Guest editorial

Citation

Battini, D. and HassiniVassiliki Manthou, E. (2013), "Guest editorial", Strategic Outsourcing: An International Journal, Vol. 6 No. 1. https://doi.org/10.1108/so.2013.35706aaa.001

Guest editorial

Article Type: Guest editorial From: Strategic Outsourcing: An International Journal, Volume 6, Issue 1

International healthcare systems are under increasing pressure to reduce waste, eliminate unnecessary costs while improving quality and consistency of the care they provide to patients. In the last decade the healthcare supply chain complexity increased exponentially due to the high variety in health services provided. According to the Statistical Office of the European Communities, by 2060, 30 percent of the population of the 27 EU countries will be over 65. This means that there would be only two persons of working age for every person aged 65 or more in 2060, compared with four persons to one today. Thus, the ageing of populations would be an important driver of health and long-term care expenditures in the coming decades. However, other factors also come into play in the determination of the evolution of the healthcare sector. First of all the necessity of reducing adverse events and their associated costs, such as medical errors in drugs prescription and administration and errors in transfusion management and in the pre-analytical phase, while at the same time improving patient’s safety (COM, 2004). The lack of standardized identification procedures for patients and materials and of efficient health information systems leads to increases in human errors and adverse events risk. Moreover, there is an urgent need of reducing hospitalization and encouraging disease management and treatment at the point of need, through more precise assessment of intermediate care services, as underlined by the European Commission in the EU’s Second Health Programme (2008-2013).

According to this EU’s Programme guidelines, the sustainable delivery of quality healthcare at affordable cost is the major challenge for European healthcare systems in the next future. The development of new advanced healthcare management and logistic models and tools is the primary key to implement these changes and obtain a reduction in future healthcare expenditure without compromising quality of care.

With the same pressure, in many other parts of the world, Governments are calling for similar initiatives. International leading experiences (i.e. the UK National Health Service and the Canadian healthcare networks) demonstrate that the implementation of integrated Supply Chain Management leading practices by public healthcare organizations would yield significant savings (i.e. inefficient and redundant processes reduction) and better focus on its core: the patient care mission.

Under such circumstances, there is no doubt that outsourcing strategies in the healthcare sector are rapidly gaining popularity among government, industry and academia in both developed and developing countries. Outsourcing has widely been considered as one of the major means of improving both the competitiveness and effectiveness of companies (Quinn, 1999). Focusing on core competencies and outsourcing the rest to specialized suppliers has been the trend for decades, especially in manufacturing industries. Addressing key questions such as “How does outsourcing work in the healthcare sector at present?” and “How should it work in the future?” is of pivotal importance to support current efforts to modernise and optimize the sector and eventually improve quality of healthcare provision – and consequently, quality of life – in the future. Outsourcing strategies affect logistics in particular, where the need for process integration is a challenge that calls for new ways to share responsibilities among supply chain partners. Thus, by coupling outsourcing and logistics issues we can achieve important results in the healthcare setting and generate important annual savings in public expenditure. Well designed logistics systems have in fact an important role in reducing waiting time for patients, granting a rapid service and minimizing days of staying in the hospital for the patient (Battini et al., 2013). Moreover, the need of efficient inventory management techniques and of accurate supply and storage systems is recognized from healthcare professionals. Theory and practice demonstrates that the implementation of outsourcing and logistics techniques that were originally designed for industrial productive firms, can achieve great success when applied to the healthcare sector (i.e. Wagner, 1990; Wilson et al., 1992; Nicholson et al., 2004; Persona et al., 2008; Kumar et al., 2008; Carmody, 2008). Despite the advances, progress has been moderate due to barriers typical of the healthcare sector such as: the criticality of the service provided to customers, breadth of products, materials and services purchased, law-oriented instead of efficiency-oriented processes/culture, great power of suppliers (i.e. drugs and hospital materials), and lack of management centralization.

This Special Issue (SI) comprising of five papers is focused on the areas of sustainable procurement and strategic outsourcing in the healthcare sector. The SI will explore how sourcing and outsourcing knowledge today can meet the healthcare sector requirements providing evidences trough real cases. Papers were selected on the basis of fundamental ideas/concepts rather than the thoroughness of techniques deployed. It is our pleasure to recognize that three papers out of five have been jointly developed by academics and healthcare managers. All the five works have been promoted and supported by a healthcare national agency. The papers are organized as follows.

