare to unserved and
  underserved communities?

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Appeal and Outcomes

• Provides a general framework for the essential
  elements and their interdependencies that must be
  considered when introducing a new product or
  service in an emerging economy.
• Uncover the essential nature and interconnections
  among the supply chain coordination elements of
  the flow of information, products, and finances

Organizations need to innovate to handle the
coordination elements
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Care-Centric Medical Device Supply Chain Key
Elements
Demandt f (Affordabilityt, Accesst, Awarenesst)
1Given either a lack of facilities and operators
for percutaneous interventions or long distances
to such facilities in many developing countries,
we did not evaluate this procedure. (Gaziano et
al. 2005, p. 651)
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Literature Theory

• Innovation Diffusion Theory Complexity Science
  or the study of complex adaptive systems (CAS)
• Healthcare organizations described as complex
  adaptive systems (CAS) (Anderson and McDaniel
  Jr., 2000 Anderson, Corazzini-Gomez, and
  McDaniel Jr., 2002 Anderson, Issel, and
  McDaniel, 2003 McDaniel Jr. and Driebe, 2001)
• Complexity results from the number of players,
  the need to enter into new markets, the speed
  with which new products arrive in the market and
  the need to reduce costs (Hoole, 2005 Tierney,
  2004 Wilding, 1998)
• Knowledge in the supply chain is a major
  determinant of success (Hult et al., 2006 Hult,
  Ketchen Jr., and Nichols Jr., 2003)

Literature support for Awareness, Access and
Affordability individually
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Literature Theory cont

• Diffusion of innovation does not only concern the
  innovation that is being offered to the consumer.
  (Rogers , 2003)
• Radical innovations (involving 3 simultaneous
  innovations) are difficult to implement
  (Stieglitz and Heine, 2007)
• Innovations used in western economies are likely
  to fail when implemented in the radically
  different cultural context of many emerging
  economies (Swaminathan 2007)

How do we think about healthcare innovation in
emerging economies?
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Framework controls

• The care design construct is conceptualized to
  include the ideas of the price and features of
  the product bundled with the services necessary
  to deliver the product to the customer
• Unit of Analysis
• Patient
• Care delivered but influenced by organizational
  factors
• Multi-level considerations
• Controls
• social structure (culture)
• regulatory environment
• reimbursement (private pay versus insurance
  versus government provided)

Controls are specific to the industry
environment for this particular study
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Model Propositions 1 2

• Proposition 1 The level of logistics management
  systems innovation positively mediates the impact
  of care design and innovation on demand
  realization.
• Proposition 2 The level of logistics management
  systems innovation has a direct positive impact
  on the demand realization.

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Model Proposition 3

• Proposition 3 The level of knowledge sharing
  systems innovation positively moderates the
  impact of care design and logistics management
  systems on demand realization.

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Model Proposition 4

• Proposition 4 The level of financial services
  systems innovation positively moderates the
  impact of care design and logistics management
  systems on demand realization.

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Data Sources

• Empirical Context
• Childrens Heartlink
• Potential
• National Cardiovascular Data Registry
• Examination of diabetes test strip market data
• Questionnaire administered to MDISCC and / or
  AdvaMed professionals
• Meta-analysis of cases from existing literature

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Current Data Source

• Childrens Heartlink
• International medical nonprofit, building
  sustainable programs to help enhance existing
  pediatric cardiac programs through on-site and
  off-site training provided by volunteer teams and
  consultants, technical assistance and resources
  (funding, equipment and supplies) to support
  life-saving treatment for needy children.
• Questions
• How does the type of training provided (off-site,
  on-site, team based, individual, seminar,
  hands-on demonstration) affect the number of
  cases treated at the site and site evaluation
  scores (quantity and quality of outcomes)?
• Does the awareness construct relate to the access
  and affordability constructs in the predicted
  way?

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CHLs Supply Chain Role

• Examine history of one partnership to uncover
  incidents of the model elements in the
  relationship over time.
• CHL role as broker for the relationships allows
  us to see how these elements evolve over time

Medical Device Manufacturers
Childrens Heartlink
Emerging Market Hospital Care Delivery
Physician Training
Allied Health Professionals
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Data Collection
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Initial Results

• Large volumes of observations for all three
  constructs
• Access construct mentioned more than Awareness
• Site evaluation begins with assessment of access
  potential access factors
• Outcomes reflect increased delivery of care
• Lack of focus on Affordability may be dampening
  this effect

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Next Steps

• Activities
• Stage 2 Collect data from interviews (CHL staff
  and medical volunteers Partner site staff)
• Stage 3 Travel on mission and observe outcomes
  (interview partner site staff)
• Analysis
• With the completion of the next two stages
  triangulation of evidence will be achieved
• Final analysis of the patterns in the data to
  investigate propositions in general framework as
  well as specific hypothesis related to the
  effectiveness of training by type

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Thank You!

