National Science Foundation
University of Arkansas
According to a report by the National Coalition on Health Care (www.nchc.org/facts/cost.shtml) healthcare spending in the United States was $2.4 trillion in 2007. This equates to $7,900 per person and represents 17% of GDP. Moreover, healthcare expenditures increased 6.9% in 2008, which was two times the rate of in ation. Despite this spending, inecient healthcare supply chains still can cause patients to not receive the medications they need. We investigate a topic that is costly and has the potential to harm patients: pharmaceutical unavailability due to excessively lean supply chain congurations. We propose to explore cost vs. risk tradeos in healthcare supply chains by examining the impact of sourcing and inspection policies on supply chain performance. It is simply not acceptable to suffer from inventory shortages when patients’ lives are in jeopardy. We have assembled a diverse, multi-university team of researchers and healthcare partners that are uniquely
qualied to tackle the theoretical and practical aspects of improving the healthcare supply chain.
Intellectual Merit: Improving pharmaceutical availability in the healthcare supply chain is a challenging engineering problem. We propose to perform one of (if not) the rst systematic evalua- tion and quantication of risk in healthcare supply chains. New research is essential, as the patient dimension does not allow for simple mapping of existing production and/or supply chain models to the healthcare domain. Our research eorts will lead to the introduction of new, quantiable risk metrics for healthcare using domain-specic/appropriate metrics like patient quality of care and cost (as opposed to standard supply chain metrics such as on-time delivery, ll rate, and customer
satisfaction). Finally, by developing a framework for assessing risk vs. cost tradeos in supply chain design, we will explore the impact of both correlated supply chain failures and inspection policies on creating robust supply chains. Our research results will yield significant insights into appropriate uses of redundant capacity allocation and risk-effective sourcing/inspection decisions for practitioner use during supply chain design/re-design in any application domain. Broader Impacts: As all people at some time in their lives require healthcare, improving phar- maceutical availability through robust supply chain design strategies will help to ultimately lead to improved patient outcomes and quality of care. This research eort will allow for the transfer of re- search results and understandings to hospitals and hospital provider networks (see enclosed letters
of research proposal interest and support) and provide guidelines/recommendations for appropri- ate supply redundancy depending on medical importance and signicance. We will disseminate healthcare supply chain ndings to important research center constituencies such as CELDi and the Center for Innovation in Healthcare Logistics (CIHL) at the University of Arkansas. CIHL partners, one of whom is VHA, an organization that manages/operates 2800+ hospitals nation- wide, will benet by understanding how decisions made by their supply base can ultimately affect healthcare delivery. Our research team will train graduate students (through GRA appointments) in the research process and leverage CELDi research center relationships and participant knowl- edge through fall and spring center meeting presentation and poster sessions. All three partnering universities are committed to diversity and will maintain this commitment during the selection of research sta and graduate students for this project. We will leverage healthcare’s attraction to often underrepresented groups in engineering (females and minorities) while building our research team. In addition to graduate student mentoring, this proposed research will develop the research skills and aptitude of three new, diverse faculty members at three unive