More than two years after COVID-19 advanced the move toward home care – which was already being explored prior to the pandemic as a response to bed shortages in acute care facilities – the trend continues to evolve. It became more commonplace out of necessity during the pandemic – as clinicians leaned into virtual care for nonemergency care episodes to prevent the spread of the virus – but it is now being explored to satisfy patient preference for in-home care and recovery and is less about simple economics.
“Virtual care and home care have become more important through the pandemic,” wrote Marlin Doner, Prodigo Solutions’ Vice President of Data Analytics & Product Strategy, in his 2022 outlook on where the healthcare supply chain is headed. “Consumer preferences for a virtual experience have driven care delivery models to evolve more in the past 18 months than the past 18 years of the virtual economy.”
At the height of COVID-19, people were hesitant to visit hospitals for diagnosis and were instead turning to virtual platforms. Now, we see the market for home care evolving into post-diagnosis care and long-term recovery. The question for supply chain is: How do you maintain control of products, costs and logistics with this evolving flow of care that no longer is delivered exclusively in the hospital?
In a recent piece, Connections Drive Healthcare and Life Science Business Model Changes for 2022, Gartner® suggested that CIOs advancing healthcare and life science digital transformation and innovation should “prepare for increasingly complex acute care services to shift from the hospital to the home by investing in digital capabilities that orchestrate workflows across multidisciplinary teams.” Gartner found that “by 2025, 40% of healthcare providers will shift 20% of hospital beds to the patient’s home through digitally enabled hospital-at-home services, improving patient experience and outcomes while reducing the cost of care,” and that “a digital commerce platform and marketplace for healthcare services will connect 20% of all consumers, payers and providers.”*
Challenges for Hospital to Home
Developing models of home care seems like a natural evolution as the industry seeks to recover from the pandemic while satisfying increasing demand for scarce hospital beds. These models require new thinking around the diagnosis, monitoring, care planning and supplies provisioning that are built on a strong digital foundation that connects the patient to their care provider.
A potential challenge for healthcare systems involves Payers (the company paying for medical services, often an insurance company) recognizing home care as an extension of the care provided in the acute care facility. Early adopting health systems that act as Provider and Payer are seeing lower costs and improved patient experience across the continuum of care. They are responsible across the entire care journey and are seeking ways to optimize the experience for their patients while addressing resource shortages and cost pressures in the hospital. Patients are responding positively to the change.
However, this model introduces new risks such as real-time monitoring, doctor-to-patient interaction, and the need to control all inputs of care, so there is no degradation to the care received. Not all risk falls on supply chain, but there are areas where supply chain is an important link for in-home care. Outcomes can be impacted by poor quality or incorrect products, delays in receiving supplies and incomplete understanding of administration of the care plan.
An additional – if smaller – risk involves the reverse supply chain, or durable medical and monitoring equipment that is sent to the patient’s home that needs to be later retrieved. Tracking where the equipment is – and how to keep it maintained while in use and get it back from the patient’s home – poses an additional challenge.
A Supply Chain Strategy
The pandemic served to accelerate the move to consumerism in healthcare and while this is not new to most IDNs and their vast continuums-of-care models, healthcare provider supply chains need to maintain control of costs while ensuring the same outcomes as the inpatient experience.
Gartner defines a digital front door (DFD) as “act as the primary point of digital engagement and digital interaction with consumers.” “The DFD consists of an omnichannel communications platform (including web portals, mobile applications, SMS, and voice) used to provide multiple stakeholder groups (such as consumers, family members or ecosystem partners) centralized access to a healthcare delivery organization’s digital and analog products and services.”*
Doner said he believes supply chain will play a key role in the increasing home care trend.
“From the virtual doctor visit to in-home provisioning and delivery of care, supply chain will be the key enabler to ensure that the right item, from the right source, at the right price is delivered to the patient when and where it is needed. This will require supply chain to extend its reach beyond the walls of the hospital with the same financial controls,” added Doner.
Over the next few years, the home health care service line for hospitals is estimated to grow revenue to more than $146 billion, resulting in approximately $30 billion worth of supplies, equipment, food, and drugs being moved from the health system to the home. As a result, supply chain has an important role to play connecting and controlling the flow of goods and services.
Supply chain needs visibility into demand that is being generated in the home, whether by the care receiver or the care giver. As more care is delivered in the home, it requires systems and infrastructure to capture demand signals along with logistics to deliver everything from durable medical equipment to med surg supplies to food.
In a recent interview with Healthcare Purchasing News, Doner emphasized the need to be more transparent within supply channels to align supply with demand. Michael DeLuca, Prodigo’s Executive Vice President of Operations, noted in a 2021 piece on rethinking the post-COVID-19 healthcare supply chain that while a spirit of transparency and information sharing exhibited during the pandemic could go a long way toward helping the industry improve supply chain visibility as well as the overall quality of healthcare, there is still a long way to go.
Span of Control
Supply chain has a role in managing the bulk of home care spend. As demand moves further outside the four walls of the hospital this oversight becomes increasingly more complex. Matching spend to negotiated contracts is crucial, but if a health system can’t connect the demand signal with the supply source, they can’t manage it.
Supply chain is being asked to engage in the procurement processes for nontraditional spend categories such as durable medical equipment, med surg supplies, food, and pharmacy. As margins erode due to inflationary cost pressures, more control is required over item formularies, prices, and inventory. Leveraging best-of-breed procurement tools allows these purchase categories to connect through the same work processes as more traditional healthcare requisitioning.
Distribution and inventory models that are already perfected to supply acute care, physician offices and ambulatory surgery centers are now being asked to reach the patient’s home with contracted supplies. A majority of hospital-at-home orders are high frequency, small volume and small-dollar transactions. While these orders may make up only a minor portion of the overall spend footprint of the health system, they are more prone to loss, leakage, and delay. Options to outsource this spend portfolio to small-volume distributors may seem ideal for certain categories of spend; however, the loss of sight between the patient, their care plan, and the necessary equipment, supplies and services can put their recovery at risk.
Cost, Quality, Outcomes
The migration to home care should be an extension of in-patient experience and adhere to the same outcome objectives of the CQO Movement. The care pathway for home care can be aligned and integrated into the entire care continuum without increasing costs. Earlier adopters are already seeing improved patient experience metrics with a lower cost of care. If attention is placed on care receivers getting better quicker, requiring less resources while improving their experience, then it is a win for everyone.
Moving Beyond the Four Walls of Healthcare Supply Chain with a Mobile Marketplace
2022 Outlook: Prodigo’s view of where healthcare supply chain is headed
*Gartner, “Predicts 2022: Connections Drive Healthcare and Life Science Business Model Changes,” Pooja Singh, Barry Runyon, et al., 18 November 2021. https://www.gartner.com/en/doc/757896-predicts-2022-connections-drive-healthcare-and-life-science-business-model-change
*Gartner, “Cleveland Clinic Abu Dhabi Improves Consumer Engagement Through a Digital Front Door,” Sharon Hakkennes, Mike Jones, 24 August 2021. https://www.gartner.com/en/documents/4005085
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