Supply Chain Management

A high-reliability healthcare supply chain: beyond the clinician

June 11, 2019 11:02 pm

Can the healthcare supply chain emulate the clinical high-reliability-organization model to support the complexity of operations and risk?

Note: This content is sponsored by Nexera. The author (pictured below) will be co-presenting “Healthcare Disrupted: Supply Chain Transformation Through High Reliability” on Wednesday, June 26 at HFMA’s 2019 Annual Conference in Orlando.

“First, do no harm.” It’s a basic medical precept, yet patients are harmed every day. Over the last 10 years, significant effort has been devoted to reducing medical errors and improving patient safety through numerous methodologies, including a high-reliability-organization (HRO) approach. Initiatives based on HRO concepts have been used in an effort to reduce various types of medical errors.

But how effectively can hospital errors be reduced if these concepts are applied only to select organizational stakeholders, predominantly clinicians? For hospital administrators and supply chain professionals, that’s an important question.

What the HRO approach entails

Many industries (such as airlines, firefighting units and nuclear power operations) have ­­­­­­­employed a variety of strategies for delaying or avoiding catastrophes by adhering to the five primary HRO principles:

HROs have a preoccupation with failure. They have a relentless commitment to preventing mistakes. Staff remains alert to the smallest sign that a new threat may be developing.

HROs are reluctant to accept “simple” explanations. They understand that threats to safety can be complex and may present themselves in myriad forms. HROs have an ability to identify subtle changes and encourage early recognition of problems (when a problem can be easily fixed) versus late recognition (when a problem is already out of control).

HROs are sensitive to operations. HROs recognize that the earliest indicators of threats typically appear in small changes. They take great pains to ensure that all staff report any deviation from expected performance. They engender an environment where employees not only feel free to speak up, they feel an obligation to speak up.

HROs are resilient. HROs recognize that despite best efforts and past successes, errors will occur. They identify errors quickly and contain or solve them, preventing further harm and bigger problems.

HROs value expertise. When confronted with a new threat, HROs have mechanisms in place to identify who has the greatest expertise relevant to managing the situation. They give decision-making authority to that person or group. HROs don’t rely on organizational hierarchy.

Applying HRO principles to the healthcare supply chain

In healthcare, supply chain management is the process of administering a hospital’s expendable assets. Those assets are the supplies necessary to run healthcare operations and deliver patient care. Hospital stakeholders often view inventory management as the main (if not the sole) function of the supply chain department, with clinicians relying on supply chain staff to ensure that patient care products are in the right place at the right time. There are multiple aspects of the supply chain beyond inventory (e.g., contracting, sourcing, purchasing, accounts payable, clinical value analysis), but inventory and logistics are what clinical staff see and interact with on a daily basis.

Concentrating a strategy for improvement on one specific area doesn’t yield optimal results. That’s why an organization-wide HRO strategy is valuable for hospitals, which constantly face the risk of catastrophe. Drawing on lessons learned from successes in other complex, high-risk industries, the initial discussions about whether HRO concepts might prove valuable in reducing patient-safety errors entered the medical literature in 1994 and were reintroduced in 1996, when the National Patient Safety Foundation of the American Medical Association was formed. Adapting and applying these lessons to healthcare offered the promise of enabling hospitals to reach levels of quality and safety that would be comparable to those of the best HROs in other industries.

Given the uncertainty in payment and the ever-changing healthcare environment, HRO concepts are even more valuable today than in the 1990s. Despite financial, clinical and technology drivers, acute-care operations generally struggle to achieve widespread, consistent quality improvement. Achieving consistently high quality in any department is an accomplishment, and that standard must be expanded enterprise-wide for a hospital to become a true high-reliability organization — with the emphasis on organization.

Supply chain inventory management can have a ripple effect on downstream operations. For one, inventory management controls and processes must be applied from the moment products arrive on the receiving dock. Then there are the risks associated with product demand, seasonality, item back-orders and allocations, technology and so on that directly impact patient care. Anticipating demand and performing the calculations associated with inventory replenishment are specific to inventory management, as are processes for handling specialty items — especially those for the perioperative and procedural areas. Patient care can suffer if a surgeon or clinician doesn’t have the right product at the right time, or a pediatric ICU nurse can’t find a needed supply quickly. To be most effective, the HRO concept must be applied to an entire health system’s culture, operations and technology infrastructure, given that many organizational functions are complex and high-hazard.

Expanding HRO implementation for maximum impact

In healthcare, not only do HRO concepts need to be expanded to continuously drive improvement, but so must the implementation methodology be expanded to support holistic organizational efforts, specifically in supply chain management. The quest to deliver consistently safe, high-quality patient care means that the end of a provider’s journey to become an HRO is really just the beginning of institutionalizing quality across all departments, employees and processes. Healthcare organizations will likely need to make fundamental changes in their approach to quality by embracing a cultural paradigm shift, engaging all stakeholders at all levels and valuing the expertise that individuals bring.

Should healthcare supply chains emulate the clinical HRO model to support the complexity of operations and risk? Of course they should — and all other organizational stakeholders should as well. But will they? That is the question.


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