HMPI

Transforming Health Outcomes in San Francisco’s Most Vulnerable Neighborhood

Kristiana Raube, Haas School of Business, University of California Berkeley; Kimberly MacPherson, School of Public Health, University of California, Berkeley, Saint Francis Memorial Hospital, Dignity Health; Jennifer Kiss, Saint Francis Foundation; and Abbie Yant, Saint Francis Memorial Hospital, Dignity Health

Kristiana Raube is associate director of the Institute for Business & Social Impact at the Haas School of Business, University of California. She is also director of both the Graduate Program in Health Management and the International Business Development Program at Berkeley-Haas, as well as an adjunct professor.

Kimberly MacPherson is the Associate Director of Health Management at the Haas School of Business and faculty in Health Policy and Management at the U.C. Berkeley School of Public Health.

Jennifer Kiss is Vice President of Programs at Saint Francis Foundation in San Francisco. The Foundation’s mission is to serve Saint Francis Memorial Hospital (SFMH) and the community the hospital serves.

Abbie Yant is the Vice President of Mission, Advocacy and Community Health at Saint Francis Memorial Hospital in San Francisco, a member of Dignity Health, and a founding member of the San Francisco Health Improvement Partnership.

Contact:  Kristiana Raube, raube@haas.berkeley.edu

Abstract

What is the message?

  • Collective impact requires meeting five conditions: (1) have a common agenda as a shared vision for change; (2) adopt a shared system to measure results; (3) experiment with new ways of working together to develop mutually reinforcing activities; (4) communicate continuously to build trust among all the stakeholders; (5) devote resources for a backbone organization to create and manage social impact.
  • Three examples illustrate game changers by Tenderloin Health Improvement Partnership: (1) Boeddeker Park, (2) Tenderloin Safe Passage, and (3) the Green Mobile Kitchen Health Education Project

What is the evidence?

  • These recommendations draw from research on collective action, together with hands on experience in the Tenderloin Health Improvement Partnership

Submitted: February 17, 2017; Accepted after review: March 1, 2017

Cite as: Kristiana Raube, Kimberly MacPherson, Jennifer Kiss, and Abbie Yant. 2017. Transforming Health Outcomes in San Francisco’s Most Vulnerable Neighborhood, Health Management Policy and Innovation, Volume 2, Issue 1.

The Setting and the Need

 “Achieving lasting impact on health outcomes requires a focus not just on patient care, but on community wide-approaches aimed at improving population health. Interventions that address the conditions in the places where we live, learn, work, and play have the greatest potential impact on our health. By focusing on these social determinants of health and on changing the context to make healthy choices easier, we can help improve the health of everyone living in a community.”[1]

Hidden in the City

In a city known for its iconic Golden Gate Bridge, cable cars, Victorian-era homes, entrepreneurship, and high tech innovation, the Tenderloin neighborhood is not the place that comes to mind when envisioning San Francisco’s highlights. The most vulnerable area in this city of opportunity, nearly one-third of Tenderloin residents live below the federal poverty line and suffer from the city’s highest chronic disease and illness rates.

After years of being San Francisco’s forgotten neighborhood, the Tenderloin began to emerge from the shadows earlier this decade. On its southern edge, high-profile technology companies were moving in, taking advantage of tax breaks incentivizing the revitalization of Market Street. In response, San Francisco’s City Hall was being pressured to “do something” about the 40-block area that makes up the Tenderloin.

At the same time, Saint Francis Foundation’s board began to look for ways to leverage its impact on Saint Francis Memorial Hospital, which serves the Tenderloin community.  Although the Foundation had given more than $50 million in grants since 1990, the Hospital still experienced twice the preventable emergency room visits compared to the rest of the city. Likewise, many social service and advocacy organizations had long focused their work on the Tenderloin, but were not integrated or coordinated. Something needed to be done to address the Tenderloin’s pressing needs, including unsafe streets, lack of open space, and limited fresh food options.

Bringing together key Tenderloin non-profit stakeholders, the business community, city government, and philanthropy, the Tenderloin Health Improvement Partnership (TLHIP) was born in the summer of 2013. An early adopter of the new collective impact framework[2], TLHIP assembled different sectors with a goal of creating a safer, healthier neighborhood through collaboration and alignment of efforts.  Today, more than 150 government agencies, nonprofits, and business organizations are working together to address the community’s health and well-being[3].  A first-of-its-kind effort, TLHIP offers insights for other cities and their forgotten neighborhoods.

The Tenderloin: A neighborhood in need

In the flatlands, down the southern slope of Nob Hill, the Tenderloin’s 33,000 residents live surrounded by prosperity.  Nob Hill boasts historic Victorian homes and spectacular views, while Union Square, which hosts some of the city’s best retail, theaters, and hotels, lies to east. Directly on its southern border, at Market Street, the high tech boom is in full force. Companies such as Twitter, Dolby, Zendesk, Yammer, and Spotify are on the Tenderloin’s doorstep. Despite nearby business energy and affluence, the Tenderloin remains “the last frontier in SF’s ever-expanding gentrification trend.”[4]

Health data from the Tenderloin and adjoining neighborhoods that make up zip code 94102 paint a disheartening story.[5] Preventable emergency department visits, which often occur when people do not have access to primary care, are 527 per 10,000 population, compared to a median of 197 for the city.  The numbers for emergency visits due to alcohol abuse, asthma, and diabetes are even more disturbing:  Emergency department visits due to alcohol abuse are 247/10,000 population compared to a city median of 39, emergency department (ED) visits due to asthma are 90 compared to 33, ED visits due to diabetes are 36 compared to a city median of 12.57.

