The Healthcare Hub

Health Equity: What Role Does Healthcare Supply Chain Play?

Thursday, December 7, 2023

Achieving the goal of health equity, which the U.S. Centers for Disease Control and Prevention (CDC) defines as “the state in which everyone has a fair and just opportunity to attain their highest level of health,” seems insurmountable given the vast disparities in healthcare delivery today and challenges that must be overcome.

Health inequity is a vast and complex problem that requires multifaceted solutions involving many stakeholders-- from federal and state governments to private and public payers to health systems and hospitals – and even down to the individual provider level. 

In a recent interview, Laura Dunbar, SVP, Communications & Corporate Sustainability for GHX, shared her thoughts on making healthcare more equitable across patient populations, including the role of supply chain in supporting these initiatives. 

 


 

Table of contents

  1. The equitable care cost conundrum

  2. Establishing an ROI for care equity

  3. The role of supply chain in health equity

 


 

The equitable care cost conundrum

While it is a bitter pill to swallow, health disparities - differences closely linked with social, economic, and/or environmental disadvantage - are inherent in the structure of our healthcare delivery system, and arguably, across community and culture. 

Healthcare inequity is a vicious cycle – individuals unable to access affordable, quality care-- particularly preventive care-- are at greater risk for chronic conditions, which in turn, puts them at a greater disadvantage physically, emotionally, and financially. 

Disparities in care access generate avoidable cost that is simply unsustainable. Health inequity costs the U.S. $451B annually and is expected to balloon to $1 trillion in 2040 if the issue is not addressed. 

Take for instance someone with employer-sponsored health insurance that covers the cost of regular health screenings. During a routine care visit, their primary care physician (PCP) discovers the patient is at risk for a heart attack and prescribes preventive treatment.  

Now picture a different individual, perhaps living in an historically underserved area, who must pay out of pocket for routine care. The high cost and inconvenience for them to visit a doctor, coupled with provider shortages in their geography, means they don’t get the same kind of preventive care. Because they didn’t get screened, their cardiac issue goes undetected, they have a heart attack and are brought to the emergency room (ER), leading to a lengthy (and costly) stay in the intensive care unit (ICU). 

As the old saying goes, “an ounce of prevention is worth a pound of cure.” In most cases, preventive care costs far less than the treatment of chronic conditions. The challenge to expanding access to preventive care for all- who pays for it? 

 


 

Establishing an ROI for care equity

“Perhaps one reason we don’t see more investment in health equity initiatives is because the return on investment (ROI) is cost avoidance and not expense reduction,” Dunbar explained. “With many hospitals not yet fully recovered financially from the pandemic, it’s difficult to make the business case.”  

Dunbar believes catalysts for deeper investment will be regulatory and reimbursement on nature. She pointed to the Centers for Medicare & Medicaid Services (CMS) calendar year (CY) 2024 Physician Fee Schedule (PFS) final rule,“ one of several rules that reflect a broader Administration-wide strategy to create a more equitable health care system that results in better access to quality, affordable care through innovation.” 

With an effective date on or after January 1, 2024, CMS is “finalizing to pay separately for Community Health Integration, Social Determinants of Health (SDOH) Risk Assessment, and Principal Illness Navigation services.” New coding and payment areas aimed at health equity include: 

  • Care involving community health workers, who link underserved communities with critical health care and social services. 

  • Appropriately paying practitioners for engaging with caregivers who help carry out treatment plans for people with Medicare. 

  • Social determinants of health risk assessments.  

 


 

The role of supply chain in health equity

Dunbar shared that health equity is a core component of GHX’s vision to create a future where affordable, quality healthcare is possible for all. When asked about GHX’s work specific to this area, Dunbar stated, “we’re focused on how our products and services can be tuned to help our customers in this regard.” 

On the surface, supply chain’s role in supporting more equitable healthcare across populations can be seen in improving access to medical/surgical supplies and drugs. The ability to procure the right products at the right prices in the right quantities and deliver them to the right locations at the right time – whether it’s a major metropolitan medical center or a rural community hospital – is fundamental to quality care delivery. GHX drives accuracy and efficiency in these processes through its intelligent automation solutions

But in today’s value-based care environment, supply chain’s ability to move the needle on healthcare equity goes beyond the basics of procurement, contracting and logistics. To expand access to quality care, health systems and hospitals are working to uncover ways to deliver care with greater value.  

“Healthcare needs more ways to connect the dots between investments in health equity and their value,” said Dunbar. “Organizations like GHX are thinking deeply about how to make it easier to do this.” 

With supply chain costs second only to labor-- and the availability of data to drive decisions better decisionsabout supplies play in patient outcomes, healthcare organizations need data to connect these dots – and GHX delivers. The company’s evidence-based and clinically relevant insights help customers ensure supply selection and utilization are driving quality care at the right cost.    

Through GHX Marketplace, GHX also supports health systems and hospitals with socially responsible sourcing. For example, a hospital can direct its buyers to purchase products from local, diverse suppliers as opposed to those located somewhere across the globe. In this way the hospital contributes to its community’s socioeconomic status by supporting local companies and their employees.

💡 Read more: 4 Ways Directed Buying Can Help You Achieve Your ESG Goals

 


 

Conclusion

The journey to health equity is a complex one, riddled with barriers rooted in social, economic, and environmental disparities. The challenge lies not only in addressing these inequities but also in creating a system that can support widespread, quality care at an affordable cost. 

Achieving health equity requires collaboration across stakeholders and innovative solutions that extend beyond traditional boundaries. The supply chain, with its ability to impact both costs and patient outcomes, can help overcome current challenges and pave the way for a more equitable and sustainable healthcare future. 

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Kara L. Nadeau

Healthcare Industry Contributor
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