The first two papers discuss the implementation of vendor managed category management in the healthcare setting. The Vendor Managed Inventory concept (VMI) is a good example of an innovative way of using outsourcing in process reengineering (Waller et al. 1999). VMI is an operating model in which the supplier takes responsibility for the inventory of its customer. In a VMI partnership, the supplier makes the main inventory replenishment decisions on behalf of the customer (Waller et al., 1999). However, VMI has not gained widespread diffusion and acceptance in the healthcare supply chain.

In the first work, Guimarães et al., investigate how VMI benefits serve lean purposes in healthcare and why its outcomes can be difficult to achieve in healthcare settings. An in depth case study of VMI is presented in the perspective of the downstream member, a public general multi-site hospital, operating as a small scale consolidated service center in terms of material management, exploring dimensions as: VMI benefits, risks, barriers and enablers. Despite some unawareness of VMI benefits in healthcare, the authors conclude that VMI can present a waste reduction solution not only in costs but in the quality of care provided. The challenge is to overcome the idiosyncratic barriers of the healthcare sector.

The second work, written by Stanger, is dedicated to a well-known critical healthcare topic: the blood supply chain management. Stanger presents and discusses 13 case studies developed in German hospitals in order to understand the feasibility of VMI in the German blood supply chain. The paper contributes a generic framework for assessing the implementation of VMI in seven steps. The author proposed that hospitals hesitate entering a VMI relationship for critical resources such as blood since hospitals fear losing control over most critical resources.

The other three papers presented in this Special Issue are respectively dedicated to three different and challenging healthcare topics: the drug inventory management and distribution, the waste management and the de-hospitalization process. In these three papers strategic outsourcing and logistics procedures are successfully coupled and integrated in order to achieve great benefits and savings in annual public expenditure.

Azzi et al. investigate the question “who manages drug logistical processes along the healthcare supply chain?”. The authors explore outsourcing enablers and barriers typical of the healthcare sector and discuss the implications of centralizing the management of a cluster of hospitals and outsource drug inventory management and distribution activities to a third party at the same time. Azzi et al. elaborate a system dynamics model based on a local Italian healthcare network in order to quantify outsourcing benefits in terms of economics and quality of the service provided. The sensitivity analysis developed by the authors demonstrates that logistics outsourcing is often more economical in respect to the self management approach. In particular, the authors conclude that the Partial Logistics Outsourcing scenario (in which logistics operations will be outsourced to a service provider, while the distribution hub is still owned by the Local Healthcare Agency) is able to guarantee about a 23 percent of saving in annual drug management costs.

In the fourth paper, Marchetti and Giacchetta develops a measurement campaign (based on a self assessment model) to understand the waste flow in an Italian hospital with the purpose of having a complete overview of the waste stream and of the personnel behavior in managing and handling waste. They investigate both self-managed outsourcing procedures. The authors investigate the effectiveness of outsourcing the waste management service in terms of cost reduction and efficiency improvements and of the limits performed.

Finally, the last paper developed by Mossa et al. provide a change in perspective in relation to other studies by investigating the outsourcing of clinical services to patients’ homes by de-hospitalization. De-hospitalization can lead to efficiency improvements with regard to the usage of scarce public economic resources. The authors discuss the effects of different de-hospitalization strategies and the potential for outsourcing clinical services. The approach adopted by the authors is based on the “patient pathway” perspective. Starting from the identification of specific care pathways (the research focuses on cardiac patient pathway), all the feasible care paths in a given healthcare district are mapped in order to evaluate the practicability of the de-hospitalization. A heuristic approach based on discrete-event simulation modeling is proposed. The methodology and the simulation model have been validated with reference to field data derived from a full-scale case study carried out within a southern Italy healthcare district. The guest editors wish to thank all the authors of this Special Issue for contributing the high quality papers. We would also like to thank the Editor of SOIJ for the support and efficient collaboration and all referees who have critically evaluated the papers within the short stipulated time. Finally we hope the reader will share our view and find this Special Issue very useful.

Daria Battini, Elkafi HassiniVassiliki ManthouGuest Editors