Efficient Healthcare Consumer Response

There are a number of reasons why the health care industry needs to look at how they manage their supply chain. The main ones—cost and risk. According to Bradley (2000), how weU or badly the health care supply chain is managed is a major factor in health care costs . During the mid-1990s, the Efficient Healthcare Consumer Response (EHCR) (EHCR 2000) performed its own major supply chain... 

In order to facihtate communications between software used by internal supply chain partners, multinational companies have tried very hard, but generally unsuccessfully, to standardize computer systems. The emergence of the Internet protocol has helped the interaction between powerful supply chain systems such as i2, Manugistics, Ariba, Oracle and SAP R/3 to name a few. The rigour and problems related to the vahdation process still remain. In spite of the complexity and regulatory requirements, or perhaps because of it, the healthcare industry remains a huge untapped market for e-supply chain. A recent study carried out in the USA by Efficient Healthcare Consumer Response (EHCR) consortium showed that the healthcare industry could reduce its overall supply chain costs by over US 11 billion (48 per cent of the current process cost) through the efficient application of collaborative e-supply chains. 

These benefits not only accrue to the individual, but to society as well. The resource savings to the healthcare system through responsible self-medication allows better allocation of limited healthcare resources and physicians time to important issues beyond the scope of self-care. It is inconceivable to consider the tremendous economic strain it could impose on the healthcare system if every consumer chose to visit a physician for every minor illness. Health centers would be overwhelmed and would not be able to work efficiently as illustrated by the fact that on an average each American experiences one potential self-treatable health problem every 3 days. Additionally, approximately 90% of the Americans consider themselves in poor health at least one or more times each month. Approximately 70% of consumers self-medicate on a regular basis, and an estimated 40% of the U.S. population uses at least one non-prescription drug within any given 48-hr period.Hence, easy access to nonprescription products is likely to be a priority for the American consumer. 

Traditionally, the focus of healthcare providers has been the diagnosis and treatment of the sick. This is a puU (reactive) system that attempts to satisfy the consumer only when he/she falls Ul. While a reactive response to a consumer product can lead to efficient resource utilization, it may result in high costs in healthcare. An extreme example of a pull system is the emergency room (ER) -patients delay seeing a physician for various reasons and, when it becomes a life threatening case, they are rushed to ER. Demand at an ER can be uneven and the treatment very expensive. 

---