The economic data are little better – the median household income in the Tenderloin is $24,127 (vs. $78,378 citywide), with nearly a third living below the poverty level (28%), and almost one-half are single-parent households (46%).  Only 7 percent of residents own their homes compared to 33 percent city-wide[6]. In fact, the Tenderloin has the highest proportion of single resident occupancy hotels in San Francisco, accommodating 29 percent of the neighborhood’s residents. Today, 57 percent of San Francisco’s homeless population live in the Tenderloin as residents without shelter.

While income and housing challenges contribute significantly to the poor health of residents, other factors such as access to healthy food and open space compound the disparities. In a city known for its dramatic physical setting of parks, beaches, and proximity to water, less than 4 percent of the Tenderloin is open space compared to 23 percent citywide. This disparity significantly limits opportunities for physical activity, particularly for the 3,500 children in the neighborhood who have limited access to playground and park space. Likewise, there are 112 retail alcohol outlets per square mile in the Tenderloin, compared to 17 citywide[7], but no neighborhood supermarket.  It is no surprise, when you consider the impact of place on health, that the difference in health outcomes of Tenderloin residents compared with city averages are striking. It is these social and physical environments – the social determinants of health – that contribute most significantly to long term community health.[8]

Tenderloin Health Improvement Partnership (TLHIP)

Collective impact

Historically, despite the fact that more than 120 community organizations and over 30 city agencies have worked to support Tenderloin residents, the neighborhood’s health outcomes remained abysmal year after year. A key problem is that nearly all of the organizations and agencies that offer services worked in silos.

By contrast, the leaders of Saint Francis Foundation and their hospital colleagues recognized the interdependency of these services – including healthcare, housing, free meals, job skills training, and addiction counseling – could be leveraged to be more effective and efficient when coordinated. Indeed, Kania and Kramer write that there is scant evidence that isolated initiatives are the best way to solve many social problems in today’s complex and interdependent world.5

After a series of meetings to explore how the agencies and organizations might work collectively to leverage better health outcomes, the Saint Francis initiative landed on the model of collective impact, which is a framework for addressing the complexity and interconnectedness of entrenched social problems.5

To achieve alignment and produce results, collective impact must meet five conditions:

  1. Have a common agenda as a shared vision for change.
  2. Adopt a shared system to measure results.
  3. Coordinate with each other and agree to experiment with new ways of working together to develop mutually reinforcing activities.
  4. Communicate continuously to build trust among all the stakeholders.
  5. Devote resources for a backbone organization to create and manage social impact.

The idea of working collaboratively and aligning toward a common goal resonated with Tenderloin stakeholders who care deeply about the health of the local community. They galvanized around the notion that these core determinants of health affected them all, embracing a “health in all policy” approach.10 Only by positively disrupting the status quo and addressing these core issues collectively could the systemic barriers to health be overcome.

Forging a public-private partnership

At the same time as these initial meetings were being held, the Mayor’s Office of Economic and Workforce Development (OEWD) began revising its Central Market Economic Strategy. With new Market Street neighbors putting pressure on the City to address public safety and other issues spilling over from the Tenderloin, forging an alliance with TLHIP to shape and guide the revised strategy was a win-win for the City and the neighborhood. While the Department of Public Health and Police Department were already deeply engaged, OEWD brought other city agencies such as Public Works and Planning into the work, reinstating an interagency task-force to better coordinate the 35 city agencies who work in the Tenderloin. Corporate neighbors along Market Street also joined TLHIP, aligning their community investments to the shared strategy. Other sectors of the Tenderloin eco-system also came to the table – academics, faith-based partners, funders, policy wonks, economic development advocates, and residents themselves.

The group coalesced around three key neighborhood priorities that cut across sectors:

  • Public safety
  • Community connections
  • Opportunities for residents to make healthy choices

These three priorities resonated across the community, with public safety emerging as a critical obstacle to every organization’s ability to meet its goals. If residents could not safely traverse the neighborhood because of fear of criminal elements, the mentally unstable, drug traffickers, discarded needles, cracked sidewalks, and poor lighting, how could they access services, healthy food, engage with their neighbors or be physically active?

The priorities lent themselves to a place-based strategy, through which community assets and deficits could be mapped, gaps and high impact opportunities identified, and a single map created that reflected the collective intelligence of the community.

From Strategy to Action

Magnifying funding

By adopting a collective impact framework and sensing the opportunity to leverage deep impact, the Foundation sought to create an aggregated capital fund to support the initiative.  Having witnessed non-profit organizations tailor their programs and services to match individual funder focus areas, they decided to focus not on funding individual programs, but on “glue funding” – funding the ability of organizations to work better together.  To do so, TLHIP developed a pooled-funding strategy with a goal of multiplying the impact of participating funders’ investments.

