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Healthcare's Cottage Supply Chain Needs a Makeover

Mike Alkire, for HealthLeaders Media, August 19, 2011

Healthcare represents one of the largest segments of our economy, yet in many ways it still operates as a cottage industry of individual actors.

Atul Gawande, MD, addressed this phenomenon during this year's commencement address at Harvard Medical School. He explained that medicine was developed in an era when "doctors could hold all the information patients needed in their heads. And they could manage everything themselves." But today, "medicine's complexity has exceeded our individual capabilities."

What's true for doctors is also true of our healthcare supply chain. Once, it was acceptable for materials managers to toil away in isolation, focused exclusively on contract compliance and getting the best price for everything needed in the acute care setting. Each supply chain actor, including the manufacturers designing products, the materials mangers making the purchases and doctors using the products in the course of care, operated alone in isolated silos.

It's no longer acceptable, but it's still happening. It's a myopic process compared to what can and should be happening in healthcare. It is this fragmentation, both within an individual facility and across the healthcare industry overall, that keeps us from realizing greater system-wide advancements in care delivery.

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