• Globalization is like gravity theres no point
  denying its existence. Our job is to defy gravity
  
• and build a plane that flies.
• Our responsibility is to secure the benefits of
  globalization for all, to turn despair into hope
  and poverty into opportunity.
• C.K. Prahalad

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Appendix A

• Diabetes test strip market data

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Test Strip Market Data

• How to identify the constructs in the U.S. Test
  Strip Market
• Affordability coupons Together Rx Access
• Awareness DTC commercials
• Access ADA lowers threshold for diagnosis

Back
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POPULATION DIAGNOSED WITH DIABETES CONTINUES TO
GROW AT A STEADY PACE
7.5
Annual growth in population diagnosed with
diabetes (U.S.)
ADA lowered threshold for Type 2 diabetes from
140 mg/dL to 126 mg/dL in late 1998
Key factors contributing to increase in diagnosed
with diabetes

• Increased patient and physician awareness
• Changing definition of diabetes

CAGR 2002-2006 Percent

• 1998

• 1999

• 2000

• 2001

• 2002

• 2003

• 2004

• 2005

• 2006

Total diagnosed with diabetes Millions
8.9
9.3
9.8
10.7
11.5
12.5
13.4
14.5
15.6
7.8
0.8
69
70
71
71
71
72
Percent diagnosed Percent
Source Roper Starch Morgan Stanley LFS Team
analysis
Back
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The Market Model
Experienced Testers
Source of Communications Awareness OneTouch
Ultra
Diabetes Magazine or Journal TV In-store Display
at a Drug Store On Shelf Packaging At the
Doctor's Office Newspaper or Circular General
Consumer Magazines Direct Mail Internet Radio Outd
oor
E
Back
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TV Advertising Ultra/UltraSmart
TV media has increased sharply in 2004 with a
greater proportion of 15 second commercials which
helped to lower costs. Hispanic media was also
up strongly.
2003
2004
TV (A50 GRPs) Spending Cost Per GRP 30s
15s Hispanic (GRPs)
3,659 11,103 3,034 1,618 2,042 1,192
6,237 16,788 2,691 1,983 4,265 2,542
70 51 -11 23 109 113
Back
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Appendix B

• Questionnaire administered to Medical Device
  Supply Chain professionals

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Info on MDISCC

• Formed in 2004 by Supply Chain and Operations
  executives from leading Medical Device
  manufacturers. The Council is an informal network
  of senior industry executives who are focused on
  identifying opportunities to improve the industry
  supply chain through
• Focusing on global supply chain issues facing
  Medical Device companies
• Taking an end-to-end view of the supply chain -
  from Manufacturers to Providers
• Influencing industry standards that directly
  impact operational efficiency and effectiveness
  for all members of the supply chain
• Sharing of leading practices and case studies
  from both inside and outside the Medical Device
  industry

Back
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Advamed

• The world's largest medical technology
  association representing manufacturers of medical
  devices, diagnostic products and medical
  information systems.

Back
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Appendix C

• Secondary Data Source National Cardiovascular
  Data Registry (ICD implants nationwide)

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• To improve the quality of cardiovascular patient
  care by providing information, knowledge and
  tools implementing quality initiatives and
  supporting research that improves patient care
  and outcomes.
• ICD Registry Began in June 2005. It was
  developed in partnership with the Heart Rhythm
  Society. The ICD Registry includes all required
  data fields for CMS (Centers for Medicaid and
  Medicare), as well as optional extended
  information.
• Patient, facility and provider characteristics
• Device type and characteristics
• Device interrogation for firing data
• Adverse event rates and much more!

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Another Project

• Causes and Consequences of Variation in Physician
  Training An Empirical Analysis of ICD Implants
• Applied for access to the ICD registry which is
  used to evaluate the best practices of treatment
  using implantable cardio defibrillators in
  Medicare and Medicaid patients (also includes
  many private insurance ICD implants) throughout
  the US

Research with Stephen C. Hammill, MD, FHRS,
FACC
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Research Questions

• What are the factors affecting the type of and
  variation in physician training for ICD
  implantation?
• What is the relationship between the type of and
  variation in physician training and the type and
  volume of ICD implanted?
• What is the relationship between the type of and
  variation in physician training the type and
  volume of ICD implanted and the quality/clinical
  outcomes and cost/operational outcomes?

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U.S. Health System

• From new survey of patients in 7 industrialized
  countries Americans were the most likely to go
  without care because of costs. Fully 37 percent
  of the American respondents said that they chose
  not to visit a doctor when sick, skipped a
  recommended test or treatment or failed to fill a
  prescription in the past year because of the
  cost (NYT, Nov 1, 2007)
• In the end, we cannot look at insurance
  coverage, medical costs, quality of care and
  information technology as separate issues. (Paul
  ONeill in NYT 2007)

Resolving problems in healthcare systems
requires holistic perspective