TLHIP reached out to corporate and foundation funders already heavily invested in the Tenderloin and challenged them to leverage the impact of their existing program funding by also investing in the TLHIP collective. To kick-start the process, Saint Francis Foundation committed $750,000 to the first year of TLHIP, more than three times its average annual investment. The Foundation then raised an additional $250,000 to fund $1 million in activities in the first year. Through TLHIP, the Foundation felt it more fully realized the second branch of its mission – to serve the community the hospital serves.

The Foundation also looked for opportunities to co-fund initiatives. Together with OEWD and other hospital system partners, TLHIP invested in initiatives harnessing public and private funding to amplify grantee organizations’ ability to turn their work into even more radiant bright spots in the neighborhood.

A novel feature central to TLHIP’s ability to stay nimble and responsive to community needs and emerging opportunities was their decision to set aside a flexible pool of funds.  With a short form application and elastic grant-making cycle, these funds were more readily available to pilot promising practices and collaborations, support capacity fund initiatives, and respond to sudden events.  While still requiring demonstrated alignment to the TLHIP priorities of safety, building connections, healthy choices, and measurable impact, these funds could be made available almost immediately. The flexible pool became a valuable tool in building trust and confidence in the commitment of TLHIP partners to the community.

Investing in bright spots, seeding change: Place, people, and equitable opportunity

The evolving TLHIP strategy is shaped by an active Community Advisory Committee, charged with governance of the initiative and comprising a broad cross section of Tenderloin leaders and community members. Supported by staff from Saint Francis Foundation and Saint Francis Memorial Hospital, the advisory committee oversees the Hospital’s community benefit plan, in addition to its role as the Steering Committee of TLHIP. Saint Francis Foundation and Saint Francis Memorial Hospital staff members also serve as the TLHIP convener, facilitating the process that allows the collective’s priorities, insights, and relationships to emerge.

Evidence shows that investments in Place (parks, open spaces, safety initiatives, healthy food, quality housing), People (connected social networks, community voice, culture of safety), and Equitable opportunity (jobs, education) help build resilient communities and increase well-being for individuals, families and community.[9]  Hence, TLHIP’s place-based strategy focused initially on neighborhood game-changers – investments in key initiatives that had the opportunity to catalyze success.

The 40 blocks comprising the Tenderloin neighborhood proved too big an area to target. Four zones within ten square blocks stood out as having bright spots that could be leveraged to catapult impact. TLHIP’s focus on neighborhood game changers and bright spots – identifying promising practices that could be funded and piloting community driven initiatives that had opportunity for scale and impact – laid the groundwork for seeding solutions to the complex issues that underpin many of the neighborhoods challenges and disparities. Establishing community trust in the ability of the collective to align priorities, resources, activities, and pathways to health would only happen with stronger relationships and success on the ground.

Game Changers: Three Examples

Boeddeker Park, Tenderloin Safe Passage, and the Green Mobile Kitchen Health Education Project are three examples of TLHIP’s game changers.

Boeddeker Park

Boeddeker Park, the one acre jewel of open space in the heart of the Tenderloin, was undergoing a $10 million renovation led by Trust for Public Land and Recreation and Parks Department when the TLHIP collaborative came together. Previously overrun by drug dealers, prostitutes, and gangs, while suffering from years of neglect and decline, TLHIP saw an opportunity to create a safe and vibrant community hub at the renovated park.

Planning for the new park had not taken into consideration the need for ongoing activation and additional security to ensure that the park was sustained as a safe and positively activated community asset, that is, to intentionally replace negative activity with positive activity. TLHIP believed that sidewalks and other public spaces in the neighborhood could not be ignored – otherwise, the park could easily fall back into the hands of criminal elements. TLHIP stepped in to support the formation of a leadership collaborative at the Park, under the umbrella of collective impact.

Led by the Boys and Girls Clubs of San Francisco as the Master Tenant of the park’s new clubhouse and responsible for managing the park and its programming, a new community bright spot emerged. The YMCA and Safe Passage, a volunteer-based neighborhood safety group, became anchor tenants and joined Boys and Girls Clubs, Recreation and Parks, and other local organizations to develop programming at the park. A model partnership was forged between park leadership and the Tenderloin station of the San Francisco Police Department, following a mandate that uniformed officers be on-site at the park, which was brokered by TLHIP and the Boys and Girls Club leadership.

Safe and welcoming to all, the park has exceeded all expectations.  With an investment of about $750,000 in the safety and positive activation of Boeddeker Park, TLHIP has enabled the park to serve more than 70,000 visitors, provide over 3,400 hours of activities for the community, and demonstrate a strong and vibrant partnership between local organizations and city agencies working collectively to provide an essential community resource.

Tenderloin Safe Passage

The potential power of Tenderloin residents themselves to be the instruments of change was self-evident from the beginning.  The challenge was how to support and nurture sustainable resident leadership. Early on, TLHIP prioritized supporting residents to take shared responsibility with the City and community partners for neighborhood safety.

Launched in 2008 by a group of moms from La Voz Latina, Safe Passage was a loosely-organized network of parent volunteers committed to ensuring kids get safely from school to afterschool programs. Stationed at high-risk intersections, Safe Passage Volunteers kept an eye out as kids followed a safe passage mural painted on the sidewalk, depicting a safe route that linked schools to housing, recreation centers, and churches. TLHIP saw the potential for Safe Passage to play a more foundational role in positively disrupting unsavory street activity and creating a culture of safety in the neighborhood. TLHIP also saw a potent opportunity to develop leadership within the parent community through Safe Passage.

