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Advancing the Health Sector Supply Chain Through Research and Knowledge Leadership

Health Sector Supply Chain Research Consortium (HSRC-ASU)United States

Topic(s): Community Engagement
Department of Supply Chain Management
Funding Source:
Type of Institution:
60,000 (2010)
Highest Degree Offered:
Project Contact Information:
Eugene Schneller
Dept. of Supply Chain Management
W.P. Carey School of Business/Az. State University
United States
Email Address:


Established in 2002 following a day-long focus group with providers, group purchasing organizations, IT companies, distributors, payers, and business leaders, the Health Sector Supply Chain Research Consortium (HSRC-ASU) is a business school based innovation, development and technology transfer engine. HSRC-ASU brings together competing and complimentary health care organizations that collaborate to solve complex cross-cutting problems in the health care supply chain, elevate standard of management, and delineate managerial strategies that optimize cost and clinical effectiveness, safety and sustainability. HSRC-ASU is unique in its ability to incorporate business partners and business faculty, social scientists, physicians and clinicians into its R&D process.

HSRC-ASU has (1) provided analysis of incentive programs designed to advance physician-hospital engagement (2) crafted metrics to evaluate supply chain performance (3) scrutinized the mix of supply chain information technologies (4) assisted in application of Web-2.0 technologies to solve health care supply chain problems and enhance communication (5) been an early leader in evaluating comparative effectiveness research in the health care supply chain (6) assessed and disseminated international progressive health care supply chain practices across national and cultural barriers (7) generated intellectual capital that grounded the establishment of innovative publications such as the Health Care Financial Management Supply Chain Newsletter (8) framed agenda for the past four World Congresses for Health Care Supply Chain Management and (9) been a part of the health policy debate surrounding product identification standards. Success is recognized by publication/dissemination of research findings in premier peer-reviewed and trade journals, via sponsored webinars, professional meetings and through coverage in the professional and lay press, receipt of federal/ industry funding, and continued member growth.

Project Description

Despite supply costs being the second highest cost for hospitals, the role of supply chain in optimizing cost and clinical effectiveness had been traditionally undervalued. Additionally, although the non-health care supply chain was viewed as a strategic asset to its organization, the health care supply chain has been viewed tactically. In a time of escalating health care costs, innovative research and thought leadership surrounding the health care supply chain was lacking.

HSRC-ASU was spearheaded by Eugene Schneller, PhD, a long-term professor of health management and recipient of the Filerman Prize for Educational Leadership. In 2000, ASU Professors Eugene Schneller and Larry Smeltzer, recognized as one of the founders of the modern field of supply chain management, had a dialogue regarding the lack of effort to advance supply chain management to improve health care delivery. They mused that although the school of health management and policy and the department of supply chain management were on adjacent floors within the business school, virtually no supply chain management students took course work in health services management and virtually no health services management students took course work in supply chain. Those destined to lead multimillion dollar health care delivery systems would enter the field with virtually no understanding of the department that would be contributing to their second largest spend. In 2002 the National Science Foundation’s Center for Health Management Research provided Schneller and Smeltzer with a grant of $100,000 to flesh out the key deterrents to health care supply chain excellence. The results of their work are reported in Strategic Management of the Health Care Supply Chain. They discovered very little research in the area of the health care supply chain and observed that managers in major supply chain companies were not prepared to craft strategies to engage the health care marketplace.

Mark McKenna, then President of Novation, encouraged further research and provided support to bring experts together, from across the United States and Europe, to consider how to both define and advance the field of health care supply chain management. The experts generally agreed that this was a highly neglected area and there was no key funding source for large scale research. Most research on supply chain had been carried out by NSF without a focus on health and most research on health care delivery issues, funded by HHS through vehicles such as NIH, AHRQ or CMS focuses on the issue of medical devices or supplies. Initial funding, it was decided, would have to be internal and a business plan was crafted based on successful NSF Industry/University Cooperative Research Center principles. A unique design feature is that HSRC-ASU was heterogeneous in membership. It would bring together competitors from sector-wide organizations to work together to identify and address cross-cutting issues.

HSRC-ASU also would build health care competencies and interests across the faculty at the W. P. Carey School of Business. Faculty from virtually all W. P. Carey departments were present at the initial focus group meeting. HSRC-ASU was the first industry-university based health care supply chain research effort in the United States that brought together all health care industry stakeholders- providers, GPOs, suppliers, distributors, health IT, physicians and other clinicians as partners with university researchers to generate research leading to innovation in the field. HSRC-ASU was innovative in its use of annual research dissemination conferences that involved member participation to define project staging and to determine best ways to further disseminate findings throughout member organizations and the industry.

Project Results

HSRC-ASU has raised the visibility of the health care supply chain, provided innovative strategies and tools to the field and influenced policy and practice. This is evidenced by:

(1) Publication of research findings in Health Affairs and Milbank Quarterly with translation of findings in trade journal publications, webinars, and presentations at numerous conferences.
(2) National recognition of HSRC-ASU in Healthcare Purchasing News naming Eugene Schneller as one of the principal leaders to watch in the field.
(3) Recognition of the value of HSRC-ASU supported research on gainsharing as evidenced by an NIH RO1 grant ($450k)
(4) Creation of a unique metrics assessment tool supported by the AHA.
(5) Tool associated with physician engagement strategies developed and disseminated to hospitals across the US.
(6) Recognition of the value of health care supply chain research as evidenced by invitation to join CHOT, an NSF Center.
(7) Participation through invitation by HSRC-ASU Co-director Natalia Wilson, MD, MPH in FDA, ONC and GS1 meetings and committees pertaining to product identification.
(8) Growth in HSRC-ASU membership since inception to 14 industry leaders who represent over three quarters of the purchasing power of the US health care industry. Membership revenues have been over $1.5million to date.

Additional Resources:

"The Consortium interactions constitute a 'boiler-room' for new ideas, leading us to engage the field in innovative ways to drive value and achieve savings" (Derek Paterson, Chief Operating Officer, Craneware)

"The Consortium has provided the healthcare industry unbiased, comprehensive research." (Jo Klein, Vice President, Strategy, Planning and Research" (Novation)

"The annual dissemination conference provides a forum for the presentation of successful case studies in supply chain best practices." (Michael Hildebrandt, Associate Vice President, Scottsdale Healthcare)

"... Eugene Schneller, Ph.D., director of health sector supply chain initiatives and professor of health management and policy at Arizona State University’s W.P. Carey School of Business, Tempe, AZ, raised eyebrows and turned heads with his extensive and critical analysis of contemporary supply chain management through published works and public speaking. Schneller is one of two educators that has picked up the baton from the late Dean Ammer." (From Healthcare Purchasing News)

"Gainsharing reduced hospital costs by 7.4% or $315 per patient. This means that nationwide use of gainsharing could slash costs for coronary stent patients by $195M per year." Jonathan Ketcham, commenting on HSRC-ASU project in: Hospital-Physician Gainsharing in Cardiology. Health Affairs 27. No 3 2008. 803-812.

For a list of Consortium publications see:

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