TLHIP investment in Safe Passage included both funding and technical expertise to help not only program development, but also leadership and sustainability. Key corner captains received stipends and the volunteer base grew. Co-investment was secured from OEWD and Vision Zero to extend the footprint and allow for chaperone services to be made available to seniors.

In 2016, TLHIP and OEWD brokered a marriage between Safe Passage and the Tenderloin Community Benefit District (CBD), another TLHIP grantee, leveraging their shared commitment to improve neighborhood safety and bolstering the sustainability of both organizations. Safe Passage helped the CBD access to their network of residents and deep reach into the community, while the CBD provided critical leadership and institutional support to the Safe Passage program. Working together, a new culture of safety has taken root.

With public and private bridge funding and strategic support from TLHIP, the Mayor’s office, and others, the CBD reinvented itself in 2014. A new executive leadership and a reconstituted and energized Board took hold. Identified early as having the potential to be a crucial partner in improving public safety and street cleanliness in the Tenderloin, the CBD is now poised to take a significant leadership role in the evolution of the Tenderloin. As the CBD builds its case for increased operating support through local property owner assessments, TLHIP’s vision for a stronger CBD and ongoing belief in its ability to be a key strategic partner has helped propel the CBD toward growth and sustainability.

Green Mobile Kitchen Health Education Project

Increasing opportunities for residents to make healthy choices around food and physical activity is a challenge in the Tenderloin. The vast majority of Tenderloin residents lack easy access to affordable, fresh, and healthy food. Without a neighborhood grocery store, residents rely on corner stores, many of which emphasize liquor sales and do not stock fresh food. In addition, the high density of single room occupancy hotels without cooking facilities makes it virtually impossible for SRO residents to store and prepare healthy food. Not surprisingly, the rates of obesity and chronic heart disease are well above the City’s average.[10]

TLHIP saw an opportunity to reach SRO residents through education and performance art by funding the Green Mobile Kitchen to deliver a series of cooking demonstrations, classes, and theatre experiences in Tenderloin SRO hotels. Engaging residents around healthy food choices and teaching green cooking, preparation, and storage skills through hands-on performance dinners has boosted morale and empowered a hard-to-reach population to take more responsibility for healthy eating and living habits and long-term personal health. Traveling around the neighborhood in a green bio-diesel van, the Green Mobile Kitchen team helps residents with their health challenges, be that substance abuse, mental health, or housing problems, and offers healthy life skills with humor, food, and compassion.

Accelerating Impact

Five impact areas

TLHIP recognized early that community trust and relationships were paramount to its ability to collectively address the entrenched barriers and effect real and lasting systems change.

Over time, five TLHIP impact areas have emerged. Key goals, fundable initiatives, and impact measurements have been identified for each focus area, with the overarching goal of improved health and well-being for residents of the Tenderloin and a resulting reduction in preventable emergency room visits to Saint Francis Memorial Hospital.

The five focus areas are:

  • Active, Vibrant, Safe, and Clean Shared Spaces
  • Behavioral and Mental Health
  • Resident Health
  • Economic Opportunity and Affordable Retail
  • Housing Access

Evolving practices in the field of collective impact have revealed the need for stronger resident engagement and direct resident input to ensure priorities and strategies are authentically community driven.[11] A more intentional focus on health equity[12] and relieving disparities has also emerged as a fundamental requirement for true impact.[13]

Recognizing the dynamic collaborative that had formed, the Institute for Healthcare Improvement selected TLHIP to join a cohort of 20 collective impact initiatives from around the country showing promise of impact at scale.[14] This funding and technical assistance opportunity allowed emerging Tenderloin community leaders and TLHIP staff to participate in a “learning and doing” program designed to equip communities with skills and resources to unlock their potential and accelerate impact.

Measuring outcomes

Measuring the impact of upstream interventions on population health is not for the faint of heart.  While addressing the drivers of the chronic conditions that result in high numbers of preventable hospitalizations and emergency department admissions makes sense intuitively, drawing a straight line between interventions and health outcomes remains a challenge. TLHIP’s focus remains to address the social and built environmental factors that contribute to health outcomes, despite the fact that impact will be slower to realize and difficult to quantify.

The impact story must include both qualitative and quantitative elements, together with a leap of faith on the part of funders that positive change is afoot. The timeframe for TLHIP impact is forecast at eight or more years, and the initiative is in its third fiscal cycle. Evaluation metrics are shared across partners and agencies on program, neighborhood, and population health levels to track impact. Demonstrable change has taken place through various programmatic interventions and in how Tenderloin stakeholders work together. Their commitment to alignment and collaboration has forged new coalitions and mutually supportive networks and relationships.  Satellite initiatives have emerged, especially in the safety realm, as community confidence grows in its ability to make a difference on the ground in the neighborhood.

Lessons learned

Unprecedented collaboration and alignment between public and private partners has proven transformative not only in deepening impact but also in broadening the perspectives multi-sector stakeholders bring to the issues facing the Tenderloin. The city has focused new attention and resources on the neighborhood, with TLHIP serving as a leader in community dialogue. Within the next few years, the city plans to renovate two remaining Tenderloin parks, add lighting to nearly half of the neighborhood, and focus on slowing traffic and improving pedestrian safety

TLHIP has helped shape these plans to reflect the actual needs of the community. TLHIP investments in safety and positive activation working with community partners have solidified Boeddeker Park as a safe and critical community resource and ensured seniors and children feel safe walking from their homes to parks or schools. The community is ready to build upon these and other outcomes to make the next projects a success.

While no single grant has bent the curve on preventable emergency department visits or hospital readmissions, the cumulative impact of TLHIP has altered the discourse about the Tenderloin community and shifts in how residents see their own neighborhood are emerging. Individual improvements are becoming community-wide improvements, and vice versa. Now it is imperative to scale the strategy and sustain the work to truly make the long-term impact we all hope to achieve.

Looking Ahead

The collective impact model has begun to take root in the Tenderloin, driven forward through the leadership of the TLHIP team and the many residents and allied organizations that have been involved in the early bright spots described here.  In the next article in this series, we will look at where might be the next game-changers for the Tenderloin.  What are the next critical areas to focus the financial and social capital to get to a meaningful improvement in quality of life for the Tenderloin residents?

The next article in this series will also draw on the TLHIP experience, as well as other experts, to dive deeper into the questions of how impact manifests under this model, what can be effectively measured, and over what time horizon.  How do we get to a place of better understanding the linkage from these kinds of efforts to tangible outcomes such as preventable emergency department visits?  And how do we best to capture the desired improvements in attitudes and behaviors around the perception of safety, use of open spaces, and making healthy choices?

 

Endnotes and References

[1] Center for Disease Control and Prevention, 2016 https://www.cdc.gov/policy/hst/hi5/

[2] Kania, J., Kramer, M. “Collective Impact”, Stanford Social Innovation Review, Winter 2011.

[3] Causey, K., “Homelessness and the way Forward,” San Francisco Examiner, July 31, 2016.

[4] http://www.sfgate.com/neighborhoods/sf/tenderloin/, accessed on 1/4/17

[5] www.sfhip.org, data accessed on 1/4/17

[6] www.sfhip.org, data accessed on 1/4/17

[7] Seeding Change, Saint Francis Foundation, Fall 2015.

[8] https://www.cdc.gov/socialdeterminants/ accessed 1/12/17

[9] Pinderhughes, H, Davis, R., Williams, M. (2015). Adverse Community Experiences and Resilience:  A Framework for Addressing and Preventing Community Trauma, Prevention Institute, Oakland, CA.

[10] http://www.sfhip.org

[11] Raderstrong, J., Boyea-Robinson, T., “The Why and How of Working with Communities through Collective Impact” Journal of Community Development, Jan 2016.

[12] For a definition of health equity, see Braveman, P., Gruskin, S.,“Defining Equity in Health” Journal of Epidemiology and  Community Health, April 2003

[13] Kania, J., Kramer, M., “Advancing the Practice of Collective Impact”, Collective Impact Forum , May 2016

[14] IHI SCALE Initiative http://www.ihi.org/Engage/Initiatives/100MillionHealthierLives/Pages/SCALEInitiative.aspx

Strategies for Dealing with Supply Chain Disruptions

From the Health Sector Supply Chain Research Consortium (Eugene Schneller, Director), CAPS Research & Arizona State University, W. P. Carey School of Business

Contact: Eugene Schneller, gene.schneller@asu.edu

Eugene Schneller is an experienced academic leader, researcher, and administrator with extensive experience at the university, college, and departmental levels. As Associate Dean of the College of Business at Arizona State University (ASU), he was responsible for operations of one of the largest colleges of business in the United States.

Abstract

What is the message?

  • Supply chain disruptions are especially threatening in the health sector, where the delayed deliveries and lack of substitute products may mean postponing patient care. The most critical factor in managing supply chain disruptions is discovery speed. In turn, buyers are most likely to maintain relationships with suppliers that actively involve themselves in identifying problems and managing recovery from disruptions, using strategies that focus on maintaining a buyer’s trust in the supplier’s ability.

What is the evidence?

  • Scrutinizing how firms outside the health sector manage disruptions offers important lessons for health sector leaders. Two studies of supply chain disruptions examine the costs of the problems and the effectiveness of different approaches to recovering from the disruptions.

Links: Slide

Submitted: August 20, 2016; Accepted after review: October 30, 2016

Cite as: Eugene Schneller. 2017. Strategies for Dealing with Supply Chain Disruptions. Health Management Policy and Innovation, Volume 2, Issue 1.

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Introduction

Supply chain disruptions in healthcare such as recalls and shortages of pharmaceutical and medical/surgical products commonly harm clinical quality, regulatory compliance, and patient safety (see Figure 1). Even with sound risk management practices, severe disruptions can arise unexpectedly. Healthcare professionals need to establish flexible processes to identify and manage supply chain disruptions once they occur. This article summarizes recent research on managing supply chain disruptions.

Supply chain disruptions move through four phases: (1) the disruption event, (2) discovery of the event, (3) recovery from the disruption, and (4) redesign of the supply system. Although each phase requires thoughtful attention, the most critical factor in managing disruptions is often discovery speed. Following supplier-induced disruptions, suppliers benefit from using procedural justice strategies that restore buyers’ trust in their abilities.

 

Studies

Study 1: Managing supply chain disruptions

Study context: This study examined 34 supply chain disruptions from 17 firms, each of which experienced a well-managed supply chain disruption and a disruption that could have been managed better (MacDonald & Corsi, 2013).

Findings: Supply chain disruptions such as product recalls and quality failures are particularly challenging to address. Such internal disruptions commonly take substantial time to discover, face slow recovery times after discovery, and require large buyer-supplier recovery teams that are difficult to manage. Disruptions that are slow to discover incur particularly large financial costs. Firms that actively monitor supply chain activities are best able to discover problems early and then determine the disruption’s root causes. Early identification and diagnosis then facilitate smooth recovery.

Study 2: Mitigating damaged trust resulting from disruptions

Study context: This study examined 604 supplier-induced disruption incidents from Chinese manufacturers, including delivery delays, delivery shortages, and major quality defects. The researchers used organizational justice theory to examine how approaches suppliers used to resolve the disruptions affected buyers’ trust in the buyer-supplier relationships and, in turn, whether the relationships continued (Wang, Craighead, and Li, 2014).

Findings: Buyers were most likely to maintain relationships with suppliers that actively involved themselves in managing recovery from the disruption. Supplier strategies that focused on maintaining a buyer’s trust in the supplier’s ability (procedural justice) were most successful in limiting damage to trust. By contrast, simply encouraging buyers to support the suppliers (conserve supplier benevolence) did not help maintain a relationship.

Summary

Supply chain disruptions can spill down the value chain far beyond the initial problems. Both parties in a buyer-supplier relationship need active processes for identifying problems quickly, diagnosing the causes of the disruptions, and addressing the root causes. In doing so, suppliers need to focus on maintaining buyers’ confidence in their capabilities and their ability to avoid future problems.

 

REFERENCES

Macdonald, J. R., & Corsi, T. M. 2013. Supply Chain Disruption Management: Severe Events, Recovery, and Performance. Journal of Business Logistics, 34(4), pages 270–288.

Wang, Q., Craighead, C. W., & Li, J. J. 2014. Justice served: Mitigating damaged trust stemming from supply chain disruptions. Journal of Operations Management, 32(6), pages 374–386.

 

The Health Sector Supply Chain Research Consortium

The Health Sector Supply Chain Research Consortium (HSRC) is an Industry Advisory Group within CAPS Research.  CAPS Research is jointly sponsored by member companies, the W. P. Carey School of Business at Arizona State University, and the Institute for Supply Management®(ISM®). HRC was founded in 2004 to bring together health sector organizations and academic researchers to conduct research on topics related to the strategic management of the health care supply chain. HSRC embodies:

  • Research– We engage in cutting-edge research led by scholars from universities across the globe.  We also monitor monitoring health care supply chain trends and engage in benchmarking.
  • Thought Leadership –We function as a boiler room for new ideas to drive excellence and innovation in the health care supply chain.
  • Collaboration– Our research is developed through collaboration with member organizations representing multiple stakeholders across the health care supply chain.
  • Industry Guidance– HSRC research is responsive to industry needs and provides guidance and opportunity to raise the standard of management and policy practice surrounding the health care supply chain.

For more information, visit: http://www.capsresearch.org/health-sector-advisory-group/ or https://wpcarey.asu.edu/research/health-supply-chain

Contact: gene.schneller@asu.edu or (602) 320-1512

 

 

Consolidated Services Centers Can Improve the Health Care Supply Chain

From the Health Sector Supply Chain Research Consortium (Eugene Schneller, Director), CAPS Research & Arizona State University, W. P. Carey School of Business

Contact: Eugene Schneller, gene.schneller@asu.edu

Eugene Schneller is an experienced academic leader, researcher, and administrator with extensive experience at the university, college, and departmental levels. As Associate Dean of the College of Business at Arizona State University (ASU), he was responsible for operations of one of the largest colleges of business in the United States.

Abstract

What is the message?

  • Consolidated service centers (CSCs) can help simplify hospital supply chains by reducing suppliers, contracts, and staffing requirements. In doing so, CSCs act as system integrators that achieve greater cross-functional coordination of hospital supply relationships.

What is the evidence?

  • A study of three consolidated service centers (CSCs) used complexity theory to seek common themes and strategies that CSCs use to provide effective supply chain services for hospitals. Information for the studies included documents, field visits, and interviews with CSCs and their customers (Abdulsalam, Gopalakrishnan, & Schneller, 2015).

Links: Slide01 | Slide02

Submitted: August 20, 2016; Accepted after review: October 30, 2016

Cite as: Eugene Schneller. 2017. Consolidated Services Centers Can Improve The Health Care Supply Chain. Health Management Policy and Innovation, Volume 2, Issue 1.

Introduction

Throughout North America and beyond, consolidated service centers (CSCs) are emerging as important actors in the health sector supply chain. CSCs seek to reduce supply chain complexity. National distributors, group purchasing organizations (GPOs), and other health sector supply chain intermediaries are integrating features of CSCs as they attempt to deliver higher levels of service to their customers. As the health sector increasingly engages with this supply chain model, it is important to understand how CSCs manage complexity.

CSCs help simplify complex supply chains


The study highlights three conclusions about the complexity of the supply chain landscape.

First, the three CSCs in the study created measurable reductions in supply chain complexity and staffing.

  • Medical/surgical suppliers: Reduced by 10% to 20%
  • Medical/surgical direct contracts (non GPO): Reduced by 10% to 90%
  • FTEs at the hospital: Reduced by 3 to 15 FTEs
  • FTEs needed at CSC to service the hospital: Additional 1 to 8 FTEs (net reduction: 2 to 7 FTEs)

Second, the CSCs created supply chain benefits by reducing components in the system and managing inter-relatedness.

  • Fewer components: CSCs reduce the number of components in the hospital supply chain by facilitating supply base reduction initiatives.
  • Managing inter-relatedness: CSCs address inter-relatedness in the hospital supply chain by disintermediation and resource consolidation.

Third, three characteristics of the CSCs helped them smooth the hospital supply chain landscape.

  • Customer selectivity: The CSCs in the study were cautious about adding customers, preferring to grow through increased volume with existing customers.
  • Contract compliance: Over 80% of hospital supply spend was through the CSCs, compared to traditional hospital supply routes that incurred 50% to 70% of spend through direct contracts.
  • Reporting realignment: Hospital supply directors changed their reporting relationships to a matrix structure that included reporting to CSC leadership.

Discussion

To date, hospital supply chain functions have achieved lower uptake of shared service strategies compared to functions such as finance, IT, and HR (Deloitte, 2013). The emerging self-distribution strategy in health care, including CSCs, is beginning to reverse this delay. By aggregating supply chain components under one locus of control, the CSC can achieve wider “arcs of integration” with suppliers and customers (Frohlich & Westbrook, 2001).

The study has limits based on examining only three CSCs. Nonetheless, this article highlights the potential for CSCs to lead cross-functional coordination that integrates purchasing, logistics, and operations. In doing so, CSCs can both reduce cost and improve reliability in the health care supply chain.

References

Abdulsalam, Y., Gopalakrishnan, M., Maltz, A., Schneller, E. 2015. The Emergence of Consolidated Service Centers in Health Care. Journal of Business Logistics 36, 321–334.

Deloitte. 2013. 2013 Global Shared Services—Survey Results. Deloitte Development LLC.

Frohlich, M.T., Westbrook, R., 2001. Arcs of integration: An international study of supply chain strategies. Journal of Operations Management 19, 185–200.

 

Health Sector Supply Chain Research Consortium

The Health Sector Supply Chain Research Consortium (HSRC) is an Industry Advisory Group within CAPS Research.  CAPS Research is jointly sponsored by member companies, the W. P. Carey School of Business at Arizona State University, and the Institute for Supply Management®(ISM®). HRC was founded in 2004 to bring together health sector organizations and academic researchers to conduct research on topics related to the strategic management of the health care supply chain. HSRC embodies:

  • Research– We engage in cutting-edge research led by scholars from universities across the globe.  We also monitor monitoring health care supply chain trends and engage in benchmarking.
  • Thought Leadership –We function as a boiler room for new ideas to drive excellence and innovation in the health care supply chain.
  • Collaboration– Our research is developed through collaboration with member organizations representing multiple stakeholders across the health care supply chain.
  • Industry Guidance– HSRC research is responsive to industry needs and provides guidance and opportunity to raise the standard of management and policy practice surrounding the health care supply chain.

For more information, visit: http://www.capsresearch.org/health-sector-advisory-group/ or https://wpcarey.asu.edu/research/health-supply-chain

Contact: gene.schneller@asu.edu or (602) 320-1512

Two Secretaries: Lessons and Insights for U.S. Health Care

Steven Ullmann, University of Miami School of Business Administration

Contact: Steven G. Ullmann, sullmann@bus.miami.edu

Steve Ullmann is Professor and Chair, Department of Health Sector Management and Policy and Director of the Center for Health Sector Management and Policy at the University of Miami School of Business Administration. Dr. Ullmann holds secondary appointments in the Department of Economics as well as in the Departments of Epidemiology & Public Health and Family Medicine & Community Health in the University of Miami Miller School of Medicine, specializing in the areas of health care management and health care economics.

Abstract

What is the message?

Discussion with two former Secretaries of Health and Human Services, Donna Shalala and Kathleen Sebelius, offers insights for changes in U.S. health care going forward.

What is the evidence?

The insights draw on thirteen years of experience of the two former Secretaries of Health and Human Services.

Cite as: Steven G. Ullman. 2017. Two secretaries: Lessons and insights for U.S. health care. Health Management Policy and Innovation, Volume 2, Issue 1.

Introduction

What happens when two former Secretaries of Health and Human Services come together for a one-on-one discussion relating to the Patient Protection and Affordable Care Act and potential adjustments/alternatives to the Act?  Former Secretaries Donna Shalala (1993-2001) and Kathleen Sebelius (2009-2014) led this discussion at the University of Miami’s Center for Health Sector Management and Policy’s annual conference, The Business of Health Care, on March 4th with this year’s theme being “Post-Election.”

The Secretaries had significant insights given their own experiences—Secretary Shalala’s attempt during her tenure, together with President and Mrs. Clinton, to pass “Hillary Care,” and Secretary Sebelius’ experiences with the political ups and downs associated with the passage, rollout, and seven-year experience of the Patient Protection and Affordable Care Act (PPACA) under President Obama’s administration. With their experiences, they were able to provide an understanding of what works and what does not in these complex processes and were able to provide words of advice and warning relating to future plans and proposals.

With the conference being held a week before the unsuccessful first attempt to pass the American Health Care Act by the House, the timing of their thoughts was that much more important,  as well as very much in agreement.

Lessons from the Past

In any health care methodology proposed, timing is an issue.  Delay is not good from the Secretaries’ perspectives.  It is important to begin quickly to craft policy.  Congressional buy-in, however, and the creation of a supportive coalition are also important.

This was a lesson learned from the success of former President Lyndon Johnson in successfully negotiating with Congress to pass the Medicare and Medicaid Acts in 1965, the only true forms of national health insurance in the United States prior to the passage of the Patient Protection and Affordable Care Act nearly fifty years later.

When Medicare and Medicaid were first passed, the focus was on coverage. Cost issues were the focus later on. The Secretaries suggested that the same must be true with current and future policies; first coverage, then costs.

The Secretaries strongly suggested that the President should stay out of the details of the plan or, as was stated, “the President needs to stay out of the Health Care weeds”.  This was the methodology followed by former President Obama in introducing the PPACA.  The President indicated nine overriding principles and then allowed Congress to develop the project details.

Here are the nine principles:

  • Reduce long-term growth of health care costs for businesses and government
  • Protect families from bankruptcy or debt because of health care costs
  • Guarantee choice of doctors and health plans
  • Invest in prevention and wellness
  • Improve patient safety and quality care
  • Assure affordable coverage for all Americans
  • Maintain coverage when you change or lose your job
  • End barriers to coverage for people with pre-existing conditions
  • The plan must put the country on a clear path to cover ALL Americans

Clear communication of the principles and significant aspects of a health plan is critical. The administration needs to immediately provide clear explanation of the plan and its benefits to the public and the message must be clear, something that had not necessarily been accomplished by previous administrations or the current one.

For example, clear communication should allow the public to understand that in health care, a free market does not work on its own.  Health care has strong public good components.  Without clear explanation, misconceptions quickly arise and once those misconceptions are perceived as the truth, the misperceptions are very difficult to undo. There have been many miscommunications relating to the current law as well as various other proposals that have been forthcoming.

Looking Forward

Secretaries Shalala and Sebelius discussed some of the details of alternative plans that have been under discussion.  One of the alternative concepts, forwarded by members of Congress, has been to retract the portion of the Affordable Care Act that requires insurance companies to provide insurance to those with preexisting conditions and/or to allow insurance premiums to reflect experiential ratings rather than community ratings.

The legislation that had been proposed was not passed, but may be proposed anew. It would allow for a higher premium for those with preexisting conditions but also would create high-risk pools at the state level for those with preexisting conditions.  Regarding high-risk pools, the Secretaries indicated that they historically do not work well.  In the past, 37 states ran out of such funds.  In turn, people who were covered in high-risk pool plans ran out of coverage.

The Medicaid expansion program has also been a focus of Repeal and Replace/Repeal and Reform plans.  The former Secretaries indicated that 72 million individuals are currently on Medicaid and that one-half of births take place with funding through the Medicaid program.  Further, funding for long-term health care is a heavy (and to become a heavier) burden placed on the Medicaid system due to the aging population.

Secretaries Sebelius and Shalala indicated that Medicaid federal block grants to states, as was proposed by the current legislature and the administration, would have caused a significant drop in benefits within states.  With Medicaid being a relatively low payer to providers to begin with, provider reimbursement would have been subject to further lowering of rates.  This would have potentially compromised care to the poor.

Further, proposals have come forth to set caps per person that the Federal government would pay for Medicaid. This simply shifts the cost of care to other payers.  Discussion by the Secretaries relating to the problems associated with funding long-term care for the elderly indicated that long-term care reimbursement should come under Medicare, not Medicaid, and that governors would welcome returning this portion of Medicaid funding and funding obligations to the federal government.

Regarding Health Savings Accounts, the concept is potentially positive if there is an appropriate health care plan that underlies it.  The Secretaries used the analogy of the acquisition of a Medicare supplement plan without having an underlying base Medicare plan.  If one were to access a Health Savings Account for care in a tier four Neonatal Intensive Care Unit or for neurosurgery, the funds in the Health Savings Account would be depleted quickly, and the Health Savings Account would have been pretty close to useless.

Regarding cross-state availability and marketing of health insurance plans, the Secretaries indicated that seven states already allow for cross-state availability of insurance.  There have been no takers among insurers.  The reason is that it is the network of providers and hospitals that is important.  Furthermore, consumer protection regulations differ from state to state.  Thus, this option is easier said than done.

Finally, the Secretaries discussed the total lack of electronic interoperability, in that Electronic Health Record Systems do not talk to each other.  This has become a significant issue regarding the lack of continuity of care resulting in higher cost and lower quality.

The discussion with the two former Secretaries of Health and Human Services provided a rare and insightful afternoon.  As we move forward, we face an important period in health care cost, funding, quality, and access.

Donna Shalala and Kathleen Sebelius discuss the Patient Protection and Affordable Care Act